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.
About the Research
The research underlying this paper began in 1997 with an MIT project funded by General Motors Corp., the goal of which was building a virtual trusted-advisor site called “Truck Town” to help customers select the best pickup truck.