Over my last few posts, I’ve been looking at customer lifetime value (CLV) for field service management businesses and considering the four key drivers that influence CLV. Today I want to look at driver #2 in more depth – customer advocacy and referrals.
Rick Wion, Senior Director of Consumer Engagement at Kellogg’s once said: “Advocacy can propel a brand unlike any other paid or unpaid media because it unlocks the networking power of one-to-one relationships with a key of trust”. And he absolutely hit the nail on the head – customer advocacy and referrals are vitally important for driving customer consideration and increasing CLV.
However, this important tool for field service management businesses is often seriously overlooked. To address this, I’m going to take you through the basics of what customer advocacy and referral programmes actually are, why you need to care about them, and the four key steps you need to follow to create great customer advocacy and referral programmes for your business.
So, what exactly do we mean by customer advocacy and referrals?
Customer advocacy is exactly as it sounds – turning happy customers into advocates for your brand’s products and services through?word-of-mouth marketing. As people who’ve experienced your great product or customer service, these customers will have a significant influence over your audience. And effective customer advocacy means enabling them to share positive experiences about your brand with the wider public.
Customer referrals, on the other hand, are more pointed, specific recommendations passed on by happy customers to their family, friends and acquaintances.
It’s easy to see that both referrals and advocacy both come back to trust. People place trust in the views of peers more than in marketing from a company – this is why review companies like TrustPilot, Feefo and TripAdvisor are now so ubiquitous. And of course, there is also trust between you and your customer advocates.
How do customer advocacy and referrals improve CLV?
As very simply put by Dharmesh Shah, co-founder and CTO of?HubSpot: “The more advocates you have, the fewer ads you have to buy.”
Customers who are happy with your products and services will recommend them within their close circles and larger network. And people trust word-of-mouth product appraisals from those they know.
A purchase recommendation from a friend is 50x more likely to trigger an actual purchase. All this without the sale or service teams launching specific campaigns for customer acquisition. Getting new referrals from your existing customer base is the most efficient method of lead generation and customer acquisition, as it cuts out long marketing and sales campaigns.
Highly satisfied and delighted customers are also your best brand advocates, and they can go beyond their close circles to appraise your products and services. They have the influence to form and direct public opinion through word-of-mouth and social channels, even without any incentive to do so. Advocate recommendations double the likelihood someone will buy your product or service, compared with generic brand marketing.
So, an existing customer can be far greater than his or her individual purchase value and can help improve average CLV by expanding and increasing your customer base and sales value. Field service management businesses need to make the most of this potential during all their service visits and contact centre interactions. By enhancing customer experience and building trust in every service interaction, you can build a group of customer advocates who will drive your passive sales and increase CLV.
4 steps to build a strategic customer advocacy and referral programme
Step 1: Make customers happy by going above and beyond the call of duty
Hopefully, this is pretty obvious – happy customers will mean more positive referrals, after all. Service teams interact with customers 15% more often than sales teams. So, as a field service management business, you’ll have many opportunities to deliver exceptional customer experience during your contact centre conversations and field visits.
The first step in delivering great customer experience is, of course, to make sure customer interactions are top notch. During customer interactions, you need to enable contact centre agents and field service technicians to guide customers through the proper use of your products. And if field service technicians have relevant product literature and working demos at hand during the customer visits, they can actually guide and train customers onsite.
But great customer experience doesn’t stop there. In addition, your business can start collecting and analysing IoT data from your products, such as usage trends, asset performance and behaviour. Having this information to hand will help you provide proactive remedial services to customers to avoid any issues.
IoT data such as usage patterns can also help your contact centre agents and field service technicians to proactively support customers. For example, by helping them to explore and use more of the product’s features to get maximum benefit and return on investment.
Finally, you need to make it easy for customers to reach out to you at any time of the day convenient to them, on any of their preferred channels (from Whatsapp or social media to self-service on your website, for example). This is now a non-negotiable expectation. However, it’s important to remember that across all these different channels you need to deliver a consistent brand experience – this is the real difference between multi-channel vs. omnichannel experiences (more on this to come in a follow-on blog).
Step 2: Identify and motivate brand advocates
Having a 360-degree view of your customers, including information on their emotional state, brand sentiments, influence and network indicators will help your contact centre agents and field service technicians to spot happy customers and identify advocates.
During in-person interactions, you need to empower your teams to align their conversations to acknowledge a customer’s goodwill and further nurture the advocacy and referral potential of appropriate candidates.
With the right technology in place, your teams can also be notified of the right time in the customer lifecycle to gather feedback, ratings and survey inputs. This doesn’t mean you should avoid negative feedback, but all feedback must be solicited at a time when the customer is most open to providing it.
Recognising and mentioning happy customers and their testimonials (with their permission of course) in your product promotions is also a great way to thank them, as well as being brilliant marketing for you.
Step 3: Make it easy and rewarding for customers to share experiences
Providing customers with different methods and channels to share their experiences and advocate for your brand is a vital part of any advocacy programme. Advocacy is most successful when happy customers have a formal method and associated community where they can share experiences, provide feedback, testify to your great services and make new referrals or tag prospects.
It’s also key to engage with happy customers on public social channels like Facebook and Twitter, using them to reinforce their positive relationship with your brand and to amplify positive sentiments.
When people do advocate for your brand, appreciation is also super important. Appreciate advocates on their efforts and goodwill, and thank them for sending business your way. You can motivate them to do even more by incentivising and rewarding referrals and new customer acquisition.
Finally, while it’s tempting to try to ignore negative feedback, it’s essential that you take time to acknowledge, clarify and take suitable corrective action when a customer is unhappy. Being transparent and receptive in the face of negative feedback increases trust and can often help to turn around a negative situation into a positive one.
Step 4: Invest in analytics to continuously improve
This is arguably the most important step in any customer advocacy and referral scheme. In order to run steps 1-3 smoothly, you will need to gather and analyse a huge amount of customer data, service data from multiple channels, and asset data from IoT streams. All of which needs to be processed at near-real-time speeds on a continuous basis
You will need appropriate analytics models to come up with a true 360-degree view of customers and segment them into various degrees of advocacy potential.
In addition, having analytics driven by self-learning and/or machine learning – based on feedback and responses from your advocates and wider target audience – will help in adjusting your interactions with customers on the go.
In short, creating a powerful customer advocacy and referral programme is about empowering your contact centre and field service teams with the right capabilities and tools to deliver outstanding service and identify advocates. And then enabling and rewarding those advocates through the right channels to promote your brand and services.
Putting all this together will increase your customer base and sales value many times, and so will also deliver you an increase in overall CLV.
I will be discussing “Repeat Purchase and Renewals” as the third CLV driver for FSM businesses in my next blog. Stay tuned.