Customer Advocacy - An Untapped Asset

Read time: 4 mins

While there are plenty of positive economic signs, substantial headwinds remain. The sustained falls in customers’ buying power will take time to recover from, and businesses are cautious about spending. In short, the economy is still very tough.

Added to our current travails are the long-term trends of diminishing returns from traditional marketing channels and declining customer retention rates. 

Throughout this painful period, CFOs have focused on the problem of profitable growth. 

How can you sustainably expand your revenue at a time when customers continue to keep a close eye on the purse strings?

The answer lies in paying more attention to your existing customers.

Let your customers do the talking

Customer advocacy is when customers help promote your business by referring their friends or through word-of-mouth promotion and online engagement.

Mention Me has launched the Customer Advocacy Intelligence Platform as a way to help businesses develop a systematic approach to this overlooked area of organic marketing. 

If you get customer advocacy right, not only will your customers help spread the word about your brand, they’ll also be happier, more loyal, and more likely to keep on spending with you for longer. 

It’s a reliable way to acquire and retain high-spending customers. And because they love your brand, their enthusiasm helps your marketing efforts.

Why this matters for CFOs

If a customer refers someone to your brand, it means they are satisfied with your product or service enough to recommend it to their friends. 

The happier they are with their experience, the more people they’re likely to refer. 

Improvements in lifetime value

The customers they bring in through referrals are where the real value for your business lies. Referred customers:

• Have double the LTV of other customers
• Spend an average of 11% more per order
• Have a 1.8x higher repeat purchase rate

Reductions in acquisition costs

The cost of acquiring customers through advocacy marketing is typically 40% lower than paid channels.

There are two ways you can use advocacy marketing to reduce your acquisition costs: 

• Acquire customers through referrals
• Use customer advocacy data to build lookalike audiences in Meta and Google

Brands like Spoke and Seraphine have decreased their CPA by between 15% and 50%, with their LTV:CAC ratio now looking much healthier!

What a systematic approach brings to the table

When you can identify customer advocates, the path to acquiring high-value customers at low cost opens up.

How, when and why customers make referrals has traditionally been regarded as a mystery. With the Customer Advocacy Intelligence Platform, we want to change that. 

We’ve incorporated some key functionality into the platform that allows CFOs to appreciate the value of customer advocacy just as much as marketing teams. 

Referral networks

The Network Insights feature pulls back the curtain on how referrals work. 

This visual tool shows you who’s making the most referrals, where these referrals are clustered, and how and why referral networks develop.

These insights mean you have a greater understanding of who’s bringing the most value to your business. Observing factors that led to the growth of one network means you can repeat the process with other customers. 

Predictions that help develop advocacy

As a leading referral platform, the wealth of data and insights Mention Me has built up allows us to make accurate predictions about which customers will spend the most, make the most referrals, and represent the most value to your business over a 12-month period. 

These insights are valuable as they allow you to include advocacy data when creating customer segments. 

The value your customers bring is not set in stone and you can increase it with a careful calibration of your customer interactions. 

Whether a customer has never referred before but thinks highly of your brand, or whether they have referred 10 friends but are in danger of churning, allocating them to the right customer segment means you can provide CX that fits their needs. 

For one leading brand, using advocacy data in this way increased engagement rates by 80% and led to a 36% boost in referrals. 

Earned Growth

This is a concept designed to measure the organic growth of your business by calculating revenue attributed to retention or advocacy.

Earned Growth is the amount your business would grow by if you stripped out all the effects of advertising and marketing spend. It captures the goodwill and enthusiasm customers have towards your brand — all the word-of-mouth promotion, positive reviews and social engagement — and calculates the net effect of customers promoting your business. 

The more you lean toward earned rather than paid-for growth, the healthier the underlying economics of your business become. 

Mention Me’s platform lets you track Earned Growth and the effect your advocacy strategy has on it. 

The best way to grow your business is advocacy-first

Over time, it’s possible to use customer advocacy to transform your business. What starts as a simple referral programme can blossom into a customer-centric organic growth strategy. 

Customer advocacy lets you reduce customer acquisition costs and more efficiently spend your marketing budget.

You’ll see top-line growth with the acquisition of high LTV customers, rebalance away from paid channels, and be able to make sustainable margin improvements.

The high-quality customers you attract will put your business on a more stable financial footing, provide an immediate and sustainable boost to revenue, and drive profitability now and into the future.

For more on how customer advocacy can be of huge importance to CFOs, take a look at our downloadable guide.