customer acquisition

Brand Advocates Are Customer Acquisition Machines: Each Will Bring You 3 New Customers

Fun fact: Customer acquisition is the top priority for B2B companies according to BtoB Magazine. Here's an even funner fact: Each energized Brand Advocate will bring a company three new customers. The best part? You don't have to pay them!

A new Zuberance report lays out the business case for advocacy and shows why energizing Brand Advocates is a highly effective and cost-efficient strategy for boosting customer acquisition.

First, what do we mean by an “energized Advocate?” This is a highly-satisfied customer that authentically recommends your brand, product, or service, whether it’s face-to-face, on social networks or third party review sites, via email, etc.

Advocates Deliver $567 Million for an Enterprise Software Company

In their book, Answering the Ultimate Question, How Net Promoter Can Transform Your Business, authors Richard Owen and Dr. Laura L. Brooks stated that, on average, each Advocate for an enterprise software company will bring in about one-half of a customer via referrals (the actual number was .54). The average customer spend within this industry is $1.05 million. In other words, 1,000 Advocates would bring in 540 new customers, generating a whopping $567 million for the company.

Each Advocate Brings You 3 New Customers

Using .54 as the base case for advocacy, we add 2.5 new customers. Why? There are four additional factors that were not accounted for in Owen and Brooks’ original estimate.

1. Advocates are highly effective “sales people.”

Living in the era of social media, we all know that people trust their peers more than advertising (92% vs 24% in fact, according to Nielsen). Plus, 89% of people say online reviews influence their purchase decisions, according to the eTailing Group. Parallels, a desktop virtualization software company, got a stunning 30% sales conversion rate – about 60X higher than traditional online conversion rates – when Advocates shared offers on Facebook, Twitter, LinkedIn, and via email.

2. Advocates are frequent recommenders.

In many high-interest categories like restaurants, travel and tourism, and media and entertainment, Advocates refer many more than four prospects. (This was the assumption in the Owen and Brooks analysis.) For example, think about the incredible hotel you stayed at during your recent trip to New York and how many friends and colleagues you raved to afterwards. In fact, 28% of Brand Advocates recommend their favorite brands and products once weekly (source: Three Surprising Facts About Brand Advocates, Zuberance).

3. Advocates recommend in multiple ways.

In addition to referrals, Advocates drive sales by creating positive reviews and testimonials plus sharing promotional offers and content with their social networks. These activities drive not just social chatter, but sales.

4. Empowered by social media, Advocates reach thousands of prospects.

Since Owen and Brooks conducted their study in 2008, the adoption and use of social media has skyrocketed. Facebook’s Paul Adams states in his book, Grouped, that one Advocate recommendation reaches 10,000 people if it’s passed along only three times.

Depending on the size of your Advocate army and customer lifetime value, energizing your brand’s Advocates may boost several millions of dollars in sales. And since you don’t need to pay authentic advocates, the cost of acquiring customers via advocacy is dramatically less – about 50 percent less in many cases – compared to traditional marketing programs like paid media advertising. Now is the time to turn your Advocates into powerful and inexpensive customer acquisition machines.

Download "The Business Case for Advocacy" now to learn more.

-Cara Fuggetta, Marketing Manager, Zuberance

Upcoming 10/26 Webinar: Turning Fans & Followers into Brand Advocates #LikesToLeads

Getting more fans and followers is great. Finding your Brand Advocates and energizing them to generate Social Recommendations is even better. REGISTER NOW

Date: Wed, Oct 26, 2011 Time: 11am-12pm PST Twitter hashtag: #LikesToLeads Sponsors: Zuberance & Gleanster

Many marketers today are focused on building their social following on Facebook, Twitter, and other channels. However, clicking a ubiquitous “Like” or “Follow” button is the lowest common denominator when it comes to showing brand affinity. To gain true social marketing value, companies should identify their most enthusiastic fans and followers (AKA Brand Advocates) and energize them to share recommendations to their social networks. That’s exactly what Top Performers are doing, according to new Gleanster research. How they’re doing it, what technologies, business processes, and organizational resources they’re implementing, what metrics they’re using to track and measure success, and what specific business benefits they’re deriving as a result of their efforts are the focus of this webinar.

Register for the webinar and learn how to:

  • Identify your Brand Advocates amongst your fans and followers
  • Turn likes into leads
  • Reduce customer acquisition costs via your fans and followers
  • Energize your fans to generate social recommendations

Featured Speakers:

All registrants will receive a free copy of:

About the Speakers

Umang Shah, Social Strategist, Microsoft

Umang Shah is a Social Strategist at Microsoft, responsible for engaging customers and partners in the US Small and Midsize Business market.  Prior to Microsoft, he founded Cubed Consulting, a small Integrated Marketing consultancy providing services to emerging and evolving businesses in the San Francisco Bay Area.  During his time at the Xerox Corporation, Umang became a recognized Thought Leader in Customer Marketing and Social Media.  He led a Digital Marketing Team (unofficially) tasked with “making Xerox cool again” through the creative application of emergent technologies.  Umang has served as the Social Media Strategy Advisor to VC Taskforce and was also responsible for launching innovative Customer Marketing programs for BEA Systems and VMware.  Umang is currently based in Bellevue, WA.

Jeff Zabin, Research Director, Gleanster

Jeff Zabin is research director at Gleanster, where his coverage includes social media marketing and monitoring. Until December 2009, he served as vice president and research fellow at Aberdeen Group. Zabin is the author of two bestselling business books: The Seven Steps to Nirvana and Precision Marketing. He has written more than a hundred influential articles in leading trade magazines as well as dozens of popular industry reports. Prior to joining Aberdeen in 2007, Zabin headed up product marketing and led the thought leadership program for the Global Marketing Solutions division of Fair Isaac (FICO) and served as vice president of marketing at Seurat Company, which was acquired by FICO in 2003. Zabin began his career in educational publishing, at Houghton Mifflin, and later served as a Peace Corps volunteer in rural Bolivia. He is a graduate of the University of Wisconsin-Madison.

Rob Fuggetta, Founder/CEO, Zuberance

Rob Fuggetta, the founder and CEO of Zuberance, has more than 20 years of experience in Word of Mouth marketing, His WOM strategies have created marketing success for Apple, Intuit, Norton, and many others. Fuggetta is a frequent speaker and author of an upcoming book, "Energize! How to Turn Social Media & Word of Mouth into Sales by Energizing Brand Advocates."


How Much Money are You Losing by Not Activating Word of Mouth?

Many companies get more than half of their business from Word of Mouth (WOM.) How much money do companies lose when they wait to harness the power of WOM? Here's an example from the fitness industry. As the chart shows, this fitness club is losing $1.2 million in revenues by not energizing its highly-satisfied customers to spread positive WOM and generate referral leads.

This is actually a very conservative estimate on how much companies may be losing by not activating WOM, considering (again, using the fitness industry example):

  1. Many fitness companies generate much more than $1,200 per year per member. On average, each member at a higher-end fitness club may be spending about $5,000 per year.
  2. This estimate doesn't take into consideration the lifetime value of each member acquired via a WOM referral. If the average tenure of a member at a higher-end club is five years, the value of each customer acquired via WOM referrals is actually $25,000 (5 years x $5,000.)
  3. The estimate below is for a single member only. Family memberships are also from WOM referrals.

To calculate the value of energizing your Brand Advocates, download our "What's a Brand Advocate Worth?" whitepaper.

To learn how fitness chains can yield a 9X ROI by leveraging Word of Mouth, download the Club One Fitness case study.

-Rob Fuggetta, Founder/CEO, Zuberance

Multi-Industry Case Study: Turning Customers into a Powerful Marketing Force

successkid real

Download: Turn Your Customers into a Powerful Marketing Force If you're like lots of companies, you have a very valuable marketing resource just going to waste: Brand Advocates. They're your most passionate and influential customers. They're already recommending your products- with no incentive. Can you imagine what they'd do if you were working with them?

This report covers Word of Mouth Marketing success stories in various industries including:

  • Travel and Hospitality
  • Software
  • Health and Fitness
  • Consumer Electronics
  • Restaurants and Casual Dining

Download the Case Study to learn how:

  • Chili's energized their Advocates to share over 320,000 offers with their social networks.
  • Club One Fitness yielded a 9X ROI through their Advocates' recommendations.
  • A leading consumer electronics company increased their star ratings on Amazon from 2.5 to 4.1.

-Cara Fuggetta, Marketing Manager, Zuberance

Whitepaper: Turning Fans and Followers into Brand Advocates

Download: Turning Fans and Followers into Brand Advocates Many marketers today are focused on getting more fans and followers on Facebook and Twitter and increasing engagement on social channels via games, discounts, and promotions. But getting more fans and followers and increasing engagement don't necessarily translate to sales. The real social marketing value comes from finding your most enthusiastic fans and followers (AKA Brand Advocates) and energizing them to recommend your company to their social networks.

Download the whitepaper and learn how to:

  • Identify your Brand Advocates amongst your fans and followers
  • Turn likes into leads
  • Reduce customer acquisition costs via your fans and followers
  • Energize fans to recommend your brand and products to their networks

We want to hear from you! Feel free to share your thoughts on the whitepaper here.

-Cara Fuggetta, Marketing Manager, Zuberance

How Blurb Cut Customer Acquisition Costs in Half

Eileen Gittins, Founder & CEO of Blurb, a print-on-demand publishing service, discusses the tremendous impact that working with Zuberance has had on Blurb's marketing efforts.

Here are some key highlights that Blurb has seen within the first 90 days through leveraging the Zuberance Advocate Platform:

  • Blurb was able to cut customer acquisition costs in half compared to other marketing channels.
  • 42% of Blurb Advocates that were identified shared offers on Facebook, Twitter, and Email.
  • On average, one outbound share by Blurb Advocates generated one inbound click.
  • Each energized Advocate (Advocates that shared offers) brought in 1.6 new customers.
  • Redemptions of offers shared by Advocates had a 2X shopping cart total above average.

-Cara Fuggetta, Marketing Manager, Zuberance

Acquire and keep new customers- The retention effect of Word of Mouth

In a recent post, I expressed my thoughts on "Why Referral Programs Suck" from a brand's perspective. Now it's time to look at the weaknesses of referral programs from a consumer's perspective. Think back to a time when someone made a recommendation to you. Whether it was a restaurant, a car, or a SaaS Software platform, that recommendation carried weight with you and played a significant role in your purchase decision. Now, consider for a moment, you find out that your "friend," Matt, who recommended you purchase a $45,000 car, was paid $500 after your purchase. Or worse yet, he got some rewards points redeemable for a cheesy vacation getaway, which turns out to be a sleazy timeshare pitch. What are you thinking?

You might feel…

  • Misguided – The intention behind the referral was not pure. “What’s the deal Matt, you pimp out your friends for cold hard cash now?
  • Indifferent – That recommendation wasn’t authentic, the referral was made for personal gain. Maybe not exclusively, but that doesn’t matter. “That means about as much to me as the ads on the back of a bathroom stall door.”
  • Hustled – Especially if you find out after your purchase. You just spent your hard earned cash based on a recommendation you thought was genuine. What remains of your relationship with that person? With that brand? “Did you actually believe this was right for me, or did you just want a reward?”
  • Less loyal – If a few bucks got you in the door, a few bucks will get you out the door. Your switching costs are no longer tied to any brand affinity, just the dollars and cents. “I’ll stick with this until the next deal comes along.

You get it.

On the flipside, an Advocate recommendation is:

  • Trustworthy – In a study by Nielsen, 92% of consumers said they trust a recommendation from a ‘person they know’, and according to Econsultancy 70% still trust recommendations from people they don’t know.
  • Influential –  Research conducted by McKinsey concluded that “a recommendation from a trusted friend conveying a relevant message is up to 50 times more likely to trigger a purchase.” In another study by Zocalo Group, “90% of consumers said that Word of Mouth was the primary influencer in their purchase decision.”
  • Cultivating Loyalty – The Harris Poll reports that “76% of Brand Advocates said they were more likely to repurchase themselves after recommending a brand or product.” And Deloitte found that “customers referred by other customers have a 37% higher retention rate.”

When referred to your brand based on altruistic and authentic recommendations, consumers are more likely to develop a deeper and more long term relationship with your brand and the Advocates that helped them. Growing your business through Advocacy will result in more loyalty, more Word of Mouth, and more profits.

-Alex Littlewood, Senior Customer Success Manager, Zuberance