The customer advocate and the customer saboteur : linking social word-of-mouth, brand impression, and stakeholder behavior

398 Pages·2011·1.94 MB·English

by  Michael W. Lowenstein

The Customer Advocate
and the
Customer Saboteur
H1410_Lowenstein.indd i 6/1/11 1:37 PM
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The Customer Advocate
and the
Customer Saboteur
Linking Social Word-of-Mouth,
Brand Impression, and
Stakeholder Behavior
Michael W. Lowenstein
ASQ Quality Press
Milwaukee, Wisconsin
H1410_Lowenstein.indd iii 6/1/11 1:37 PM
American Society for Quality, Quality Press, Milwaukee 53203
© 2012 by ASQ
All rights reserved. Published 2011
Printed in the United States of America
16 15 14 13 12 11 5 4 3 2 1
Library of Congress Cataloging-in-Publication Data
Lowenstein, Michael W., 1942–.
The customer advocate and the customer saboteur : linking social word-of-
mouth, brand impression, and stakeholder behavior / Michael W. Lowenstein.
p. mc.
Includes bibliographical references and index.
ISBN 978-0-87389-811-9 (alk. paper)
1. Customer loyalty. 2. Customer services. 3. Customer relations. I. Title.
HF5415.5.L685 2011
658.8'12—dc22
2011015231
No part of this book may be reproduced in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher.
Publisher: William A. Tony
Acquisitions Editor: Matt Meinholz
Project Editor: Paul O’Mara
Production Administrator: Randall Benson
ASQ Mission: The American Society for Quality advances individual, organiza-
tional, and community excellence worldwide through learning, quality improve-
ment, and knowledge exchange.
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Printed on acid-free paper
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To Susan,
my truth woman
and
in loving memory of my mother,
Sylvia Yoffee Lowenstein
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Contents
List of Figures and Tables . . . . . . . . . . . . . . . . . . . . . . . . ix
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix
Chapter 1 What Are Customer Advocacy
and Customer Sabotage
(aka “Badvocacy”)? . . . . . . . . . . . . . . . . 1
The Rapid Evolution from Total
Quality, Satisfaction, Loyalty, and
Recommendation Measurement . . . . . 10
What Is Customer Advocacy, and Why
Should It Be a Key Organizational
Focus? . . . . . . . . . . . . . . . . . . . . . . . . 13
The Undeniable Power of
Word- of-Mouth . . . . . . . . . . . . . . . . . 14
The Importance of Brand Engagement
and Favorability . . . . . . . . . . . . . . . . . 16
The Marketing Value of Customer
Advocacy . . . . . . . . . . . . . . . . . . . . . . 17
Customer Advocacy for B2B Products
and Services . . . . . . . . . . . . . . . . . . . . 19
vii
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viii Contents
Customer Disaffection, Alienation, and
Sabotage . . . . . . . . . . . . . . . . . . . . . . . 27
The Future of Customer Advocacy . . . . . 28
Chapter 2 The History of Customer Advocacy
and Sabotage . . . . . . . . . . . . . . . . . . . . . . 31
A Brief Chronicle of Communication
Evolution through the Centuries . . . . 32
Customer Sabotage on Steroids: The
Pivotal Internet Trademark Case
of Bally Total Fitness Holding
Corp. v. Andrew Faber . . . . . . . . . . . . 46
Chapter 3 The Importance of Experience,
Authenticity, and Trust in Customer
Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . 49
Customer Trust: Need Intersecting with
Delivery Belief . . . . . . . . . . . . . . . . . . 50
The Economic Power of Negative
Customer Experiences . . . . . . . . . . . . 54
When Trust Vanishes: A Restoration
How- To Example . . . . . . . . . . . . . . . . 55
Customer Complaints: Getting the
Whole Enchilada . . . . . . . . . . . . . . . . 56
The Power of Unexpressed Complaints,
and a Commercial Banking
Example . . . . . . . . . . . . . . . . . . . . . . . 58
Reputation, Trust, and Advocacy . . . . . . . 62
Advocacy Strategy and Tactics: Motor
Vehicles as a Metaphor . . . . . . . . . . . 64
The Relationship “Lasagna” Recipe for
Optimizing Impressions, Experiences,
Trust, and Advocacy . . . . . . . . . . . . . . 69
The Lessons and Opportunities of Strong
Reputations and Customer Trust . . . . 77
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Contents ix
Chapter 4 The Business Case for Creating
Customer Advocacy (and Eliminating
the Potential Negative Impact of
Alienation and Sabotage) . . . . . . . . . . . 79
Managing the Customer Life Cycle to
Drive Advocacy Behavior . . . . . . . . . 81
Customer Service as a Key Driver of
Advocacy Behavior . . . . . . . . . . . . . . 89
Overall Key Findings and Implications of
Service- Based Experience Research . . 91
Impact of Negative Experiences . . . . . . . 93
Profitably Managing Complaints for
Leveraging Customer Advocacy . . . . 94
Driving Customer Trust and Advocacy
through Superior Service . . . . . . . . . 99
An Overview of Service Implications for
Downstream Customer Advocacy . . . 103
Summary . . . . . . . . . . . . . . . . . . . . . . . . . 107
Chapter 5 Measuring and Monetizing Customer
Advocacy . . . . . . . . . . . . . . . . . . . . . . . . . 111
A Brief History of Customer Loyalty
Behavior Measurement . . . . . . . . . . . 113
Measuring Customer Advocacy . . . . . . . . 124
Monetizing Customer Advocacy . . . . . . . 127
Examples of Advocacy Measurement
and Monetization: B2C Retail Banking
in the United States and the United
Kingdom . . . . . . . . . . . . . . . . . . . . . . 128
Chapter 6 Recommendation and Referral:
The Hype and the Reality of “One
Number” . . . . . . . . . . . . . . . . . . . . . . . . . 135
The Good, Bad, and Ugly Represented
by One Number . . . . . . . . . . . . . . . . . 137
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x Contents
One-Number Credos and Claims versus
Real- World Challenges . . . . . . . . . . . 148
Communication-Related Downstream Action
Taken by Customers Resulting from a
Product or Service Experience . . . . . . 150
Recommendation Is Not—Repeat Not—
Advocacy . . . . . . . . . . . . . . . . . . . . . . 155
Magic versus Actionability . . . . . . . . . . . 160
Chapter 7 The Other Side of the Coin: Negative
Word- of-Mouth, and Customer
Alienation and Sabotage . . . . . . . . . . . . 163
Potential Business Impact of Negative
Word- of-Mouth . . . . . . . . . . . . . . . . . 165
Advocacy and Alienation Buzz . . . . . . . . 167
The Internet as Customer Alienation
and Sabotage Enabler . . . . . . . . . . . . . 169
Employees as Saboteurs . . . . . . . . . . . . . . 177
Lessons and Prescriptives . . . . . . . . . . . . 180
Chapter 8 Intersecting Inside- Out and Outside- In
Customer Advocacy . . . . . . . . . . . . . . . . 185
Firms of Endearment: Recognizing How
the New Outside- In Communication
Dynamics Are Affected by Inside- Out
Advocacy Creation . . . . . . . . . . . . . . . 187
Delivering Happiness—the Zappos
Story . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Differences between Inside- Out and
Outside- In Customer Commitment
and Advocacy . . . . . . . . . . . . . . . . . . . 192
Sustaining the Execution: Customer-
First Teams and Groups . . . . . . . . . . . 196
The Value of Customer- First Teams . . . . . 198
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