In this blog post
Betsy Westhafer
“It only takes 10% of a population holding an unshakeable belief to convince the rest of the population to adopt the same belief.” ~SNARC
Have you ever thought about what would happen if the top 10% of your happy customers went out and told your other customers and prospects how great your company is? Have you ever considered the impact of having your greatest advocates out in force to help tell your story?
Customer-driven growth is not just a good idea. It’s imperative in a highly dynamic and competitive market. There is no dearth of content written about “Advocacy Marketing,” and we’re talking about much more than getting testimonials. What I am suggesting is that companies develop compete strategies around the concept of Customer Leverage.
By creating a systematic and holistic approach, companies can leverage the power of their customer relationships for accelerated growth.
Take for instance, a Customer Advisory Board. In this setting, customers sit face-to-face with the executive leaders from their vendor or partner, providing insights beneficial to the host company while having the opportunity to influence the direction of a key supplier. In addition, board members get to network and share best practices with their peers while the executives from the host company build deeper trusting relationships with those in attendance. Win-win all around!
And here’s where the magic happens. Because of the nature of the advisory board, members feel compelled to help guide the host company to success, which includes advocating on their behalf. Because the relationships have been built in a confidential, transparent setting, trust is high and so they are now more open to participating in various modes of advocacy efforts. This may include co-writing a white paper, participating in a case study, sharing the stage for a panel discussion, co-hosting a webinar, or any assortment of activities that provide mutual value.
While many companies do this on an ad-hoc basis, the real winners are the organizations that have a customer leverage strategy that encompasses all aspects of customer-driven growth.
Consider this framework for a strategic approach to customer leverage:
- Audit
Establishes a baseline from which to identify and enhance areas in which you can effectively leverage key customers; provides your Customer Leverage Score™ (CLS).
- Advisory Board
Creates an ongoing system for leveraging customers in a strategic advisory capacity and deepens and strengthens trusting customer relationships.
- Advocacy Programs
Leverages the strength of key relationships to develop opportunities for customers to advocate on your behalf, while at the same time, creating value for themselves.
- Analytics
Indicates the success of the Customer Leverage Strategy by monitoring Key Performance Indicators and Return on Investment (ROI).
When approached in this manner, companies are more likely to find success in their efforts.
What Is a Customer Leverage Score™?
Much like the NPS (Net Promotor Score) measures the loyalty of a company’s customer relationships, the CLS™ measures the organization’s ability to leverage those loyal relationships.
During a CLS audit, various members of a leadership team are asked a series of questions regarding their current ability to leverage their customers. They come in the form of yes/no questions, along with a measure of consistency and effectiveness. An index score is calculated and then each area is measured in terms of perceived priority for the organization. Combining the index score with the prioritization leads to the overall Customer Leverage Score. Both quantitative and qualitative data are considered.
Categories for the audit discussions include, but are not limited to, Advocacy, Strategy, Innovation, Networking, and Internal Alignment. Each category is averaged to identify areas of strength and weakness.
Here’s an example:
Category: Strategy
Question: Do we let our customers know how valuablethey are to us by giving them an opportunity to influence our decision making and strategic direction.
Possible answer:
Yes, we have a Customer Advisory Board where our customers can influence our decision making and strategic direction. We are not consistent with having our board meetings, however, and when we do have them, they are only moderately successful. This is a high priority for us, but we just can’t seem to get the internal resources aligned to make them happen consistently and effectively.
The CLS asks various questions in the format you see above and serves as a baseline to measure the effectiveness of a customer leverage program. It’s recommended that the CLS audit be repeated on an annual basis to monitor progress.
Other Key Metrics
As with any great strategy, it’s important to have key performance indicators to ensure the strategy is securing the intended outcomes. Other key metrics for a customer leverage program may include:
- Advocacy efforts leading to new business
- Retention of Customer Advisory Board members
- Account expansion among advisors and advocates
- Others
Leveraging your key customers is undoubtedly the fastest way to win in your market and creates a significant and unique competitive advantage. There truly is no downside to utilizing your key relationships for mutual benefit.
Sources:
https://visionedgemarketing.com/four-key-considerations-for-creating-advisory-boards/
Betsy Westhafer is the CEO of The Congruity Group, a US-based consultancy focused on customer leverage programs. She is also the author of the #1 Best Seller, “ProphetAbility – The Revealing Story of Why Companies Succeed, Fail, or Bounce Back,” available on Amazon.
