Turning Customer Advocacy on Its Head
The dominate notion of customer advocacy is not very customer centric. Its focus is on what the customer can do for the bank by referring friends, relatives, and colleagues for their banking needs. A more customer centric notion, with perhaps a stronger relationship to customer loyalty, turns this dominate notion on its head – making the bank an advocate on behalf of the customer. Customers who trust their bank to do the right thing are more likely to remain loyal.
Measuring customer advocacy is both simple and useful; just ask your customers if they agree with the following statement: “My bank cares about me, not just the bottom line.” I call this the customer advocacy statement. Research has demonstrated a positive relationship between agreement with this statement and loyalty to a financial institution. This makes intuitive sense; customers who agree trust the bank to do right by them and will remain loyal.
Here is how we ask the question. As part of a broader survey, we ask our clients’ customers to rate, on an agreement scale, to what extent they agree with the above statement.
Research without clear call to action elements may be interesting, but not very useful. How can a manager put this question to use?
The answer to this is two fold:
First, the response to this question can be correlated to a battery of service attributes. This will yield a means of judging the relative importance of each attribute in terms of the strength of their relationship to loyalty. Mangers now have a basis to make informed decisions as to which investments will yield the most ROI in terms of improving customer loyalty.
Second, investigate all cases where agreement to this question is low. These are customers at risk. A researcher can drill into the survey responses of these customers to determine what caused the low rating. Tracking the causes will inform management of potential causes of runoff that require attention.