Advocates and Detractors

With this example, we have taken the concept of Champions, Desperados, Runaways and Loyals one step further. Within their respective spheres of engagement, Champions now become Advocates and Desperados become Detractors.

As Rowling’s novels grew more and more successful, journalists picked up and amplified the story. In newspapers, TV and radio, Advocates passionately debated Detractors. Anything that got a 9-year-old boy with a poor school record interested in reading was a good thing, argued the Advocates. The books were derivative and poorly written in comparison to other works, riposted the Detractors.

In some countries, Detractors vigorously campaigned against the books, which they felt promoted an un-Christian belief in magic and the occult. In a few instances, book burnings were held and public libraries were asked to remove the volumes from their shelves.⁶ Despite this, the books charged on to success after success, powered by the advocacy of children who loved them and parents who loved seeing their children read. The Advocates significantly outnumbered the Detractors and fuelled an extraordinary momentum.

Why ‘vibrant’ engagement?

This chapter will demonstrate the importance of vibrant engagement for any firm’s future success. Whether or not they are customers, Advocates and Detractors pull and push a company’s future in different directions. They have a huge impact on momentum – Detractors slow it down, Advocates speed it up – and both affect a firm’s efficiency and effectiveness at delivering sustainable, profitable growth. The next section will examine the elements of human nature that underlie this phenomenon.

‘Belonging inside’

As mentioned in Chapter 9, Abraham Maslow described a hierarchy of needs that human beings seek to satisfy. Beyond the lower physiological and safety requirements, Maslow identified higher needs such as love, belonging, self-esteem and self-actualization.

It is the higher ones, and especially the need for belonging, that drive vibrant engagement. As with any emotional state, this need to belong is manifested in different levels of intensity. For some consumers, buying a product or service is simply a transaction – a fair exchange of value from which they seek nothing more than satisfaction. For others, it is more than just a purchase – it is a way to connect, to become a member of a club or make a statement. In some extreme cases, it is through their vibrant engagement that consumers express something even greater than belonging – their relationship with a product can become fundamental to their sense of self. What proportion of Ferraris or Rolls-Royces are bought for love of beautifully wrought machinery and what proportion for the sake of self-esteem and self-actualization?

Fortunately, there are cheaper ways to belong and self-actualize. Facebook, the social networking service, is probably one of the best examples of this. Many other such sites exist but Facebook is the one that has generated the greatest levels of engagement. As we saw in Chapter 10, its users keep coming back – most of them every single day. Why? Because unlike many other networking sites, Facebook has belonging built in to it. This is hardly surprising. After all, it started as an enclosed environment where only students at the same campus could join in, thus users already ‘belonged’ before they joined. Facebook, however, has kept that sense of membership as it has grown.

But it is more than belonging to the same school or work group that engages Facebook’s users – after all 45 per cent of users who joined while at college continue to visit the site every day long after they graduate – it is the fact that Facebook shows you that other people care about you that is at the heart of its levels of vibrant engagement. Every day your friends are checking the site to see what you’re up to, and sending you updates on what they’re doing – it proves that you matter, that you belong.

In the same way, top executives and professional managers demonstrate where they belong, whether they’re customers or not, by the decisions they make. Choosing whether to do business with Goldman Sachs or Merrill Lynch, McKinsey or Accenture, Harvard or MIT, Dell or IBM, Microsoft or SAP is obviously based on a professional decision-making process, but it also expresses a statement of belonging to the group of companies that do business with a specific prestigious firm.

‘Broadcasting outside’

Human beings are communicative. We like to communicate all the more as our emotional commitment to something grows – we broadcast our commitment to the outside world. In the process of vibrant engagement, a happy customer can influence decisions by connecting and communicating with others. Where connections were once restricted to local communities, technology means that consumers now connect globally, and at lightning speed. Skype blossomed around the world almost overnight.

The Internet instantly brings together consumers through e-mail, websites, chat rooms and blogs.⁸ Cheap flights, both short hop and long haul, have eased communication vastly. Where only a generation ago, friends and family living a few dozen miles apart would rely on the postal service, saving phone calls for special occasions and visits for births, deaths and marriages, today we can be in video contact every day free of charge, or hop on a plane for a weekend visit at a cost of little more than what an extended long-distance call cost a decade ago. It’s a cliché, but we really do live in a connected world.

Our natural desire for self-expression and communication has combined with technology to exercise a huge impact on business. It is much easier than ever for customers to have a voice. One of the most powerful developments of recent years has been the blog. Bloggers are today’s equivalent of the man on the street with a megaphone. Facebook takes that further. Its initial growth was no doubt driven by the pleasure young students take in broadcasting their wild and crazy behaviour, but older, or more restrained, users still enjoy being able to express their opinions to the world. We live in a world where the reviews of your products that influence many buying decisions are not those of a few trade journalists who you can schmooze at industry events, but those written by thousands of customers prepared to let the world know what they think of your wares on Facebook or similar websites.

Customer engagement is becoming more intense and easier to broadcast. This has two important consequences for business. First, firms that have created power offers and have begun building momentum will find that customer engagement accelerates their efforts. In contrast, this opportunity will turn into a threat for those firms that disappoint their customers. Secondly, the increased intensity of the need to belong and the accessibility of new communication channels mean that customers’ engagement can switch from positive to negative with terrifying speed, shifting their allegiance from one firm to another. The battle is never won for good.

Accelerator I: Boosted compelling value

First, engaged customers like to get involved in businesses they care about. This kind of customer engagement can contribute to improved or new offers as well as lowering delivery costs and contributing to innovation. Their influence and involvement boost the value of a product or service.

Some engaged customers are very demanding and try to change the way an organization does business, either because they have good ideas to make or because they are unhappy about something in the company’s operation.

These demanding customers are normally satisfied and loyal, but they feel so attached to the company that they want it to do better. They are very valuable because they are supporters.¹¹ In many companies, employees try to hide from demanding customers, but truly customer-focused companies do the opposite. They have learned to listen and actually involve their most valuable customers in the development of new products and services. It makes sense. Channelling their needs and desires into innovation allows them to develop exactly what these people want – and what they want is probably what other customers want too.

Eric von Hippel, head of the technical innovation and entrepreneurship group at MIT, calls them ‘lead users’ – customers who have a high incentive to solve a problem and the ability to innovate.¹²

BMW has developed a programme of workshops and seminars to encourage collaboration among lead users, engineers and executives. Since 2001, when the programme was launched, the car manufacturer has identified a number of improvements by listening to demanding customers who expect the highest level of quality and performance from their cars.

Companies smart enough to adopt this approach before their Desperados become Detractors must provide the right channels for involving customers. Both Nestlé and Procter & Gamble are using their telephone complaints line to harvest ideas for innovation. They have discovered that customers often wish to get in touch to communicate advice or share ideas, truly and sincerely. It would be foolish to neglect this potentially valuable input.

Some contributions from engaged customers may seem marginal, but any opportunity to improve a firm’s understanding of customer value is worth seizing. It is part of the process of closing the loop and adding to the feedback effect of momentum. Even what appears to be a marginal contribution to a firm’s growth rate or cost structure can have substantial impact over time.

Accelerator II: Boosted compelling equity

In previous chapters we emphasized the importance of viewing customers as assets. The desire of existing customers to adopt additional offerings from a firm is a crucial test of vibrant satisfaction, vibrant retention and vibrant engagement. It reflects behaviour rather than mere attitude, feeling or thought. It is truly vibrant engagement.

Engaging customers in this way is commonly referred to as cross-selling, but the expression is not appropriate for momentum-powered firms. It suggests firms trying to force products on less than enthusiastic consumers, whereas momentum-powered firms manage something altogether more powerful. Their customers are so engaged with the firm and have such a high level of trust in its products that they quite willingly adopt new offerings. This phenomenon should therefore really be called ‘self-adoption’ instead of ‘cross-selling’. It means that they actively trust the company – no customer attitude can be more precious than that.

But not all existing customers buy a firm’s new offers out of this kind of engagement. It is necessary to distinguish between self-adoption thanks to customer involvement and cross-selling attributable to the push of marketing resources. The difference comes down to the vibrancy of a firm’s engagement.

First Direct offers a fine example of self-adoption through vibrant customer engagement based on trust. It broke every rule in the book by successfully offering mortgages to existing customers. Industry observers had serious doubts that mortgages could ever sell online to premium customers. A mortgage is the largest financial commitment that most people will ever make, and yet First Direct’s customers snapped them up because they trusted the bank. After launching in July 2002, mortgage sales grew by 53 per cent in 2003, and First Direct secured 25 per cent of all the new mortgage lending issued by its much larger parent company. That is serious acceleration. Once again, it is evidence of the feedback that momentum strategy engenders from engagement back to equity, from execution back to design.

The self-adoption that firms achieve through vibrant customer engagement is much more profitable than cross-selling secured through marketing push, because it costs much less to make the sale. This explains why small improvements in engagement produce ever-increasing returns in profitability.

Accelerator III: Boosted customer acquisition

When customers are positively satisfied, they tend to talk to other people about their experiences. But unsatisfied customers also share their experiences and bad-mouth companies that they perceive to have mistreated them.

It is a hackneyed element of every piece of customer service training that customers will talk to more people about a negative experience than a positive one. Numbers vary according to situations, but it is estimated that customers making a positive recommendation will speak to 5 to 10 people, compared to 10 to 15 people for a negative recommendation.

But these numbers reflect the fact that the majority of positive customer experiences are still little more than ‘They did a really good job, and I got what I paid for.’ This is not really news – it’s only what we all have a right to expect. On the other hand, a negative experience is unacceptable for someone who pays for a product or service. Being unexpected, it is news worth broadcasting. So it makes sense that we will tell more people about frustrating and upsetting negative experiences than we will about acceptable ones, no matter how agreeable.

What happens, though, when a customer has a good experience that is truly exceptional? The astounding quality of the experience becomes a story worth telling. The fact that it reflects well on the customer for having tracked down such a great experience gives further incentive to broadcast it. The force of the story comes not only from the number of people to whom customers recount it but also from the intensity with which they speak. It ceases to be ‘They did a really good job, and I got what I paid for’ and becomes ‘It is an amazing product. You have to try some.’

Word of mouth is the powerful expression of one of the key emotional drivers of vibrant engagement – broadcasting outside – and one of its most vital signs. It is valuable for a number of different reasons. Since its launch in 2000, JetBlue, the low-cost US airline, built vibrant levels of engagement with its regular customers – an engagement that, as we saw in a previous chapter, was strong enough to save it from the sort of execution disaster that would sink a lesser firm. It is also an engagement that delivers a bottom-line impact. JetBlue says 60 per cent of its new customers come from word of mouth, compared to just 15 per cent from its advertising campaigns.

Extensive modelling research we have performed on the power of momentum has demonstrated the enormous impact of improved customer value, customer equity and customer acquisition on sustained profitable growth. The combination of these three acceleration effects of engagement brings a customer momentum that can appear unstoppable.

Paid-for value and ambient value

Every offer contains a core bundle of benefits available only to those customers who purchase it. This is the paid-for value. But in addition, there is an ambient value surrounding the product, and this is not restricted to those who buy the product – customers and non-customers receive it alike. For instance, passers-by can enjoy the seductive lines of luxurious cars, the look of fashion clothing, the music wafting out of a store or the smell of a bakery or delicatessen. They also can be annoyed by the pollution of gas guzzlers, the perceived aggressive attitude of sports utility vehicles drivers, the bad smell of cheap perfumes, the blaring sound of stereo systems, the smoke of cigarettes or others’ offensively bad taste in dress sense.

Like paid-for value, ambient value is a mix of perceived costs and benefits, and the net total can be positive or negative. What is special about ambient value is that non-customers enjoy it, or are annoyed by it, even if they haven’t spent a penny on the related product. This can make their emotional reactions and their engagement potential even stronger than is the case for customers.

With a beautiful, expensive car like a Ferrari, the paid-for value is the car itself and its associated costs and benefits. The ambient value is the package of images and associations that surround the car and which non-customers can enjoy – the racy looks, the sound of the engine, the projection of imagining driving it oneself, the shared emotions of the Ferrari team winning Grand Prix races. Supporters love these associations and aspire to own the car. Detractors despise the image and deride everything associated with the brand. Of course, owners also enjoy the ambient value, although their perception of it may well be different from what the Supporters or Detractors see.

Non-customers can be extremely important to a firm, but they are totally free of commitments towards it. Any form of engagement from them, whether positive or negative, is under their own initiative. This means it’s harder to obtain their engagement, but that engagement is more powerful once it has been set in motion.

Consider how many people talk about your products even when they’ve never bought them, as with Ferrari. Imagine the influence of these non-customers on fostering the momentum of your firm, if you manage to engage them.

Mobilize for vibrant engagement

An effective strategy for momentum requires a shared ambition – an objective that should trickle down to all levels of employees. Everyone within a firm should understand the importance of vibrant engagement. This requires training, coaching and the use of appropriate metrics. It may involve workshops investigating how the three different acceleration effects of vibrant engagement apply to specific situations – formulating the firm’s engagement portfolio as well as actions to influence its evolution, designing simulations to investigate the engagement scenarios’ potential impact on growth or initiating a programme to increase the recommendations score.

Beyond understanding, employees must behave in a way that demonstrates their own engagement – customers will not be engaged if employees aren’t. If they are unprepared or unwilling to talk positively about the firm and its products to friends and family and to take initiatives that improve an offering, why would customers? We know of a major insurance company that learned that fewer than half of its employees had purchased their own insurance from their employer! The main reason they gave for offering their trade to a competitor was that their own company was too complex and too expensive to do business with! In contrast, we know of other companies whose employees would not even think of buying a competitor’s product because they are passionately convinced that theirs is the best. Which employees are most likely to create a positive impression with customers?

The example for internal engagement should be set by top executives through their own behaviour. Inspirational leaders such as Richard Branson at Virgin, Steve Jobs at Apple and Lou Gerstner when at IBM understood this perfectly.

Detecting sources of engagement

The second step in an engagement strategy is to systematically search for any source of engagement that could foster momentum and any source of detraction that could slow it down. Once these sources have been detected, it is a regular management task to find ways to exploit or eliminate them.

Let’s return to the Chapter 3 example of Skype. We identified some positive sources of engagement – the desire to appear trendy, to share and to communicate something newsworthy. Providing stimulating new features to feed this desire would promote further engagement. On the negative side, some sources of detraction have already been eliminated successfully, such as poor sound quality and complexity of operations. But others are still active, such as the fact that certain corporations invoke security reasons to bar their employees from using Skype. If this concern were addressed to the satisfaction of the Detractors, it would unleash additional growth momentum.

Some sources of engagement or detraction are related not to the product itself but to the broader offer that includes the values that it represents. An extreme form of this is illustrated by the Italian clothing company Benetton, with its provocative 1990s ‘United Colours of Benetton’ campaign based on the sensational photographs of Oliviero Toscani .

The campaign began with the idea of photographing diverse ethnic groups dressed in colourful Benetton outfits. These pictures’ initial success and emotional impact uncovered the potential for engaging customers and non-customers alike around several social values including race relations, poverty, war, love and compassion.

The award-winning campaign created heated debate, and while applauded in some countries it was banned in others. Benetton systematically tracked the emotionally charged reactions. As many as 75 per cent of viewers hated certain of the ads, but others loved them. Overall the campaign succeeded in engaging customers with Benetton’s values and created customer momentum despite a limited advertising budget.

Converting for vibrant engagement

Once Benetton discovered that its customers engaged positively with the values behind its initial campaign, it extended the concept and provided a platform for communicating about those values. This was especially important to its young customer target group, who felt as if the ads had been done in their name – people who shared these values but lacked the opportunity to be heard. Advertising was a tool for engagement, not to sell the products – not directly, in any case. Toscani famously said: ‘I am not here to sell pullovers but to promote an image.’ But obviously, the high level of engagement, the visibility and the image created did boost Benetton’s growth. By 2000, the campaign had run its course and Benetton decided to stop it when the negative power of detraction appeared to be outweighing the positive effects of advocacy.¹⁴

There is potential for engaging customers throughout their entire relationship with a firm.¹⁵ The general principle is to create tools and platforms that make it easier and more attractive for customers and non-customers to engage with the firm and its products. The purpose is not to boost sales in the short term, but to nurture Advocates and Supporters to give them a channel for expression so that they can actively promote the firm, its products and its values. Their enthusiasm and lack of commercial motives make them much more credible than any communication emanating directly from the firm. Investments made to support this approach will be far more effective than traditional promotional tools.

Events to promote vibrant engagement should be planned with a clear target audience in mind – people who will derive value through their own engagement. One firm that has been notably successful with this approach is Red Bull, the Austrian energy drink. The Red Bull Air Race ties neatly into the brand’s promise that ‘Red Bull gives you wings’. It encourages its Advocates to take part in a wacky air race that sees many of them doing crazy stunts that are particularly effective because they reflect intense fun in activities highly valued by its core customer group. It has become a key component in the brand’s integrated marketing campaign. The resulting engagement of Red Bull customers is largely responsible for its explosive growth around the world.¹⁶

Ferrari has an exclusive club with local chapters and many services offered to its owners, including professional driving lessons on the company’s private racetrack in Monza, Italy. Of course, it also builds a broader engagement of both Advocates and Supporters through Formula One Grand Prix racing. Observers at these events agree that the engagement of the Ferrari Supporters is unmatched by any of its rivals. The enthusiasm is, obviously, related to the performance of the racing cars and their drivers, but Ferrari also follows a systematic strategy of taking great care not only of its customers but of its vast army of Supporters. Every event is an opportunity for the fans to express themselves and share the glory, wearing Ferrari clothing and waving Ferrari flags. The Y&F community (You and Ferrari) is open to all Supporters, and its members have access to several free services and goodies. In addition, the Ferrari store sells all types of accessories, clothes and toy models.

But vibrant engagement doesn’t thrive only in the world of luxury cars. All that is needed is a power offer that has already created some form of involvement. Any firm that enjoys customer traction, vibrant satisfaction and vibrant retention will benefit from positively engaging customers and non-customers further. This is true in all areas from consumer goods to heavy industrial equipment – and it includes some unexpected fields. One of the most amazing examples in this respect is Shouldice Hospital in Ontario, Canada. Also known as the Shouldice Hernia Centre, it has specialized in hernia surgery for 50 years. Its patients are so engaged that they organize an annual alumni meeting. This would not happen, of course, if the quality of the service was not exceptional, but it is also fostered by the hospital’s positive attitude in organizing the events, as well as travelling clinics, a newsletter and picture sharing.

Promotion of vibrant engagement is based on creating platforms to help Advocates and Supporters express themselves. Creativity is the only limit to their development. They commonly include events, clubs, user groups, communities, sponsoring, charities, research programmes, publications, websites, blogs and even use of virtual worlds such as Second Life¹⁷ or Whyville, as Toyota did to promote the Scion. A fundamental determinant of their effectiveness is whether they have been set up to reinforce an existing engagement or to compensate for the lack of one. If they are just an attempt to buy commitment then they are no longer tools for vibrant engagement. In these cases they are no more effective than regular advertising or promotion, because they are not based on customer traction.

But converting for engagement is about more than just doing things right – it’s also about fixing things when they go wrong. JetBlue’s actions to put things right after its problems is a case in point, as is Steve Job’s reaction to criticism about a price cut early in the life of the iPhone. Within two months of release Apple cut the price by $200 – a move that was met by howls of protest from Apple fans who had, in some cases, queued overnight to buy the new phone on its launch.

Now, one could argue that early adopters always pay a premium and that prices in technology always seem to come down just after you’ve brought a product, but Apple realized that more was at stake here. Steve Jobs took the extraordinary step of publishing an open letter to all iPhone customers. In it he defended the decision and pointed out that technology prices always come down, but concluded by saying, ‘Even though we are making the right decision to lower the price of iPhone, and even though the technology road is bumpy, we need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price. Our early customers trusted us, and we must live up to that trust with our actions in moments like these.’ Apple offered everyone who had purchased a phone at full price from them a $100 credit for use in an Apple store. He concluded by saying, ‘We apologize for disappointing some of you, and we are doing our best to live up to your high expectations of Apple.’¹⁸ That is the action of a firm that understands the importance of vibrant engagement.