A recent BCG study of more than 300 brands in 12
industries found a very strong positive correlation between BAI (Brand Advocacy
Index) and top-line growth—81 percent,
or double that of other measures of customer promotion.
It’s no mystery why advocacy both correlates with and
drives growth. Measured accurately, advocacy provides a sense of the quality of
a company’s operations and offerings. It also helps companies cut through the
clutter in a world saturated with media messages
BCG ‘s survey of
more than 32,000 consumers also shows that people are losing their trust in
traditional mass media. When consumers are confronted with an important
purchasing decision, they seek recommendations from sources such as friends,
family, coworkers, and increasingly, other consumers. This is still a
predominantly offline phenomenon, however: an estimated 90 percent of consumer conversations about brands take
place in the real world rather than through the much smaller but growing
source of social media.
The study from BCG, throws open the debate on the power
of mass media advertising. While advertising helps in retaining the brand
memory, but the influence of purchasing has shifted from media to advocacy. Today
millions of people are connected through internet or Smartphone’s and they get information’s
and feedbacks about products on real time basis.
The networking has become a
major power play and people are increasingly getting inclined towards taking
opinions regarding the choice of products.
Interestingly major brands have their top line
performance influenced by the brand advocacy. The chart above is a significant
proof for products across industries.
This leads to the major question
Should there be a cut in mass media spending by brands
and products or that should co exist?
Cutting down on advertising and spending more on
product quality and service standards can play the trick. If the biggest influence
is customer advocacy on products and services, then quality of the same will be
more critical than spending on connecting with the people.
Word of mouth can be a powerful tool and less expensive
in connecting with the people.
The challenge will be tradeoff between media
spending for visibility and investment on meeting ever increasing customer
expectations. Many organizations believe once a product is created and quality
is established, the rest will be taken care by the visibility levels created
for attracting people to buy.
But then the process doesn’t end there as the world has
moved head from customer satisfaction to exceeding customer expectations to
customer delight. So continuous innovations, and collaborating with people in
the process of improvement on the product and services are key factors which
will play positively on brand advocacy.
Successful companies are embarking on such new thought process
to ensure they not only work on retention memory through media source but also
get connected with customer for brand advocacy.
T Margabandhu
Marggo India
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