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Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 1
Advocacy Drives Growth
Customer Advocacy Drives UK Business Growth
Published in Brand Strategy (Dec 2005)
Dr Paul Marsden
London School of Economics
p.s.marsden@lse.ac.uk
Alain Samson
London School of Economics
a.samson@lse.ac.uk
Neville Upton
The Listening Company
nevilleupton@listening.co.uk
Summary
Word of mouth is found to predict sales growth for retail banks, car manufacturers, mobile phone networks
and supermarkets in the UK. A telephone survey of a random sample of 1256 adult consumers in the UK
found that both word of mouth advocacy rates (as measured by the Net Promoter® score) and negative word
of mouth were statistically significant predictors of annual 2003-2004 sales growth (Pearson’s correlation
coefficients of r=.484 and significance of p < .01 for Net Promoter score, and r=-.524, p < .01 for negative
word of mouth).
Companies enjoying higher levels of word of mouth advocacy (higher net promoter scores), such
as HSBC, Asda, Honda and O2, grew faster than their competitors in the period 2003-2004.
Companies suffering from low levels of word of mouth advocacy and high levels of negative word
of mouth, such as Lloyds-TSB, Sainsbury’s, Fiat and T-Mobile grew slower than their competitors.
In terms of percentage growth, a 7 point increase in word of mouth advocacy (net promoter score)
correlated with a 1% increase in growth (1 point increase = .147% more growth).
Every 2% reduction in negative word of mouth correlated to just under 1% growth (a 1% reduction
= .414% more growth).
In cash terms, for the average business in our analysis, every 1 point increase in word of mouth
advocacy (net promoter score) correlated with an £8.82 million increase in sales, whilst a 1%
reduction in negative word of mouth would lead to £24.84m additional revenues;
Taking the net promoter score and negative word of mouth together, we found that companies with
relatively high net promoter scores (>0), and relatively low negative word of mouth rates (<25%),
grew 4 times as fast in 2004 than companies with low net promoter scores (<0) and high negative
word of mouth (>25%).
A literature review of techniques for optimizing word of mouth advocacy and thereby unlocking
growth identified 8 distinct techniques; Referral Programs, Tryvertising, Empowered Involvement,
Brand Ambassador Programs, Causal Campaigns, Influencer Outreach, Advocacy Tracking and
Innovation. We provide brief case studies for each of these growth-by-advocacy tools.
We conclude by suggesting that the net promoter score as a measure of word of mouth advocacy may be
useful not only in predicting sales growth, but also in predicting share performance and employee
productivity. Specifically we propose that three simple questions could predict overall business
performance;
Likelihood that customers would recommend a company or brand to friends or colleagues. Net
promoter score as a predictor of sales growth.
Likelihood that investors would recommend investing in a company to friends or colleagues. Net
promoter score as a predictor of share performance.
Likelihood that employees would recommend working for their company to friends or colleagues.
Net promoter score as a predictor of productivity.
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 2
Introduction
The Economics of Buzz
What’s the financial value of word of mouth – product
recommendations from friends, colleagues and
acquaintances? The value of word of mouth to the
buyer is undisputable; people systematically rate word
of mouth advice above all other forms of
communication when deciding what to buy [1].
Whether it’s a FTSE100 CEO choosing a consulting
firm or investment bank, or a supermarket shopper
after the best olive oil, word of mouth
recommendations are likely to play a key part in the
decision. The logic is simple; word of mouth reduces
risk for the buyer – it is free borrowed experience
perceived as trustworthy because, unlike advertising, it
has nothing to sell but itself.
But what’s word of mouth worth to a business – in
terms of the sales it generates? What, in other words,
are the hard economics of buzz? A litany of statistics
exists to show that buzz is valuable to buyers [2], but
there is precious little that puts numbers on the value of
buzz to business. The main problem is that word of
mouth is rather tricky to measure – short of
eavesdropping on client, customer or consumer
conversations. Whilst the Internet is making digital
eavesdropping of ‘word of mouse’ a real possibility –
monitoring product-talk in forums, blogs and review
sites – most word of mouth takes place offline in
traditional face-to-face situations, which makes it to all
intents and purposes, invisible.
One solution to the economics of buzz, recently
pioneered by Bain & Company consultant Fred
Reichheld and Satmetrix Systems, has been to use
surveys to track recommendation rates for different
products and services and correlate these with sales
growth. In a recent US analysis published in the
Harvard Business Review, Reichheld found that a
single question; the likelihood (0-10) that buyers of a
product or service would recommend it to a friend
could predict growth. By subtracting neutral and
negative responses (buyers dubbed as word of mouth
“detractors”) from positive ones (buyers known as
word of mouth “promoters”), the resulting “net
promoter” score was found to correlate with company
sales growth across a dozen product and service
categories in the US. The higher the net promoter
score, the higher the growth. Interestingly, other
measures such as customer satisfaction, category
leadership, or innovativeness were not found to predict
growth [3].
Figure 1: The Net Promoter® Link to Growth
The net promoter score – as a measure of word of
mouth – is beginning to establish itself as a key
performance metric in a number of US businesses. The
‘would recommend’ question is simple, fast and cost-
effective to research, prompting General Electric CEO
Jeffrey Immelt, among others to roll out net promoter
tracking across GE’s divisions [4]. With its link to
sales growth, the net promoter score is proving to be a
useful diagnostic tool in identifying those areas in a
business that are driving growth, and those that are
hampering it.
Word of Mouth and Business Growth
By finding an empirical link between word of mouth
recommendations and sales performance among US
companies, the Reichheld study answered two thorny
business questions: How do you measure word of
mouth? (Answer: the net promoter score). And how do
you measure the effect of word of mouth? (Answer:
sales uplift). However, the Bain & Company findings
prompt a number of questions: Was the relationship an
isolated fluke result based on a particular time period
(1999-2002), or a specific geographic market (US) or a
peculiar calculation (net promoter score)? And if word
of mouth does influence sales as the results suggest,
what is the financial value of this influence? And,
finally, and perhaps most importantly if word of mouth
advocacy drives growth, how can businesses harness it,
practically speaking, to enhance performance?
The Net Promoter score, the word of mouth metric found by
Bain & Company and Satmetrix Systems in 2003 to predict
growth is based on the responses to a simple question on the
likelihood of recommending a product of service. The net
promoter score is calculated by taking the share of customer
‘promoters’ - respondents highly likely to recommend
(scoring 9-10), and subtracting the share of customers who
are detractors (scoring 0-6). Across US companies
surveyed by Bain & Company, the average net promoter
score was 11% – although high-growth companies were
found to have net promoter scores in excess of 70%.
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 3
The 2005 LSE
Advocacy-Growth Study
To answer these questions, and to assess the financial
impact of word of mouth advocacy on company growth
in the UK, we conducted the following study at the
London School of Economics in the early summer of
2005.
With the aid of The Listening Company, we carried a
telephone survey on a random sample of 1256 adult
consumers in the UK. Respondents were asked how
likely it was they would recommend their current bank,
mobile phone network, supermarket and make of car
(if they owned a car) to a friend, or colleague. They
were also asked whether they had in fact made any
such recommendations in the last twelve months and,
on the contrary, if they had spread any negative
comments. Finally, as a control question, they were
asked how satisfied they were with the brands they
were currently using.
From the data, we calculated three measures of word of
mouth, and one for satisfaction. For word of mouth,
we calculated the net promoter score for each company
(proportion of word of mouth “promoters” minus the
proportion of word of mouth “detractors”), the
proportion of customers who had actually
recommended the company or brand they use to others
in the last 12 months, and the proportion who had
spread negative comments during the same time
period. For customer satisfaction, we calculated the
average (mean) customer satisfaction score (out of 10)
for each company.
We then collected 2003 and 2004 sales data for the
banks, mobile phone networks, supermarkets or car
manufacturers mentioned, and calculated 2003-2004
sales growth [5]. Correlations were then computed to
see if the word of mouth metrics and satisfaction scores
could predict sales growth performance.
Key Finding: Word of Mouth Drives UK
Business Growth
Analysing the entire data set, we found that overall two
metrics were statistically significant in predicting 2004
business growth: word of mouth as measured by the
net promoter score (Pearson’s correlation coefficients
of r=.484 and significance of p < .01) and negative
word of mouth (r=-.524, p < .01).
Companies in the UK with a high net promoter score,
such as HSBC, Asda, 02 and Honda outperformed their
competitors in terms of growth in 2004, whilst those
with low net promoter scores, such as Lloyds-TSB,
Safeway, Fiat and T-Mobile underperformed. We also
found that prior growth (2002-2003) did not correlate
with the net promoter score, showing that it is word of
mouth that drives growth and not vice versa.
Figure 2: Customer Advocacy Drives UK
Business Growth
Overall, the higher a company’s net promoter score,
the higher 2003-2004 sales growth. On average, across
the four sectors researched, the average net promoter
score for UK companies was found to be 3% - nearly
four times lower than the average company in the US
survey (11%) – although this varied significantly sector
by sector (see figure 3). The relationship between word
of mouth as measured by the net promoter score and
growth was also found to hold on a sector by sector
basis.
Figure 3: Average Net Promoter Scores: Overall
and by Sector
Sector
Word of Mouth
(Mean Net promoter
Scores)
Mobile Networks -18.1
Retail Banks -4.8
Supermarkets -2.3
Cars +24.7
Overall +3.2
Consider the relationship between word of mouth and
recent revenue growth among UK major mobile phone
networks, a sector with particularly low advocacy
levels.
Figure 4: Word of Mouth Drives Growth in the UK
Mobile Sector
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 4
To measure the impact of word of mouth on retail bank
performance, we took changes in banks’ total assets in
customer accounts as well as total income including
interest, as a proxy for growth (retail banks do not have
sales revenues per se), and examined this in relation to
word of mouth. The correlations with the net promoter
score for both of these variables turned out to be
exponential for banks with positive growth figures
(r=.793 and r=.868, respectively, p < .05) [6]. The
effect of net promotion became particularly dramatic as
the score approached zero. This suggests that growth in
the retail banking sector is particularly susceptible to
word of mouth.
Figure 5: Word of Mouth Drives Growth for UK
Retail Banks
Due to the nature of the car industry and their reporting
practices, 2004 sales volume data were more complete
than total revenue data. We found a significant
relationship between the net promoter score and car
sales volume [7] growth (r=.561, p < .05) and more
marginally revenue growth among companies who had
released sales data for 2004 (r=.767, p=.065).
Figure 6: Word of Mouth Drives Growth in the UK
Car Industry
Perhaps because it is easier for consumers to switch
supermarkets than cars, banks or mobile phone
networks, word of mouth appears to have particularly
strong impact on sales growth. We found that 2004
growth for different supermarkets was highly
correlated with both net promotion (r=.697, p < .05)
and actual negative word of mouth (r=-.899, p < .01).
Figure 7: Word of Mouth Drives Growth for UK
Supermarkets
More Good Buzz is Good, Less Bad
Buzz is Better
Whilst positive word of mouth alone, as opposed to the
net promoter score that takes into account word of
mouth promoters and word of mouth detractors, did not
predict growth, we did find that negative word of
mouth alone does predict growth. Companies
attracting high levels of negative word of mouth, which
tended to be, logically enough, those companies with
low net promoter scores, published poorer results – in
terms of growth – than those enjoying low levels of
negative word of mouth.
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 5
Figure 8: Bad Buzz Destroys UK Business Growth
Figure 9: Negative Word of Mouth Rates for UK
Retail Business Sectors
Sector Negative Word of Mouth
(% customers spreading negative
comments in last 12 month)
Mobile Networks 23.7%
Retail Banks 27.3%
Supermarkets 25.0%
Cars 20.6%
Overall 23.8%
Show Me the Money
Overall, across all the companies researched, we found
that a 7 point increase in the net promoter score
correlated with a 1% increase in growth (1 point
increase = .147% more growth). In cash terms, for the
average business in our analysis, every 1 point increase
in the net promoter score correlated with an £8.82
million increase in sales.
Similarly, every 2% reduction in negative word of
mouth, correlated to just under 1% growth (1%
reduction = .414% more growth). In monetary terms, a
1% reduction in negative word of mouth would lead to
£24.84m additional revenues.
Taking the net promoter score and negative word of
mouth together, we found that companies with
relatively high net promoter scores (>0), and relatively
low negative word of mouth rates (<25%), grew 4
times as fast in 2004 than companies with low net
promoter scores (<0) and high negative word of mouth
(>25%).
How to Drive Growth by
Customer Advocacy
The key finding of this research is that word of mouth
advocacy drives growth; companies enjoying high
levels of word of mouth advocacy and/or low levels of
negative word of mouth grow fast, whilst those
businesses with low advocacy levels and/or suffering
from high levels of negative buzz, stagnate or decline.
The business implication is self-evident – businesses
that build customer advocacy will grow. But how?
How can businesses unlock growth by turning clients,
customers or consumer into word of mouth advocates?
To answer this question, we conducted a literature
review of 30 published business books dealing with
word of mouth, looking for proven advocacy
optimization solutions [8]. We identified eight distinct
advocacy-generating tools that have demonstrated
themselves to be effective.
Figure 10: Eight Tools for Driving Growth by
Optimizing Customer Advocacy
GROWTH BY ADVOCACY TOOL #1:
REFERRAL PROGRAMS: The most elementary
solution for optimizing customer advocacy levels is to
put in place a referral program that rewards existing
costumers for recommending new customers. Also
known as customer-get-customer, introduce-a-friend or
member-get-member schemes, referral programs offer
cash or gift incentives to satisfied customers who
become word of mouth advocates. Whilst such
initiatives are typically associated with subscription
services, such as the original ‘Friends and Family’
referral scheme for US telephone operator MCI in 1991
that generated 10 million new subscribers in less than
two years [9], referral programs can also work for
Innovation
A
dvocacy
Tracking
Influencer
Outreach
Causal
Campaigns
Brand
Ambassador
Programs
Empowered
Involvement
Tryvertising
Referral
Programs
Growth by
Customer
Advocacy
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 6
consumer packaged goods. For example, Unilever ran
an effective referral program in 1998 for its Dove soap
brand. The scheme involved allowing existing Dove
users to order a free Dove gift pack of soap and
vouchers for a nominated friend, in return for which
they too would receive a Dove gift pack.
Psychologically, rewarding both the referrer for
referring and the ‘referree’ for being referred was
powerful because it gave the referrer an excuse to refer
not based on self-interest. In terms of stimulating
growth, this ‘Share-a-Secret’ referral program as it was
known was a success – contributing to a 10% increase
in Dove’s market share [10].
GROWTH BY ADVOCACY TOOL #2:
‘TRYVERTISING’: A relatively new marketing term,
‘tryvertising’ (a combination of ‘try’ or ‘trial’ and
‘advertising’) is a twist on product sampling. The idea
is that rather than provide free samples or trials to
anyone in a target market, tryvertising involves
sampling on a selective and exclusive basis to lead
users – ideally with new products or services before
they become widely available. The goal is to both
remove the price barrier to trial, and to use exclusivity
and scarcity to turn the ‘privileged’ trial participants
into advocates who then showcase the innovation to
others. In the technology sector, this is the hard-nosed
commercial principle behind ‘beta-testing’, turning
lead customers into advocates by giving them sneak
peeks of new yet-to-be-launched products. Fashion
brands also use tryvertising initiatives to drive growth
by inviting trendsetters to participate in exclusive trials.
For example, the BCBG fashion brand recently ran a
successful tryvertising campaign to launch their new
fragrance BCBGirl. The campaign involved sending
teen trendsetters a pre-launch bottle of the perfume,
along with 100 samples each to share with their
friends. In cities where this advocacy-by-tryvertising
initiative was run, BCBGirl shot to the bestselling spot
on the week of its launch [11].
GROWTH BY ADVOCACY TOOL #3:
EMPOWERERED INVOLVEMENT: Empowering
clients, customers and consumers to call the shots on
new packaging, advertising, or even new products and
services, is an advocacy generating tool that harnesses
a powerful psychological phenomenon known as the
Hawthorne Effect. The Hawthorne Effect, named after
Western Electric’s production facility in Hawthorne,
near Chicago, where the effect was first identified by
researchers at Harvard in the 1930s, turns market
research participants into advocates by making them
feel they have had a say in how a product, service or
initiative is rolled out [12]. In plain English, the
Hawthorne Effect is simply the “I did that” effect, the
consequence of being asked one’s opinion and seeing it
acted upon. Think Big Brother/American Idol where
audience participation empowers viewers to vote
participants off the show. The Hollywood studio
Dreamworks SKG uses empowered involvement to
create word of mouth advocates, and recently doubled
teen attendance for a movie by allowing its target
audience to vote on and choose the title of the movie in
a web poll [13]. Web polls, SMS votes and other
innovations in personal communications technology
mean that empowered involvement has become a fast,
scalable and cost-effective solution for creating
advocacy – and thereby stimulating growth. For
example, Procter & Gamble use online voting to give
consumers the final say in which new product variants
should be launched, such as new flavours in the Crest
toothpaste range [14]. The impact on growth of such
advocacy-by-empowerment initiatives appears to be
impressive: Crayola, the crayon brand, reported a jump
in sales when they allowed consumers to vote on the
name of new crayon colours, whilst Tremor, an online
US-wide customer empowerment panel with some
250,000 members set up in 2001 and working with
brands such as Sony, AOL, Toyota estimates the sales
uplift effect of empowered involvement initiatives to
be 10-30% [15].
GROWTH BY ADVOCACY TOOL #4:
BRAND AMBASSADOR PROGRAMS: A fourth
way of transforming customers into advocates is to
invite highly valued and satisfied customers to become
brand ambassadors. Brand Ambassador Programs
work by giving chosen customers special privileges
both for themselves and to share with their friends.
These privileges may include exclusive offers, special
invites, and sneak peeks of new products or inside
scoops of brand news. The idea is to give the Brand
Ambassador materials that help them promote the
brand. For example, L’Oreal, O’Neill, Siemens and
Unilever all run Brand Ambassador Programs that
involve providing brand fans with their own sets of
personal contact cards featuring brand artwork on one
side and personal contact details on the other. As well
as making Brand Ambassadors feel like privileged
‘insiders’, part of the brand family, the cards can
contain a special privilege code – allowing them to
share exclusive promotions with their friends and
colleagues [16].
Figure 11: Brand Ambassador Cards
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 7
GROWTH BY ADVOCACY TOOL #5:
CAUSAL CAMPAIGNS: A fifth tool for unlocking
growth by customer advocacy is to adopt a good cause
as a strategic positioning and marketing tool that
appeals to existing and target buyers. Adopting a good
cause not only increases sales directly by providing an
additional ‘reason to choose’, such as Nike’s
sponsorship in 2004 of the Lance Armstrong
Foundation for cancer research and education, but also
gives existing buyers a compelling ‘reason to
recommend’. The impact on sales can be dramatic.
For example, when Persil paired with Comic Relief,
sales increased by 13%, and when BT partnered
ChildLine, signups for its new voicemail service
increased 25% [17]. In the US, when American
Express pledged to donate a penny to the restoration of
the Statue of Liberty for every transaction made by its
cardholders, use of American Express cards in the US
increased by 28% and new users increased by 17%
[18]. By sponsoring a good cause, businesses can
mobilize their customers and create a volunteer sales
force with a compelling motive to evangelize.
GROWTH BY ADVOCACY TOOL #6:
INFLUENCER OUTREACH: Not so much a tool per
se as a strategic approach to targeting, where instead of
targeting the mass majority directly, the focus in on
influencing the influencers – who then influence the
majority by word of mouth. Influencers, the preferred
label today for ‘opinion leaders’, are the 10% of any
target market who frequently offer and are elicited for
category-related advice by friends and colleagues.
They are the friends and colleagues we turn to for
advice when choosing a new product or service. As a
group, influencers/opinion leaders were first identified
in the 1940s in a landmark study by Columbia
University on media influence. The study found that
most people were relatively immune to direct mass
media influence, but were influenced indirectly by
people they knew and whose opinion they trusted.
These influencers were dubbed ‘opinion leaders’ – and
it was subsequently found that these opinion leaders,
unlike the mass majority, were influenced by the mass
media and other marketing initiatives [19]. Thus was
coined the term ‘two-step flow’ of influence –
influence the influencers who then influence the
masses by word of mouth. Influencer outreach
programs involve identifying influencers in a target
market (using influencer screeners), and then engaging
them with tools from the advocacy toolbox to
transform them into word of mouth advocates. For
example, 3M targeted influencers for its Post-It Notes
brand; 3M invited secretaries to CEOs to have a say in
how the product should be commercialized, and in
doing so created an army of influential word of mouth
advocates. After a failed mass market launch, 3M’s
influencer outreach program turned around a doomed
product with languishing sales, and through word of
mouth advocacy made it America’s 5th largest selling
office-supply product [20].
GROWTH BY ADVOCACY TOOL #7:
ADVOCACY TRACKING: By monitoring advocacy
levels through the net promoter score for products,
services and customer-facing departments, businesses
can identify what they are doing right and where there
is room for improvement. For instance, Enterprise
Rent-A-Car tracks net promoter scores across its 5,000
plus branch network in the US. Using a simple
customer feedback form, the business identifies high
performing and high improvement outlets, learns from
what they are doing right, and can focus resources on
problem branches. To underline its commitment to
customer advocacy, Enterprise Rent-A-Car links
compensation and staff promotion to advocacy rates
[21]. Other brands, including the Siemens Mobile, run
online advocacy trackers to track word of mouth,
positive and negative, in forums, blogs, and consumer
review sites, using the tracker as a diagnostic tool for
product enhancement, innovation and as a planning
tool for future marketing campaigns [22]. Apple,
tracking early word of mouth for its iPod digital music
player, picked up negative buzz around the product’s
battery that was difficult and costly to replace. The
problem was quickly amplified when a couple of
disgruntled iPod owners made a video clip called
‘iPod's Dirty Secret’ and posted it on the Internet
where it was seen 1.4 million times. By listening to the
bad buzz and by acting upon it – correcting the product
weakness through innovation – Apple was able to avert
a major PR disaster [23].
GROWTH BY ADVOCACY TOOL #8:
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 8
INNOVATION: Ultimately, clients, customers and
consumers will recommend a product or service when
it is worth recommending. No amount of advertising
hype or spin is likely to generate sustainable advocacy;
Just as advertising works when you have something
worth advertising, advocacy will drive growth when
you have something worth advocating. This means
that the key to driving growth through advocacy is
innovation. Using the psychology of word of mouth
provides a useful handle on how to innovate advocacy-
worthy products and services. The key here is to have
a product or service that delivers an experience that
exceeds expectations because we only tend talk about
things that are at odds with our expectations. In other
words, product-talk is triggered when the product
either exceeds or falls short of expectations. In
practice, what this means is that driving growth
through advocacy means identifying the expectation-
priorities of a target market – as opposed to needs or
satisfaction – and delivering experiences that exceed
those expectations. By identifying where customer
expectations can be profitably exceeded, and then by
focusing new product or service development in these
areas, businesses have the opportunity to hardwire
customer advocacy into innovation [24].
Conclusion: Advocacy as a
Performance Predictor
In this study, we found that the word of mouth
advocacy is linked to company growth in the UK – the
more clients, customers or consumers who are
advocates, the higher the growth. By increasing the net
promoter score, that is, word of mouth promoters
minus word of mouth detractors, by just 7 points UK
companies can, on average, expect to boost growth by
1%. Likewise by reducing negative word of mouth by
2% businesses can unlock a further 1% growth. We
also found that companies with above average net
promoter scores, and who also enjoy below average
negative word of mouth, grow 4 times as fast as those
suffering from above-average levels of negative word
of mouth and below average net promoter scores.
These findings suggest that businesses seeking year-
on-year growth may be overlooking their most
powerful growth-generating asset; existing clients,
customers or consumers. With a range of turn-key
solutions for optimizing word of mouth advocacy
amongst product or service adopters at their disposal,
businesses can transform satisfied buyers into vocal
advocates who become part of a volunteer sales force.
By delivering product and service experiences that
exceed expectations, and by stimulating and
amplifying the resulting customer advocacy, businesses
have a customer-centric key for unlocking growth.
Moreover, if we extend the advocacy-drives-growth
logic to other areas of business performance, notably
stock performance and employee productivity, it may
be that investor advocacy drives market capitalization
and employee advocacy drives business productivity.
We would predict that the simple ‘would you
recommend’ question will have predictive power when
posed to investors about investing in a particular
company, or to employees about working for a
particular company [26].
Figure 12: Predicting Overall Business
Performance: The Advocacy Trinity
Obviously, these hypotheses need to be refined,
qualified and above all tested, but the findings from
this research certainly support the relationship between
customer advocacy and sales growth. It will be for
Investor
Advocacy
Customer
Advocacy
Employee
Advocacy
Three Simple Questions to Predict Overall Business
Performance
1. To Investors: On a scale of 0-10, how likely is it that
you would recommend investing in [company X] to a
friend or colleague?
[Prediction Net Promoter score will predict share
performance]
2. To Customers: On a scale of 0-10, how likely is it that
you would recommend [company or brand X] to a friend
or colleague?
[Prediction – Net Promoter score will predict sales
growth]
3. To Employees: On a scale of 0-10, how likely is it that
you would recommend working for [company X] to a
friend or colleague?
[Prediction – Net Promoter score will predict
p
roductivit
y
]
Advocacy Drives Growth London School Economics
Contact p.s.marsden@lse.ac.uk (+44 (0)777 95 77 248) 9
future research to determine whether, in addition,
investor advocacy drives share performance and
whether employee advocacy drives productivity.
Dr Paul Marsden
Alain Samson
Neville Upton
Contact for Further Information p.s.marsden@lse.ac.uk
References
[1] For reviews see Salzman, M., Matathia, I. &
O’Reilly, A. (2003) Buzz: Harness the Power of
Influence and Create Demand. New Jersey: John
Wiley & Sons and Dye, R. (2000) ‘The buzz on buzz’,
Harvard Business Review 78(6):139-146.
[2] See Marsden, P. (2005) ‘Introduction: The
Connected Marketing Revolution’ in Kirby, J. and
Marsden, P. (2005) Connected Marketing: The Viral,
Buzz and Word of Mouth Revolution. London:
Butterworth-Heinemann.
[3] Reichheld, F. (2003) ‘The one number you need to
grow’. Harvard Business Review. Dec. pp. 1-11.
[4] Darlin, D. (2005) ‘The only question that matters’
Business 2. Aug (25). Archived online at
http://www.business2.com/b2/web/articles/0,17863,10
96274,00.html
[5] Sources: Mobile phone networks: annual reports
and FAME financial database (Bureau van Dijk
Electronic Publishing); Retail banking: annual reports;
Cars: annual reports and FAME database;
Supermarkets: annual reports and FAME database.
Annual revenues based on calendar years, except: WM
Morrison, Safeway, Tesco, Waitrose, Asda: year
ending January 31; M&S, Sainsbury’s, O2, Virgin
Mobile: year ending March 31. For VW and BMW
Sales figures are based on UK group revenues; for
Vodafone, UK share of group revenue. For banks,
reported total income was used as a proxy for turnover.
[6] Linear correlation obtained after log
transformations of growth values. Since zero or
negative growth figures do not permit log
transformations, Barclays Bank was excluded from this
calculation.
[7] Source: Automotive Unit of the Department of
Trade and Industry (autoindustry.co.uk).
[8] For a full list of books reviewed see
www.viralculture.com/advocacy/review.htm
[9] Rosen, E., (2000) The Anatomy Of Buzz: Creating
Word Of Mouth Marketing. London: Harper Collins.
[10] Kirby, J. and Marsden, P. (2005) Connected
Marketing: The Viral, Buzz and Word of Mouth
Revolution. London: Butterworth-Heinemann.
[11] Stradiotto, M. (2005) ‘Working with agents and
activists’. Conference paper presented at the Word of
mouth Marketing Association Summit Chicago March
29-30. Archived at http://tinyurl.com/7p4y3.
[13] Marsden, P. (2005) ‘Seed to Spread’ in Kirby, J.
and Marsden, P. (2005) Connected Marketing: The
Viral, Buzz and Word of Mouth Revolution. London:
Butterworth-Heinemann.
[14] Ibid.
[15] Story, L. (2005) ‘Consumers, long the targets,
become the shapers of campaigns’ The New York
Times (July 1). Section C , Page 3 , Column 1.
[16] Allard, S. Personal correspondence
[17] Rusticus, S (2005) ‘Creating Brand Advocates in
Kirby, J. and Marsden, P. (2005) Connected
Marketing: The Viral, Buzz and Word of Mouth
Revolution. London: Butterworth-Heinemann.
[18] Marsden, P (forthcoming) ‘Influencer Marketing’
PR Week Supplement, PR Week.
[19] Ibid
[20] Marsden (2005) op. cit.
[21] Rosen (2000) op. cit.
[22] Reichheld (2003) op. cit.
[23] Marsden (2005) op. cit.
[24] Sutter, S. (2005) ‘5 big trends: Consumer
empowerment.’ Marketing Magazine (April 4) Article
archived at
http://www.marketingmag.ca/magazine/current/feature/
article.jsp?content=20050404_67681_67681#
[25] For more on the role of expectations, and more
generally on the psychology of word of mouth see
Sundaram, D., Mitra, K, & Webster C. (1998) Word of
mouth communications: A motivational analysis’.
Advances in Consumer Research. Vol 25. pp. 527-531.
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Preprint
Consumer sentiment analysis is a recent fad for social media related applications such as healthcare, crime, finance, travel, and academics. Disentangling consumer perception to gain insight into the desired objective and reviews is significant. With the advancement of technology, a massive amount of social web-data increasing in terms of volume, subjectivity, and heterogeneity, becomes challenging to process it manually. Machine learning techniques have been utilized to handle this difficulty in real-life applications. This paper presents the study to find out the usefulness, scope, and applicability of this alliance of Machine Learning techniques for consumer sentiment analysis on online reviews in the domain of hospitality and tourism. We have shown a systematic literature review to compare, analyze, explore, and understand the attempts and direction in a proper way to find research gaps to illustrating the future scope of this pairing. This work is contributing to the extant literature in two ways; firstly, the primary objective is to read and analyze the use of machine learning techniques for consumer sentiment analysis on online reviews in the domain of hospitality and tourism. Secondly, in this work, we presented a systematic approach to identify, collect observational evidence, results from the analysis, and assimilate observations of all related high-quality research to address particular research queries referring to the described research area.
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Customer feedback is an essential criterion for upcoming customers to learn from their experience with a company’s products. Customer reviews and ratings also help companies improve performance and figure out new methodologies to provide better services. This research concentrates on customer reviews and ratings to investigate which product a customer evaluates and its association with its recommendations. This work predicts the user recommendations in two modules. The first module performs sentiment analysis of customer reviews using the long short-term memory (LSTM) model, which estimates the probability of the customer’s sentiment about the airline’s services. The second module experimented over only various service aspect ratings on different airline services provided by customers. These two modules ensemble together to determine the predictive recommendations of the airlines. The obtained results reinforce the essential theoretical contribution to the literature on service appraisal, online review, and recommendations. In addition, our proposed ensemble approach will be helpful to those practitioners who wish to use any proposal that will provide a quick and essential vision by bringing together customer-generated reviews and ratings, thereby helping them in strategy designing, service improvement, and post-purchases planning. Also, forthcoming travelers may benefit from this proposed approach by assimilating an aggregating view of service quality.
Chapter
This chapter critically reviews literature concerning several ideas, methodologies and instruments that have been used to understand the societal impact of public services and Public Service reform; or that can be associated with related potential. These are namely the Net Promoter Score (NPS), Service Quality (SERVQUAL), Customer Satisfaction (CSAT) and trust in Public Services. A plethora of studies document the relevance of these societal impact metrics to private enterprise; whilst there is evidence of a growing support for deployment in the public sector and in gauging users’ experience of private and public e-services. A headline finding of the literature review is that conceptual complexities ought not to be ignored; for example, the many possible interpretations of ‘satisfaction’ and the empirically ambiguous association between trust in public services and trust in government. The use of the term ‘customer’ for users of public services emerged as debatable. Another main finding is that attention is due to methodological limitations of societal impact metrics. Thus, whilst CSAT measures customer satisfaction with a product or service at the moment of consumption, the more sophisticated NPS has the added value of capturing customer loyalty; whilst SERVQUAL illuminates different and versatile dimensions of the service-user experience. Whilst no metric alone is likely to be enough to gauge societal impact, hybrid tools should factor-in context. Ultimately, societal impact concepts and metrics should not be seen as an end, but only as an initial informant on Public Service reform.
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Enthusiastic customer endorsements can significantly influence buying decisions and drive sales. In service contexts, advocates are especially important because the specific and complex characteristics of services make personal recommendations very effective. Customer advocacy communications differ from other positive word of mouth (PWOM), though literature on advocacy is surprisingly sparse and inconsistent. Notably, advocacy is strong, passionate, explicit, and ongoing, with an explicit goal of positively influencing others’ views. As its central theoretical contributions, this article defines advocacy; identifies advocacy as a distinctive form of PWOM; conceptualizes advocacy according to a hierarchy of behaviors, which increase in intensity and effort; and develops a robust, reliable advocacy scale. By investigating positive behavioral outcomes of different levels of advocacy, this study also reveals the importance of identifying strong advocates, rather than just those who give PWOM, as well as salient drivers of advocacy. Accordingly, this article establishes a platform for further investigations of the importance of advocates, as well as recommendations to help managers identify these potentially valuable advocates.
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Companies spend lots of time and money on complex tools to assess customer satisfaction. But they're measuring the wrong thing. The best predictor of top-line growth can usually be captured in a single survey question: Would you recommend this company to a friend? This finding is based on two years of research in which a variety of survey questions were tested by linking the responses with actual customer behavior--purchasing patterns and referrals--and ultimately with company growth. Surprisingly, the most effective question wasn't about customer satisfaction or even loyalty per se. In most of the industries studied, the percentage of customers enthusiastic enough about a company to refer it to a friend or colleague directly correlated with growth rates among competitors. Willingness to talk up a company or product to friends, family, and colleagues is one of the best indicators of loyalty because of the customer's sacrifice in making the recommendation. When customers act as references, they do more than indicate they've received good economic value from a company; they put their own reputations on the line. And they will risk their reputations only if they feel intense loyalty. The findings point to a new, simpler approach to customer research, one directly linked to a company's results. By substituting a single question--blunt tool though it may appear to be--for the complex black box of the customer satisfaction survey, companies can actually put consumer survey results to use and focus employees on the task of stimulating growth.
Buzz: Harness the Power of Influence and Create Demand
  • M Salzman
  • I Matathia
  • A O'reilly
  • R Dye
For reviews see Salzman, M., Matathia, I. & O'Reilly, A. (2003) Buzz: Harness the Power of Influence and Create Demand. New Jersey: John Wiley & Sons and Dye, R. (2000) 'The buzz on buzz', Harvard Business Review 78(6):139-146.
Connected Marketing: The Viral, Buzz and Word of Mouth Revolution
  • J Kirby
  • P Marsden
Kirby, J. and Marsden, P. (2005) Connected Marketing: The Viral, Buzz and Word of Mouth Revolution. London: Butterworth-Heinemann.
The only question that matters' Business 2
  • D Darlin
Darlin, D. (2005) 'The only question that matters' Business 2. Aug (25). Archived online at http://www.business2.com/b2/web/articles/0,17863,10 96274,00.html
Mobile phone networks: annual reports and FAME financial database (Bureau van Dijk Electronic Publishing); Retail banking: annual reports
  • Sources
Sources: Mobile phone networks: annual reports and FAME financial database (Bureau van Dijk Electronic Publishing); Retail banking: annual reports;
Working with agents and activists'. Conference paper presented at the Word of mouth Marketing Association Summit Chicago March 29-30
  • M Stradiotto
Stradiotto, M. (2005) 'Working with agents and activists'. Conference paper presented at the Word of mouth Marketing Association Summit Chicago March 29-30. Archived at http://tinyurl.com/7p4y3.
Consumers, long the targets, become the shapers of campaigns' The New York Times
  • L Story
Story, L. (2005) 'Consumers, long the targets, become the shapers of campaigns' The New York Times (July 1). Section C, Page 3, Column 1.
Connected Marketing: The Viral, Buzz and Word of Mouth Revolution
  • S Rusticus
  • J Marsden
Rusticus, S (2005) 'Creating Brand Advocates in Kirby, J. and Marsden, P. (2005) Connected Marketing: The Viral, Buzz and Word of Mouth Revolution. London: Butterworth-Heinemann.