I agree.
Every organization needs people (employees, customers, clients, allies, etc.) who are its advocates among their family members, friends, and associates. No organization ever has too many of them. Call them whatever you wish. Ben McConnell and Jackie Huba call them “Evangelists” whereas Gary Vaynerchuk calls them “Advocates.” Let’s do so also.
According to an IBM study of online retail customer buying patterns,
• Their share of wallet is 33% more than that of customers who aren’t advocates
• They spend about 30% more dollars with their favorite online retailers than non-advocates do.
• Advocates stick around longer when online, proving themselves less likely than other customers [or prospective buyers] to switch to a competitor even if it offers similar products at similar (or even lower) prices.
• They have significantly higher lifetime value than non-advocates, for not only do they spend more now, they are more likely to keep spending, and even increase their spending, as time goes on.”
In The Thank You Economy, Vaynerchuk cites research by The Nielsen Company that indicates that “consumers are generally more motivated to reach out to a company with a complaint than with praise. However, they are willing to publicly praise a company when given the opportunity to do so. Social media allow companies to provide ample prompts for consumers to remember why they like a brand, and inspire them to say so publicly, whether on the company website or via social networking channels.”
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Rules of Thumb
1. It costs about six times as much to replace a customer as it does to retain one.
2. Takes at least 12-15 times as much to replace an Advocate as it does to retain one.
3. It doesn’t take a Ph.D. in mathematics from Princeton to understand the financial implications and consequences of creating and then nourishing (“feeding”) Advocates, Evangelists, VIPs, etc .
Suggested reading
Creating Customer Evangelists: How Loyal Customers Become a Volunteer Sales Force
Ben McConnell and Jackie Huba