Brand advocacy - a quantitative methodology for measuring strength, health, loyalty, competitiveness

So you have carefully positioned your brand to the upmarket. You have consistently implemented this brand at every consumer touch point, and have engaged this audience emotionally. But can you, as the principal brand evangelist, defend your positioning and prove that it drives the long-term success of the brand in the marketplace? Absolutely.

We all know that word of mouth is the best marketing tactic you can have on your side. When a brand is recommended by a trusted friend, family member or adviser (a.k.a. third party brand advocate), the consumer is much more likely to believe the recommendation and purchase that brand. Moreover, the consumer who recommended the brand is also likely to be a loyal customer, with a high lifetime value driven by frequent repurchases.

While often included as a part of image, perception and awareness studies, or in brand equity research, we now recognize advocacy as the single most important indicator of a brand’s potential for growth. Measuring advocacy reveals the depth of the consumer's relationship with the brand, and the relevance of the brand message to the consumer. The consumer’s willingness to act as an advocate gives them a very personal stake in the brand. It’s their integrity and reputation that’s on the line, and what’s more valuable than that?  

In our work with The Gallup Organization in the early 1990’s, Smith & Jones first learned the correlation between measured advocacy, short-term revenue and long-term profitability. We found that the satisfaction drivers that exist at the top of the consumer’s hierarchy of needs are also those that inspire brand advocacy. It’s often surprising for our clients to learn that some of the product or service features they believed to be the most differentiating, or most desirable for consumers, end up at the bottom of the consumer's hierarchy of needs. Instead of being drivers of advocacy, these attributes are found to be “costs of doing business.”  

This led us to develop the Smith & Jones Advocacy Index™, which we use today to measure a brand’s current and potential upmarket position. When a brand’s position on the Advocacy Index is low, we find the brand is experiencing higher operating costs, smaller margins and a more commodity-like status than its upmarket competitors. When a brand’s position on the Advocacy Index is high, it enjoys higher revenue, higher margins and a higher status than its down-market competitors.

We are not alone in this way of thinking. In the early 2000’s, Frederick Reichheld, founder of the Loyalty practice at Bain & Company, conducted an independent study to better understand the relationship between consumer loyalty, short-term purchase and referral behaviors, and long-term corporate financial performance. The result of this study was the concept of the “net promoter score” and the subject of “The One Number You Need To Grow,” an article that appeared in the December 2003 issue of Harvard Business Review.

In addition to confirming the validity of using advocacy as a brand performance measure, Reichheld proved a consumer’s “likelihood to recommend” to be the top correlate to actual consumer behavior 80% of the time — across all product categories. Further, if a consumer is inclined to recommend the brand via word of mouth, he is also likely to repurchase.

Most companies that understand the relationship between advocacy and financial performance are experiencing the highest margins in their categories. They tend to have an extremely focused brand positioning, one that everyone at the company understands, embraces and delivers at every single consumer touch point. It is that all-important emotional upmarket brand positioning and carefully integrated communications program that earns the priceless “word of mouth” marketing from a brand advocate.