5 Points On Brand Advocacy And Its Benefits
Revenue growth would be an obvious benefit of brand advocacy. But did you know that it also results in the following services?
Here there are some important points on brand advocacy and its benefits:
1. Cost reduction:
Brand advocacy leads to buzz, which results in decreased spending in advertising and sales promotions. Buzz may not entirely replace paid advertising, but it can support it.
2. Loyal customer:
Attracting a new customer costs a company five times more than retaining an existing customer. Brand advocates remain loyal for a more extended period.
3. Referral power:
Brand advocates have indirect referral power. A Nielson survey suggests that 92 percent of respondents trusted referrals from people they knew. According to an estimate, 84 percent of Business to business decision-makers start the buying process with a referral. Companies with formalized referral programs experience 86 percent more revenue growth compared to the rest.
4. Bottom line improvement:
Bain & Company has concluded that in financial services, a 5 percent increase in customer retention rate can increase the Company’sCompany’s profitability by 25 percent. Brand advocates tend to remain loyal towards the Business they advocate.
5. De-risks the overall Business:
When a company has a loyal and ever-increasing base of brand advocates, the indications are that its future is secure. Around 65 percent of the Business comes from existing customers, and SO percent of future profits are likely to go from 20 percent of existing customers. Brand advocates are loyal customers.
You will notice that brand advocates help grow revenue, reduce cost, expand margins, increase the bottom line, and de-risking Business.
Can Brand Advocacy Be Measured?
The Net Promoter Score (NPS) measures brand advocacy. You should keep an eye on a substantial number because analysis done by Bain & Company shows companies achieving long-term profitable growth have an NPS that is two times higher than an average company.
To calculate NPS, customers are requested to score on a single question: based on your experience, how likely are you to recommend the product to your friends and family on a scale of 0 to 10?
The Company collects this feedback from many customers, and based on their response; customers get classified as:
#Promoters: Happy and loyal customers who buy from the Company and recommend it to their friends.
#Passive: Barely satisfied customers who can be easily coaxed away by competitors.
#Detractors: Unhappy customers who are prone to defects. They account for more than 😯 percent of negative buzz. This impacts the Company’sCompany’s reputation, demoralizes employees, and puts off new customers.
NPS is calculated by subtracting the ‘percentage of promoters’ from ‘percentage of detractors.’
So, what is a good NPS score to aim for? It should always be positive, and you should aim to keep improving it all the time.
We would strongly recommend that NPS be used along with another metric: the Customer Effort Score (CES). CES measures how easy or difficult it is for customers to get ‘help’ from the company. If the customer finds it challenging to get help, she may not repeat Business or remain loyal to the company.
What Should You Do to Cultivate Brand Advocates?
• Invest your resources in creating an insanely great product/services that convert customers into brand advocates who then spread the right word.
Craft a strategy to induce trial of your product among your brand advocates.
Activate your brand advocate by starting Referral Program, opportunities for posting testimonials. Refrain from influencing brand advocates by bribing them with money.
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