Too often today the two terms “loyalty” and “advocacy” are used interchangeably when referring to valuable customers. In fact, they exist on two ends of a spectrum.
Today, customers have many choices and are distracted by messages, promotions, and opportunities to save and derive greater value from their purchases. A brand like Nike hopes that their customers buy all their tennis shoes from Nike but the reality is that a single customer may have Nike, Adidas, and Puma in their closet.
What makes things worse is that in today’s social, mobile, super-connected world, customers are not only not loyal, but they are “cheating” on businesses through comparison shopping (online and in store), taking pictures in one store and buying it online and so on.
With 31% of consumers willing to recommend providers and brands to others (Accenture), they are blatantly sharing information on best prices and quality products with their friends. Companies often find themselves in price wars, a sure sign of a commoditized market and shrinking margins.
Customer loyalty is not enough. While it’s correlated with increased purchase frequency and higher average order value, loyalty on its own doesn’t guarantee any sort of emotional allegiance. Customers cannot be bought. The fact is businesses must build loyalty every day through small steps in the right direction. Once a customer is satisfied that they made the right purchase decision, they become open to the idea of loyalty to that product or brand. It is up to the brand to always provide a positive buying experience. Most customers place their “worst customer experience” in the past two years while only 55% can recall a positive customer experience within the past decade (SDL). With this statistic, it is of utmost importance that the brand takes the initiative to share with the customer why their product and experience are superior to the competition.
Once loyalty is established, a customer can move on to gaining the qualities of an advocate. Qualities of customer advocacy include promoting the brand on social media, happily contributing information to the brand, and referring friends. Ideally, all of this is done without an expectation for reward or recognition. However, since there are so many brands with so many platforms, it helps to reward advocacy with loyalty points or discounts. Take the example of Olympus Camera, who rewards customers for contributing to their photo gallery, writing product reviews, and referring friends, among other actions.
For a business to gain advocacy, the brand should consider following online conversations by loyal customers and identifying points of strong engagement. It also helps to recognize users who are contributing great content. Olympus has a “photo of the month” contest, in which one customer’s photo is featured on their site and in their emails. Creating badges for contributors of reviews or answers can provide extra motivation. Even taking the time to repost some fan photos on Instagram or Facebook can have a positive effect.
When the shift from loyalty to advocacy happens, marketers will experience more referrals, better online reviews, rising social media shares, and possible media coverage along the way. With an understanding and awareness of both your loyal and advocate customers, retailers and manufacturers can take actions to enhance marketing success.
Loyalty Designed for Authentic and Brand Driven Experience Commerce with insights from e.l.f. Cosmetics