Presentation by sameer murdeshwar

Project Management National Conference, India 2014 1

Paper Title: Building a Sustainable Customer Loyalty Program to Drive Business Growth

Theme: Mantra for Innovative Project Management

Authors:Sowmya Moni, Roopa Pereira, andSameer Murdeshwar


Mantra for Innovative Project ManagementSameer MurdeshwarMarketing CommunicationsUnisys

ContentsAbstract......................................................................................................................................................3

1. Introduction - Customers as advocates for your organization....................................................4

2. Building a sustainable Closed Loop Advocacy Process..............................................................4

2.1 Introduction.....................................................................................................................................4

2.2: Transform employee driven client references to customer driven advocacy and engagement...........................................................................................................................................5

2.3: The plan: Creating the advocacy advantage............................................................................6

2.4 Sustaining the model.....................................................................................................................7

2.5 Execution model.............................................................................................................................7

3. Managing the Program...................................................................................................................10

4. Measuring Customer Advocacy....................................................................................................11

4.1 Customer Advocacy and Net Promoter score (NPS®) – Sticky Wicket................................12

5. Conclusion.......................................................................................................................................13

6. References.......................................................................................................................................13

7. About the Authors...........................................................................................................................13


Abstract

Buyers have always turned to their peers before making any purchasing decision. For a large IT organization, it is imperative to have a strong advocate base to actively promote products and services. The easiest way to find advocates is to start with the most satisfied customers. However, organizing this group and converting them into advocates can be challenging. Building customer advocacy must be a strategic initiative within an organization.

Your organization can build a sustainable Closed Loop Advocacy Process by starting with identifying requirements, forming a program team, and creating a Responsibility Assignment matrix (RACI). Establishing the process objective comes next, which focuses on delivering a tailored program to drive new customer acquisitions. Using inputs from customer insights and feedback, you can then shortlist the strongest advocates before formulating anAdvocacy Messaging Framework to emphasize your strengths and customer benefits. The next step in the process is to create an Integrated Outreach Program which includes speaking opportunities at events using an Advocacy Toolkit with standardized templates such as customer engagement summaries, video testimonials, cases studies, and brochures. The final step involves creating and maintaining an Advocacy Efficacy Tracker to monitor and measure process efficiency and effectiveness against KPIs through standardized dashboards.

Our paper will demonstrate best practices of building a robust customer advocacy program, which when effectively implemented, can significantly increase customer loyalty while giving your organization the competitive advantage. The authors will share their experience of setting up and managing customer advocacy programs in the paper.

Keywords - Customer loyalty, Customer satisfaction, Customer advocacy, Success, Engagement, Case Study, Closed Loop Advocacy Process, Responsibility Assignment Matrix (RACI), Advocacy Messaging Framework, Advocacy Toolkit, Advocacy Efficacy Tracker


1. Introduction - Customers as advocates for your organization

Over the years, an organization would have already decided the kind of relationship it wants to keep with their customers. In most cases, customer relationships are shaped as part of an organization’s missionand values, and are cemented over a series of projects with their first customers. This comes from the way delivery and operations help customers achieve their goals, the amount of time and money spent on customer engagement skills, and the mode of collecting and acting upon feedback from customers. We believe that enhancing customer relationshipsto turn valued customers into loyal customer advocates is a strong business driver.

How can an organization ensure that their initial efforts at building a customer-centric strategy can help turn their small base of valued customers into a large base of loyal and profitable customer advocates? To achieve clear and sustainable competitive differentiation, enterprises can start by aligning their services and relationships with their customers’ go-to-market strategies and goals at multiple points of their engagements. This also means that rising customer expectations must be met. Today’s customer experiences go beyond tangible metrics such as cost reduction and increased efficiency. Exceeding customer expectations involve understanding the softer or more emotive aspects of a customer’s needs and delivering on these expectations. As most large organizations operate globally with hundreds and sometimes, thousands of clients, building these impactful customer experiences can be challenging, especially in times when organizations need to prioritize their spending and investments.

The first step in achieving a strong customer loyalty base is to initiate a continuous and recurring customer satisfaction program where an internal team or an external agency reached out to customers on a regular basis, typically once a quarter, to gauge their service provider experience. This provides a quick and simple view of customer support, reference-ability, and potential customer loyalty for future customer advocates. This paper will detail the steps on how to leverage this customer base to set up and manage a strong and sustainable customer loyalty program.

2. Building a sustainable Closed Loop Advocacy Process

2.1 IntroductionThe traditional ‘push’ marketing has lost much of its influence in the shaping customer behavior. Today’sB2B customer ischaracterized by:

A declining trust in large institutions Heavy reliance on social media Large network of peers and colleagues

And as a report from Forrester research, titled “Tip the Balance from Reference Customers to Advocates” tells us - Marketers must face a new reality: Empowered customers are educating themselves through professional and peer-created content that is available online. Many claim to progress more than halfway through the purchase cycle before they reach out to vendors.

And we found ourselves facing a similar reality. While the organization had invested in a Customer Reference Program (CRP), which involved creating ‘reference material’ such as glossy case studies, and customer success stories that sales could utilize when asked for quick customer references. Given the change in customer buying behavior the efforts of the customer reference program could not satisfy all the needs of our sales teams.


The demands rangedfrom:

2.2: Transform employee driven client references to customer driven advocacy and engagementTo meet the needs of sales and marketing efforts we needed to build a program that would continue to create compelling content but with new elements to respond to the demands of the new agecustomer. The project objective was to gather satisfied and committed customers and convert them to “advocates” – or loyal customers who were willing to support word of mouth referrals, secure patronage for our organization and improve marketing efforts. Attracting and influencing loyal customers and inducing them to participate in a relationship to help sell our firm’s productswere the objectives of this ‘advocacy program’. We found that advocacy program could lead to better brand positioning, strategic customer relationship development and even enhance product and service delivery.

The authors built the Advocacy Messaging Framework on the existing foundation of the Customer Reference Program, and developed the client advocacy framework using the following guiding principles:

Loyal and satisfied customers – We had solved their biggest IT challenges and had developed a close relationship with influencers in their organizations.

Credible source of product information – Customers who were trusted as sources of reliable product information. Since they were not paid to advertise our services and other firms would be willing to listen to their recommendations more than content marketing

Leveraging their size and scale – Utilizing the influence of even a small number of large and well known customer brands we believed could go a long way in spreading our sales and marketing messaging.

Tapping into these loyal customers gave us a new sales tool for entering new market segments and gaining new customers. The difference however was that the new model allowed for transitioning from sales led selling to a customer led selling approach (Refer Figure 1)


Figure 1 – Transitioning from customer references to a strong customer advocacy program

2.3: The plan: Creating the advocacy advantageFinding the right people and getting them to speak at the right time was an important objective of the model; to achievethis we followed a Three Step approach(ReferFigure 2):

Figure 2 – Three Step approach for an advocacy advantage


2.4 Sustaining the modelOnce the framework was built we needed to ensure that it could be sustained we introduced the following Closed Loop Advocacy Process (Refer Figure 3):

Figure 3 – Closed Loop Advocacy Process

2.5 Execution modelThe team for this project was based on the following hierarchy (Refer Figure 4)

Figure 4 – Customer Advocacy Team and Roles


Standardized customer approved templates

Client Engagement Summaries, Case Studies, Customer Whitepapers, Logos, Press Releases, and Analyst Reports

Customer Advocacy List

List of all customers who have signed up for the Advocacy Program

RACI Matrix – Responsibility chart to list down all stakeholders and program members with their roles and responsibilities

The team was given access to all sales, marketing and customer-related information. Using this information the team worked with senior marketing managers,to develop a consistent advocacy messaging framework.

Guidelines for advocacy selection and the Advocacy Toolkit

The team procurred an exhaustive client list from the sales teams and then categorized them to select the top advocates for certain services and solutionsThe guidelines for categorization, included factors such as such as –

Whether the customer is a marquee client (present in the FT 500 list) Revenue contribution to the organization’s global sales Recent Customer SAT scores, and net promotor scores Duration of relationship with the company Reference status.

Each category was assigned a weightage. And a sum total of the scores determined who was to be ‘top’ advocate and who was not. The team stored all their data in a common, sharable database called the Advocacy Toolkit (Refer Figure 5)

Figure 5 – Advocacy Toolkit


Integrated Outreach Program

The first choice for our top advocates to speak was to speak at premier events . To meet this goal and ensure we had a sufficient pool of advocates for speaking events we set up a ‘customer advocacy panel’ which comprised clients from different verticals who have bought similar solutions. A customer advocacy panel was set up for each of our high growth solution areas and these clients were given speaking slots at premier industry event. The global advocates were also present at webinars and round tables organised by the company or at a partner event.

Besides events the customer advocacy panel was assembled on a regular basis to meet with a senior representative from the company , to discuss and talk about their experiences. This first hand customer feedback was looped back to delivery heads and product development teams to enahnce our services and solutions.

We also ensured we had a ”Voice of the Customer Section” on our company website , which housed interviews and video blogs besides quotes on successful implementations.

To strengthen ties with the advocates the company also invested time and effort in creating an awards program for customers. Two awards are given out annualy an ‘innovator award’ and a ‘channel partner award’. A nomination process and a selection comitte was set up to shortlist and choose the winners. The awards were presented at a special awards ceremony with press releases and ample media coverage.

Figure 6 – Integrated Outreach Program - Putting the plan in action


Customer advocacy team

Buy-in and budget approval from marketing leadership teamTeam selection Access to all sales, marketing and customer related information to the team

Guidelines for advocacy selection

Listing and categorization clientsGuidelines - Marquee client (from the FT 500 list), Share of wallet, CSAT scores, length of relationship, reference status -Mapping solution-specific messaging with each advocate

Events and platforms for advocates

Speaking slot / booth at premier industry eventsBuilding a customer advocacy panel Invitations from advocates to attend their events, and setting up a co-branded event and annual awards

3. Managing the ProgramAs part of the core team, we believe that the foundation of a successful Customer Advocacy Program is based on sustaining relationships, and that by managing the following principles, this program can grow to meet the meet the needs of the global sales and marketing teams.

Regular interaction – We created a central advocacy-focused marketing communications strategy as part of their plan to engage and nurture an active community of customers which can then be leveraged to reach out to potential clients. This helped provide an integrated marketing outreach platform with clearly defined benefits for our advocates, and tools to collect feedback. Partnering with the Digital Marketing team helped us use social media as a tool to support the program through promotions on our organization’s Facebook, LinkedIn, Twitter, and blog pages.

Keeping an ear out –To collect and analyze feedback, the team paid more attention to the online feedback mechanisms to gather reviews and comments on the organization, tweaked our customer satisfaction surveys to collect more direct feedback, and supported the portfolio marketing team to churn out client-facing collateral focusing on innovation delivered through our products and services.

Proactive responsiveness – We also started to work with the global PR teams, subject matter experts (SMEs) and marquee company spokespeople to elicit responses to frequent issues and concerns brought out by customers through though leadership pieces, external client webinars and blogs.

Managing a global base of strong customer advocates can be a very challenging process.A few of the challenges we faced and how we managed them is listed as follows –

Advocate identification process - The team needed to convince the account manager community first to encourage their accounts to participate in this program. Using the influence of the Program Sponsor, the team launched an internal promotion campaign to convince accounts with high C-SAT scores to join the program. As part of this launch, promotional material was created to share with regional sales and account team, videos were created to showcase the benefits of the program and meetings took place across business units and regions.

Retain the customer base needed to build a strong advocacy platform - As some of the high-profile, marquee customers fell in the public sector space with a few others having a strict no-reference policy, the team had to modify their pitch to these accounts to encourage them to continue supporting the program. The team worked with the Quality Assurance team to institute an ‘Innovation Delivery’ channel which focuses on the innovation delivered through our solutions rather than focusing on the specific customer issues and concerns. Separate innovation delivery mechanisms were created and customers were then invited to sign up for these groups as part of a global panel. This method was instrumental in convincing advocacy-shy customers to join an innovation-driven panel and act as spokespersons for the organization.

Recruiting new customers - We worked with the Learning & Development team to develop a series of external customer focused webinars, in two categories – by offering and by industry vertical. Promotions for these webinars was driven by the PR and the Social Media Marketing teams across various channels. All new client attendees were then mined for inclusion in the advocacy program.

Maintaining an active, calid repository of assets - Direct inputs on new product features, information on new product development, customer requirements gathering, messaging, creating marketing communication, and access to the organization’s reference library helped the team run the program seamlessly. We worked with the reference team to ensure that all customer references, including quotes, logos, summaries, and case studies were refreshed regularly, with new accounts being pursued to grow the reference pipeline and become more reactive to


customer feedback. Customers who opted out of the reference program were pursued aggressively to convince them to participate in the advocacy program as panel members.

4. Measuring Customer AdvocacyOne of the biggest limitations in the field of customer experience management is the lack of clearly defined variables and instruments to effectively measure those variables. Some of the key questions to ask would be:

What is the kind of data we have on our customers? What metrics are most important to capture on our customers and relevant to business? Is the metric to be a raw measure or will it be derived or modeled from one or more data sets? How will it be measured and what is the source? When and how frequently will the measure be made? Are there known gaps in the data?

Enterprise CRM tools such as Salesforce.com can help create customer profiles and revenue views but unfortunately, that is only half the story, as data by itself does not mean anything unless it is actionable. Today, most companies are sitting on a goldmine of data that is being underutilized. Customers provide new information each day to companies about their status in the marketplace. With enough customers, this information creates patterns that can not only help identify least loyal customers that are most likely to go to your competitors, but also help identify those most loyal and help you focus your sales and marketing efforts and dollars on the right groups. This is where, having a Customer Advocacy Measurement Framework (refer to Figure 7) can help companies think about customer loyalty and help them identify customer loyalty metrics to help them better measure and manage business growth.

Figure 7 -Customer Advocacy Measurement Framework


Customers are broadly classified in these four categories with associated measurement metrics as described below. This classification is maintained in what we call as the Customer Advocacy Efficacy Tracker and it continually gets updated quarter on quarter.

New Customer Measurement Metric = Acquisition Score: Is derived from new logos or first time customers. Weightage is assigned to each customer based on market recognition (Global 1000, FT 1000), size and industry along with some specifics around the deal.

Returning Customer Measurement Metric = Retention Score: Customers with high CSAT ratings (>=8 above on a scale of 1-10) and are open to cross sell and upsell opportunities.

Loyal Customer Measurement Metric = Reference ability Score: Is derived for customers who are willing to refer and participate on request in sales opportunities. Weightage is assigned based on size of customer, share of wallet, breadth and depth of offerings and willingness to refer within same industry.

Advocate Customer Measurement Metric = Advocacy Score: Customers are assigned this score and hold the highest form of loyalty status and who are willing to invest in development of marketing programs and like to pro-actively stay engaged. They are willing to talk openly about their experiences in the social media and other digital channels. They act as strategic partners to your business growth.

4.1 Customer Advocacy and Net Promoter score (NPS®) – Sticky WicketToday, Net Promoter score (NPS®) is considered to be the standard for measuring and acting on customer loyalty data. The Net Promoter model (Refer to Fig: 1.2) is an approach in which you use your Net Promoter score to drive improvements in customer loyalty and ensure profitable growth. It is based on one simple question that is asked to customers which is , "On a scale from 0 to 10, with '0' be 'very


unlikely' and '10' being 'extremely likely,' to recommend the company, product or service to a friend or colleague." Scores of "9" and "10" are recognized as "promoters." Scores of "7" or "8" are recognized as "passives." Scores of "6" or lower are "detractors." The percent of responders that are "detractors" are subtracted from the percent of responders that are "promoters." The result is the net promoter score (NPS).

Figure 8 – Net Promotor Score

From a scientific perspective there is some skepticism about the NPS. Some argue that customer loyalty is not only about numbers and percentages, but also about causes, consequences and correlations. NPS takes into account customers, while also a lot of non-customers can act as detractors and generate bad word-of-mouth publicity. Furthermore, the NPS disregards important differences in the answer score distribution: no distinction is made between a 0 score and a 6 score, while there is obviously a substantial discrepancy between those two. It also makes no difference whether there are 70% Promoters and 30% Detractors or 40% Promoters and 0% Detractors. Both result in an NPS of +40 which doesn’t seem very logical.

Therefore, we recommend caution in using NPS as the measurement indicator for highest level of customer satisfaction as we believe that NPS can serve well as an indicator and not the absolute measure for customer advocacy. Macro factors such as industry, competitor landscape also play a vital role for understanding customer experience.

5. Conclusion

Investing in a sustainable customer advocacy program gave our customers more control and accountability in our interactions with them, thus strengthening the case that we are now truly living in the age of the customer. Once this program was in place and managed well, we realized better relationships with our clients, continous improvements in our product portfolio, an improvement in internal stakeholder satisfaction from the sales and account community, and a more streamlined alignment with your company’s core strategy and growth plans. As this is a continously evolving program, the program team and the marketing department gained greater insight into customer concerns and issues, leading to an improved execution model to deliver greater financial returns for our company.


6. References

Forrester research report – “Tip the balance from reference customers to advocates” by Peter O’Neill, February 05 2014

7. About the Authors

Sowmya Moni has 14+ years of proven experience in technology marketing. She holds an MBA in Marketing from MDI, Gurgaon and is a certified PMP.

Roopa Pereira has 10+ years of experience in the IT marketing domain in marketing communications and project management. She has a Master degree in English Literature.

Sameer Murdeshwar has 6+ years of experience in market research and marketing communications. He holds an MBA in Project Management.


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Presentation by sameer murdeshwar