Brand advocacy and profitability

From: Using Advocacy to Measure Brand Strength

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.