Build and leverage advocates for your brand to boost sales exponentially!
Are you a brand advocate? Are you someone that will go to great lengths to let others know how much you love a particular brand? Do you tell your friends and family, your colleagues and business associates, and even people you just met? Many of us have favorite brands, sometimes they can be far and few between and when we find them we’re truly enamored with and want others to experience them.
A brand advocate continues to do business with you regularly, spends more than other customers and is one of your biggest champions. They’re passionate about your brand, what you stand for, and tell others because they believe in your brand. They even go as far as speaking praises about your employees.
Advocates for your brand feel inspired because they have connected to it on an emotional and even visceral level. Your brand makes them feel special and a part of something bigger and better than themselves. And, they go to great lengths to promote your brand to others, even purchasing your products as gifts and sharing their experiences on Facebook®, Twitter®, customer review sites, and other social media platforms. Now, that’s a true brand advocate!
Increasing Brand Advocates Can Reduce Your Marketing Expenses
Companies spend significant amounts of money on traditional marketing efforts each year. Those funds may get customers in the door, but the missing component is that it doesn’t necessarily build loyalty nor does it turn them into brand advocates. Studies show that marketing to acquire new customers is five to seven times more expensive than nurturing your existing customers.
Inspiring your existing customers to return and do business with you creates even greater pay-offs such as increased sales from them and from those they refer to you. And let’s not forget the tremendous amount of goodwill that is created for your brand through an advocate’s word of mouth marketing to their circle of influence that in turn elevates awareness leading to increased brand value.
What’s the Real Value of a Brand Advocate?
In a recent white paper entitled, “What’s a Brand Advocate Worth?” by Zuberance, a “brand advocate’s recommendations are the #1 influencer of billions of dollars in purchases from cars to computers, hotel rooms, movies, enterprise software, and more…”
Research conducted by Deloitte and reported in “A new breed of brand advocates” demonstrates that the longer a customer does business with you the greater the profitability to your brand. The Deloitte study showed that a brand advocate spends two times as much as an ordinary customer.
Zuberance used the Deloitte findings to estimate the total value of a brand advocate to be at least five times or more of the value of an ordinary customer comprising:
- Twice the value as an ordinary customer (Spend Value), plus
- The advocate’s referrals has at least three times the value (Advocacy Value)
Zuberance’s research reported even higher examples of up to seven times more value than average customers in three industries: hotels, restaurants, and enterprise software.
The data is very compelling and shows that brand advocates have significantly more influence in driving top-line growth than your traditional paid advertising and marketing methods. That’s remarkable when you consider all the ways an advocate can drive growth for your business. Consumers are more likely to buy based on a trusted referral versus an advertisement.
Another recent study was conducted by Inspiration Blvd, LLC and reported in Forbes. The research found a new paradigm emerging in businesses—that consumers are drawn to brands based on their Inspiration Factors. This is driven by the emotional bond they have to a brand and how the company is perceived to make the world a better place for others.
One common outcome of Inspiration Blvd’s research was that every Most Inspiring Company that made the list had the ability to enlist and unleash a cadre of enthusiastic advocates to carry out its organizational mission. The research also uncovered how higher levels of Inspiration affect earnings:
- 50% of the brands recognized by consumers as inspiring outperformed the S&P 500 by an average of 45% and as much as 95% year over year.
- And as a whole, these brands outpaced the S&P by 11% over a 5 year period.
Talk about the enormous ‘return on inspiration’, (RO-I), and its correlation to overall business performance!
And earlier research through Fred Reichheld (Bain & Company) “The One Number You Need to Grow,” and Satmetrix published in Harvard Business Review, showed a strong correlation between higher levels of year-to-year revenue growth with a greater number of consumers who recommended a brand. Riechheld referred to them as “net promoters”—yep, brand advocates!
The data clearly indicates that building brand advocacy is a no-brainer because of the return on your investment. So, with all the compelling research available in the market, why haven’t more companies learned from and studied the companies that utilize this powerful lever to inspire customers to become their no-cost sales force? This is a huge untapped opportunity for so many companies. Granted, creating brand advocates doesn’t happen overnight. It takes careful thought, commitment, and resources.
Stay tuned for PART 2: How to Build Brand Advocates — coming soon!