According to the article “Is Your Bank an Advocate” on the 1 to 1 website, simplicity is the key for banks becoming an advocate for their customers. The article discusses the results from Forrester’s 2007 report “How Canadians Rate Their Banks on Customer Advocacy.” Making advocacy simple equates to a simple product set, simple messaging, first-call resolution, and working hard to solve customer issues.
But let’s make sure we define advocacy. It is not about a series of activities you do that only focus on getting customers to be advocates for your business by spreading positive word-of-mouth and referring others. It is a strategy that focuses on first doing what is in the best interest of your customers, and by doing so, your business is then rewareded with stronger relationships, more referrals and positive word-of-mouth. The first one is focused on what customers can do for you, the second one focuses on what you can do for customers. It’s the second one that will bear better results.
Those results include a higher product purchase rate average (3.4 vs 2.75) for those banks who score high on customer advocacy. According to Bill Doyle, the author of the report:
“High customer advocacy leads to stronger organic growth. Customers who feel that the bank is doing what’s best for them rather than what’s best for the bottom line tend to buy more, and bring in friends and family as new customers.”
In addition, Ron Shevlin’s work on advocacy while at Forrester found that consumers’ perceptions of their banks’ customer advocacy is the strongest driver of the intention to make future purchases from their bank. Ron also goes into the three facets of advocacy (human, operational, and product).
While simplicity may be the key, you need to be clear on what type of advocacy you are working towards and why. Measuring the results of an advocacy strategy can certainly include product purchase rates, but understand that there is whole lot more going on here. One needs to account for the positive word-of-mouth, the increased referrals, and improved customer loyalty that are generated by this type of strategy.