2. Business-to-Business Advocacy Measurement: It’s About
Performance, Trust and Relationships
Apart from procurement and pricing requirements sometimes
encountered in business-to-business supplier selection and loyalty
behavior situations, there are several factors that contribute directly to
perceptions and marketplace actions. These include:
• Overall supplier brand impression/reputation – largely
attitudinal, with some influence on purchase decisions;
• Level of expressed commitment to supplier – largely attitudinal;
• Overall performance satisfaction – impacts purchase intention;
• Perceived service quality – impacts both attitudes and purchase
intentions.
Service quality is a critical measure of organizational performance
and is a key condition of relationship quality. In turn, relationship
quality links and contributes to the perception of satisfaction and trust,
creating business outcomes of customer retention and advocacy. This
is similar to the role of service in B2C product and service supplier
selection.
Interestingly, although trust in employees is often a major contributor
to B2C customer behavior, in B2B studies, employee trust is assumed
and has been found to be less of a factor.
As reported in a B2B analysis publication from Allegiance, a major
consulting organization: “Focusing only on the end customer in a B2B
environment yields only part of your company’s story. After all, your business
partners represent your company and products to their customers.Therefore, you
need to make sure your business customers are properly advocating your brand.”
Even though B2B customer relationships are often higher-touch than
in B2C customer markets, companies that depend only on anecdotal,
qualitative information leave much insight uncovered. There must be a
proactive, formal and actionable advocacy-based research program to
help stay ahead of the customer need curve.
Word-of-mouth, just as important in driving advocacy behavior,
is critical in the business-to-business world. Word-of-mouth gets
business decision-makers to buy. According to the study, “Driving Word
of Mouth Advocacy Among Business Executives: The Experiential
Marketing Connection," conducted in 2007 by Keller Fay Group
and Jack Morton Worldwide, 53% of the 288 U.S. business decision-
makers surveyed said that word-of-mouth from colleagues and friends
would both get them to buy and contribute strongly to passing along
positive comments themselves. This compares to 39% for sales
representatives, 38% for meetings, events, and conferences, 37% for
Internet, and 37% for trade shows and exhibits. Direct mail, print, TV,
and radio advertising were cited by between 22% and 32% as having
influence on work-related purchases.
3. How does that word get spread? In more than 17,000 conversations
by business decision-makers from June 2006 through January, 2007, as
monitored by Keller Fay, 75% were conducted face-to-face compared
to 19% by phone, the next most frequent communication medium.
This proportion is much higher than by B2C consumers, who are more
likely to communicate via the Internet.
Other surveys have confirmed word-of-mouth’s leverage in
B2B marketing. Nearly half of the business respondents in a
MarketingSherpa and CNET study said that peer-to-peer informal
communication had the highest impact on buying decisions for
technology and services. Word-of-mouth will only be positive if
companies have been identified as creating strong brand impression and
consistently outstanding, value-based customer experiences.
Capsule B2B Case Study: Computer and Peripherals Service
Experience-Based Advocacy Behavior
Senior executives of our client, a major producer of computer and
peripheral equipment, issued a mandate for their customer service
operation: be world-class, performing at such a consistently high and
value-producing level that the service experience would positively
drive downstream business outcomes. Customer advocacy research was
conducted in 20 countries worldwide to identify likely behavior based
on service experiences, irrespective of support channel.
Advocacy research results showed that demonstrating knowledge,
speed of responsiveness, and courtesy were insufficient to strategically
and positively differentiate service. There was a need to proactively
“take ownership” of the customer’s service issue, to personalize
it beyond the merely reactive and institutional response usually
experienced by customers, thus creating a stronger bond and
relationship. Knowledge, responsiveness, and courtesy were the
expected “table stakes” elements of performance. This critical and
highly leveraging finding was identified in all service channels, products
and countries studied.
Note: In previous customer service satisfaction research studies
conducted by this client, “taking ownership” was only one of an array
of attributes where level of satisfaction was measured. Here, this
single service factor was key to driving higher levels of downstream
monetizing behavior resulting directly from the service experience.
4. Our client took several initiatives as a result of this research:
• Major overhaul of service processes, built around greater service
proactivity;
• Training/retraining of staff to go beyond the reactive basics of
performance;
• Staff incentive program based on “taking ownership” scores and
overall research results.
When follow-up advocacy research was conducted with this service
population, there was a significant increase in the proportion of
customers likely to purchase from our client specifically as a result of
the service they had experienced.
Actual B2B Advocacy Research Results
We selected two business-to-business customer advocacy studies to
share from those we have conducted. Our studies for Singapore SME
Business Banking and United States Business Services represent the
spectrum, types of results and actionable insights provided for clients
through our SHARE+ customer advocacy research framework.
Singapore SME Business Banking
Singapore is one of the most progressive financial and banking hubs in
Southeast Asia. A recent study was conducted to determine some of
the key drivers underlying customer advocacy levels towards banks, in
particular among SME customers.
A web-based survey methodology was used and invitations were
sent to business executives who have sole or shared responsibility in
selecting banks and financial services companies for their organizations.
Companies surveyed had yearly revenues of less than 100 million
Singapore dollars. Three weeks of data collection yielded 175 survey
responses.
5. In applying Market Probe’s SHARE+ customer advocacy research
framework to the SME responses, only 12% of SME respondents
were identified as Advocates of their primary bank for all business
transactions. The largest group of customers, 38%, was Allegiants.
Allegiants are an “aspirational” segment: building them to the Advocacy
level will increase their monetizing power for the primary bank. Close
to a third (30%) of the respondents were in the Alienated category (see
Figure 1 below).
Figure 1
Although the consumption of banking products is generally not
considered to be as emotional or relationship-based as that of consumer
services and high-ticket products, our findings revealed that the
emotional element of trust is instrumental in driving up the level of
customer advocacy behavior. Advocate and Allegiant customers tended
to exhibit significantly stronger levels of trust, expressed in multiple
ways, toward their primary banks compared to Ambivalent and
Alienated customers.
Results of our study showed that customer trust is cultivated through
positive interactions with the banks. Two customer touch-points that
are key in establishing the trust of Advocates are the account managers
and customer interactions with general staff of the bank. More
specifically, our research revealed that customers with high advocacy
scores are generally those who are more satisfied with interactions
with their account managers in terms of accessibility, promptness in
response, empowerment to solve problems, and offering good financial
advice.
6. In addition, it was found that these trust-building experiences with
account managers have to be complemented by the overall interaction
with other bank employees whom the customers encounter.
Performance elements including friendliness, perceived competence and
the ability to render prompt and efficient service support the positive
interaction. Results showed that it is critical for banks to present a
positive, customer-centric culture that encapsulates their entire service
offering through training and recruitment of the right people.
Table 1
We also learned through the research that banking and financial products
tended to be perceived as having better quality and more favorable
pricing by the primary bank’s customers identified as Advocates.
7. United States Business Services
Market Probe has been providing research services to a leading national
staffing provider for more than a decade. In our ongoing efforts to
bring actionable CRM findings to our client, Market Probe developed
research programs for the staffing provider that are strategic in nature
and ever-evolving. Our SHARE+ advocacy research protocol offered
our client a means to understand the relationship between customer
attitudes and behaviors, and business outcomes. Web-based survey
invitations were sent to the company’s clients who had placed a
temporary staffing order within the past month. Close to 700 survey
responses were received.
Market Probe’s study revealed that an overwhelming 75% of the
staffing agency’s customers are communicating to others about the
agency through offline and online channels. As a result, we are able
to use our advocacy framework to help classify customers into the
following segments: Advocate, Allegiant, Ambivalent and Alienated.
Because the results produced very few respondents in the individual
Ambivalent and Alienated categories, we combined the two categories
for our analyses, and they took on less overall importance.
Figure 2
Forty-one percent of our client’s customers in the study emerged as
Advocates, with almost the same percentage falling into the category of
Allegiant. Our combined category of Ambivalent/Alienated resulted in
a low 16% of our client’s customers, a reflection of how positively our
client is perceived.
8. Figure 3 illustrates a central concept of Market Probe’s SHARE+
framework: linking advocacy behaviors to business outcomes. For
our client, we identified three key customer behaviors that need to
be explored to increase revenue: Retention, Growth, and Use of
Competition. These findings are quite compelling. As the index of all
respondents is 100, we can see that Advocates are 111% of the average
of all customers in terms of continuing to do business with the staffing
provider. Conversely, 89% of Alienated and Ambivalent intend to
continue the relationship; that means a potential of 11% churn within
this combined group. Share-of-wallet – the percent of expenditure
allocated to the staffing provider – shows a similar pattern. Advocates
emerge at 115%, or 15% higher than other customer groups.
Allegiants score at 107% and Alienated/Ambivalents drop to 70%, or
30% lower share-of-wallet than the other two groups.
Figure 3*
Conversely, when looking at the use of other staffing agencies by the
company’s customers, it was clear that even some negativism could
result in potential business loss. Alienated/Ambivalent clients have
the greatest competitive agency use percentage of 192, i.e., they
were almost twice as likely to be using a competitive agency, whereas
Advocates emerge significantly lower at 54%, or half the amount
of competitive agency use as other clients. These are significant
monetizing behaviors that need to be understood in order to drive
revenue growth.
*Numbers have been changed to protect client confidentiality
9. The next step in analysis and guidance to our client was to identify
which tactics can be used to move the staffing agency’s customers up the
Advocacy Ladder. Applying our “swing voter” multivariate technique,
we learned that the agency’s ability to anticipate future needs truly
distinguishes the Advocates from the Alienated and Ambivalent group.
This element of performance is more than twice as high in terms of
leverage as the next most important element, the client’s perception
of trust (see Figure 4, below). It is essential to building advocacy for
our client. This is underscored in the following testimonial, the staffing
provider “… made an effort to ensure that our business needs were being met
by matching us with the MOST qualified person that could meet not only our
temporary, but our anticipated permanent needs.”
Figure 4*
It was particularly noteworthy that, although our client had measured
“anticipates future needs” for some time, until advocacy analysis was
conducted, its critical importance as a positive and distinct decision-
making driver had never been identified.
Performance has the potential to undermine advocacy behavior.
Maintaining a reputation as an expert in the industry and anticipating
future needs are important values that must be performed well. We see
these as the most critical steps to reduce the number of Alienated and
Ambivalent clients.
*Numbers have been changed to protect client confidentiality
10. In order for our client to protect and build advocacy levels, the staffing
provider must continue to find innovative ways to meet the staffing
needs of its customers. This element of service performance was found
to have almost four times the impact on driving customer advocacy
behavior (see Figure 5, below) when compared to follow-up regarding
staff performance. Again, though our client had measured innovation
for several years, its unique importance in driving advocacy had never
been singled out.
Figure 5*
In terms of service performance, the staffing provider’s ability to
provide quality employees is most critical to reducing the Alienated/
Ambivalent group. Insufficient efforts to follow up regarding the
performance of the employee can also undermine client advocacy, and
so should receive some due-diligence attention.
Concluding Thoughts on B2B Customer Advocacy
Customer advocacy is very much alive and well in business-to-business
products and services. Multiple studies demonstrate that word-of-
mouth and brand reputation are essential decision-making levers. If
anything, due to the more critical nature of touch points, performance,
brand perception, and relationships in B2B, advocacy may well be more
important in this arena than in the business-to-consumer world.
*Numbers have been changed to protect client confidentiality
