Question

Topic: Strategy

Impact Of An Advocacy Programme On Sales

Posted by Anonymous on 8/29/2004 at 8:13 PM ET 400 Points
Hello all..

My client is a car manufacture, and they run advocacy programmes in form of experience days for customers and guests. The aim being to generate word of mouth and enhance referrals by its existing customers.
They is already ample evidence collected to show that the advocacy programme has a positive impact on loyalty, perception of brand and product and advocacy.
The question is how to measure the impact of the programme on sales. i.e. how can the firm calculate how many referrals will come from one customer based on his participation in the experience day. My initial thoughts were to develop a model that can measure the cash contribution that the WOM of a customer creates. I can see a posible linakge to customer lifetime value(CLV).
Any thoughts?????

D
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RESPONSES

  • Posted by Chris Blackman on 8/29/2004 at 8:44 PM Accepted
    Have you thought about creating a program where the company has a way of identifying people who have been referred by the "advocate"?

    If you do that, it's important not to put additional incentives into the referral process. If you do, you may wind up measuring the effects of the incentives in the process, not the effect of the advocacy program you are trying to measure.

    Whuch creates a conundrum: How to make sure advocates are correctly identified (a potential bind both for advocate and referee) without having an incentive?

    Questions:

    1. At the end of the Advocacy Days - do you ask participants whether they would recommend the vehicle to friends?
    2. Do you ask for referrals at that stage?
    3. Do dealers ask every prospect whether they were referred by an "advocate"?

    I think the measure of impact of the programme on sales is (sales from referrals) - (cost of program).

    The hard part is measuing the (sales from referrals). And how would you treat a prospect who purchased after referral but was going to buy the vehicle anyway?

    Do you conduct post-purchase focus groups? If so, the advocacy program would show up as an influencing factor in the purchasing decision, wouldn't it?

    Hope this helps

    ChrisB



  • Posted by jcmedinave on 9/2/2004 at 5:53 PM Member
    - Ask your customers at every sale, why did they arrive to you?
    - Develop continuing customer researches (who did they incentive to by from you?)
    - Mark your database in a way that permit the differentiation and produce statistics. (Example "1" if the customer come by referral and "0" if not).


    Related to metrics check: FAQ in MarketingProfs https://www.marketingprofs.com/Faqs/showcategory.asp?CatID=10
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