The Emerging Era of Customer Advocacy

For decades, companies relied on push marketing to sell their products and services. Then in the 1990s, the emphasis shifted to relationship marketing, as “customer care” and slogans like “delight your customers” became the mantra of many marketers. But those tactics have been losing their effectiveness, particularly as the power of customers to make product selections that are best for their needs continues to grow. Thanks to digital technologies like the Internet, today’s increasingly educated consumers expect companies to do more than just delight them.

In response, innovative companies are now trying a different approach: They are providing customers with open, honest and complete information — and then finding the best products for them, even if those offerings are from competitors. In short, they are truly representing their customers’ best interests, essentially becoming advocates for them. The strategy is this: If a company advocates for its customers, they will reciprocate with their trust, loyalty and purchases — either now or in the future. The firm might then command higher prices for its products and services, as many customers will be willing to pay for the extra value. And when people trust a company, they will often tell others about it, helping to reduce the organization’s costs for acquiring new customers.

Advocacy strategies have been emerging in a range of industries, including the financial, automotive, industrial and high-tech sectors (see “About the Research”). General Motors Corp., for instance, has cosponsored a Web site that helps consumers select the vehicles best suited to their needs. The tool asks prospective buyers a number of questions (for example, how much they can afford and what features they would like) and then comes up with a list of eight suggestions, including vehicles from manufacturers other than GM. Even the telecommunications industry, long notorious for its aggressive marketing tactics, may be moving toward the use of customer advocacy tactics. Qwest Communications International Inc., for instance, is currently developing a virtual advisor to help people select the service package that suits them best from among a number of different plans, including those from competitors.

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References

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10. Ibid.

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12. N. Wingfield and K. Lundegaard, “Clicking the Tires: eBay is Emerging as an Unlikely Giant in Used Car Sales — Web Auctioneer Wins Drivers Seeking Deals on Wheels, and Plans for Long Haul — In the Beginning, Toy Ferraris,” Wall Street Journal, Friday, Feb. 7, 2003, A1.

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15. Author’s interview with Ross Blair, CEO, Experion Systems Inc., Maynard, Massachusetts, October 10, 2002.

16. G.L. Urban, “Digital Marketing Strategy: Text and Cases” (Upper Saddle River, New Jersey: Prentice Hall, 2003): 161–162.

Acknowledgments

Research was funded by the Center for eBusiness at MIT, General Motors Corp., Intel Corp. and Qwest Communications International Inc. The author is grateful to Vince Barabba, Ross Blair, Iakov Bart, Mary Murphy-Hoye, Jeff Katz, Melanie Kittrell, Andrea and Dana Meyer, Stefania Nappi, Brian Rhodes, Venkatesh Shankar, Ron Shelvin and Fareena Sultan. And the author acknowledges his MIT research assistants David Gagnon, Mahesh Kumar, Susan Lee, Lauren McCann, Rami Musa, Fernando Ramirez, Siva Ravikumar, Jessica Santiago and Telmo Valido.