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CX vital to brand advocacy

News, 11 September 2015

BOSTON: In an omnichannel world, brand advocacy is a reliable indicator of business performance, according to BCG, making the customer experience a crucial element of a marketer's toolkit.

The consulting firm used its Brand Advocacy Index to measure the experiences of more than 227,000 customers with 650 brands in eight countries and seven industries and reported that direct word-of-mouth recommendations from friends and family were four to five times more influential than indirect recommendations associated with newspapers, magazines, television and social media.

And the impact of such endorsements could be significant, as brands with high levels of advocacy significantly outperformed those that were heavily criticised.

In the sample of brands studied by BCG, the average difference between the topline growth of the highest- and lowest-scoring brands was 27 percentage points.

"Strong advocates for a brand spend more, as measured by higher rates of cross-selling, larger shares of wallet, and other industry-specific metrics," it said. "A better experience leads to greater revenues, loyalty, and growth."

The reverse was also true. Strong critics were more likely to switch brands and many would continue to talk negatively about the one they had left, a behaviour that was often noticeable in industries with contractual relationships, such as mobile, broadband and retail banking.

Four particular aspects of the customer experience were highlighted as having an impact on brand advocacy – value for money, customer service, product satisfaction, and emotional connection – with the mix depending on industry and segment.

Thus, product satisfaction (35%) and emotional connection (28%) were most important for smartphone consumers, while value for money (30%) and customer service (27%) topped the priorities for those in the market for car insurance.

While a brand can control the rational factors, emotional factors, such as brand identification, social responsibility, innovation and trustworthiness, are often what separates the good from the great, said BCG.

That may require marketers to play a long game; offering gifts that matter to target customers without expecting anything in return, for example, will increase affinity with the brand.

Data sourced from BCG; additional content by Warc staff