Download - Market Probes Customer Advocacy April 2011
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Your Customers Are Talking About You!Are You Harnessing That Power?
March, 2011
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Dr. Tom FussoEVP/Division [email protected]
AGENDA Perspective of Customer Advocacy
Current Realities of Your Customers
Customer Advocacy in Retail Banking
Impact on New Customer Acquisition & Organic Growth
Targeting Bank Management of Investable Assets
Your Speaker/Agenda
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What is the best measure to manage your customer base? Is it ……. . .
The best measure:
Should best reflect the current reality of your customers
Should lead to new customers and organic growth
Cust
omer
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Customer Involvement
In today’s marketplace, it is just not enough to have very satisfied customers to drive business growth; a business needs very satisfied customers who will frequently and consistently speak in favor of the brand, both online and offline. As Professor Philip Kotler says, “Let your advocates do the marketing for you.”
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Customer Advocacy Impact
Successful brands that Successful brands that enjoy high levels of enjoy high levels of customer advocacycustomer advocacy
Success is partially built on harnessing the power of your current customers to drive both new customer growth and organic growth.
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Advocacy Constructs Worth RepeatingAdvocacy Constructs Worth Repeating
Market Probe’s Advocacy Framework is built on two key constructs:
Advocacy Advocacy AttitudesAttitudesCustomers hold long-term attitudes basedon both rational andemotional reactions of their experiences with your company’s various performances over time.
Expressions of Expressions of Support From Existing Support From Existing
CustomersCustomersHow do existing clients of your
company speak of their experiences with their peer
group both online and off-line? This communication happens allthe time in a variety of settings.
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What is Market Probe’s Advocacy Ladder?Market Probe’s Advocacy Ladder is a pictorial representation of a customer base into Advocacy segments.
Advocate
Allegiant
AmbivalentAmbivalent
Alienated
The best customers of your brand. Your need to engage them.
Implement customer experience improvements to move them to Advocates.
Implement customer experience improvements to move them up the Advocacy Ladder.
Implement customer experience improvements to reduce the Alienated group.
Move up the Advocacy Ladder
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Primary Bank Customers are Telling Others Positive Things About Their
Bank!Express Positive Things Past 6 Months
34%
26%
16%
24%
Not Once
1-2 Times
3-4 Times
5+ Times
66% told others at least once something positive about their bank!
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Customers Varied in How Much They Talked About Their Primary Bank to Other People
We used both actual behavior and attitudes to segment customers by involvement with their bank.
Advocate
Allegiant
AmbivalentAmbivalent
Alienated
Advocates, 22% of an average customer base, made a positive statement about their bank 6.3 times to a friend or colleague in the past few months.
Segment SizeTop 15 Bank Average
Number Recent Positive Expressions
22% 6.3 Times
30% 4.1
30% 0.9
17% 0.0
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37%
35%
27%
27%
25%
25%
24%
23%
23%
22%
22%
19%
18%
13%
11%
Bank #1
Bank #2
Bank #3
Bank #4
Bank #5
Bank #6
Bank #7
Bank #8
Bank #9
Bank #10
Bank #11
Bank #12
Bank #13
Bank #14
Bank #15
Banks Vary in the Proportion of Their Customer Base Who are Advocates
Percentages of Advocates
Source: 2010 Bank Customer Advocacy
Monitor
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Impact of Advocacy on Positive Buzz:Two Regional Banks
Best-in-Class Bank B
Primary Bank Customers (DDA Plus 1+ Products) 2.6 Mil 2.0 Mil
Percentage of Advocates 37% 19%
Number of Advocates 962,000 380,000
Annual Number of Instances Talking About Bank (Positive Buzz) 7.6 5.2
Annual Instances of Positive Buzz from Customers 19.8 Mil 10.4 Mil
Best-in-Class Bank reaps
9,400,000 additional instances of
customers talking positively about
their bank over competitor!
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Impact of Raising Advocacy Levels at Bank C Yield Substantial Incremental Amounts of
Positive Buzz from CustomersBank C Current
Bank C to Best-in-Class
Primary Bank Customers 3.7 Mil 3.7 Mil
Percentage of Advocates 21% 37%
Number of Advocates 777,000 1,370,000
Annual Instances of Positive Buzz from Customer Base 23.5 Mil 29.6 Mil
Bank C would reap 6,000,000
instances of their customers
talking positively about their
bank to others!
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Share-of-WalletAveraged Across All Segments
Retention IntentAveraged Across All Segments
Impact of Raised Advocacy Levels at Bank C Also Yields Incremental Gains in Share-of-
Recent Purchases and Retention Intent
Current Goal
39.2%42.8%
Current Goal
48.8%
59.2%3.6 point o
r
9.2% increase10.4 point o
r
21% increase
Translates into
incremental 133,000
products purchased
per year
Translates into
incremental 385,000
households that will
definitely remain
with Bank C
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Advocacy Driver AnalysisSwing up and swing down analysis identifies the
attributes that drive customers from Alienated to Ambivalent, Ambivalent to Allegiant, Allegiant to Advocate.
Analysis repeated for brand, product and key touchpoint attributes for input into an overall improvement action plan.
10%
14%
17%
15%
22%
5%
1%
6%
12%
Staff always takesthe time to talk with me
I have an open andhonest relationship with the
people at my bank
Staff proactively suggests productsand strategies that will help me
Staff suggests only thoseproducts that are best for me
Staff follows up withinformation as needed
Staff delivers servicein a timely manner
Staff are trained to offerreliable services
Staff appears competentand knowledgeable
Staff makes me feel likea valued customer
24%
21%
14%
1%
Alienated Advocate
Critical to Reducing Alienated Critical to Building Advocates
13%
13%
9%
6%
1%
Quality of Staff Services
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What are the benefits of Advocacy?
Advocacy is the most contemporary construct to help understand customer behavior in today’s marketplace.
Advocacy provides the strongest linkage to a critical metric of business growth that is often ignored in all satisfaction/loyalty research –
New Client Growth driven by Advocacy
Advocacy establishes the strongest linkage to organic growth of a business: Retention Rates and Share-of-Wallet Growth
Advocacy meets the criteria of an effective market segmentation: size, stability and business value
Advocacy is an ideal metric for tracking studies for both B2B and B2C situations, where other single-question metrics fall short.
Advocacy helps define priorities and action plans to enhance customer experiences
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Call for Action
If your key metrics are not sensitive to market share fluctuations or staff efforts to improve
Key metric trend lines are flat
Internal clients are not able to take sufficient action with the current metric
Increasing demands for accountability
Introduce the advocacy approach to your management as part of re-engineering and redefining the value of your current customer research.