In a digital world, your customers can kill you

In today’s digitally driven and socially engaged world, the customer isn’t just always right. An unhappy customer can destroy your business.

angry customer

It's a strange digital world where a sale might not be good for a company and a customer might be more valuable than the dollars they spend. We're talking about the emergence of the customer advocate who wields a mighty online bullhorn.

"We live in the age of the customer, no longer the age of the seller," says Jill Rowley, social selling expert speaking at Advocamp Conference in San Francisco this week. "Customers have a choice and a voice."

Social networks have made it easier to talk to peers than ever before. Potential customers lean on reviews from complete strangers. People conduct online research of products and services in great detail, scan message boards, email questions, follow user recommendations and shun marketing messages. In other words, social networks have amplified word-of-mouth marketing to unimaginable levels.

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And this has changed the sales and marketing game.

It’s not about the money

Companies have traditionally quantified customer value using a convoluted formula based on how much the customer will spend on its products and services over a lifetime. The CFO has always held more influence over business decisions than the CMO. Every sale was considered a win in the minds of quarterly driven salespeople.

But this doesn't make much sense in the digital world where a happy or unhappy customer can greatly affect other people's buying decisions over a long period. If a customer buys a product and has a great experience, she'll refer it to friends, write good reviews, join online communities full of potential customers, provide valuable feedback to the company, and maybe even defend the brand on her social network.

The customer advocate has become a company's most important marketing asset. "Your best salespeople are not on your payroll," Rowley says. "They are your best customers advocating on your behalf."

[Related: Getting in Customers’ Faces ]

Conversely, a customer with a bad experience will surely let people know on his social network, which, in turn, can have a snowball effect. The fact that an irate customer spent money means little compared to the potential and long-term fallout of that customer having an online bullhorn. Such sales destroy customer advocacy.

"It's what I call 'bad profits,'" says Fred Reichheld, author and creator of the Net Promotor system, speaking at Advocamp.

From marketing to nurturing

Marketers, too, need to change the way they look at their jobs. No longer can they focus solely on product messaging and short-term marketing campaigns. Social networks are littered with marketing efforts that have backfired because consumers now own the conversation. Instead, marketers should be nurturing a long-term relationship with customers in hopes of turning them into brand advocates.

[ Slideshow: 12 shockingly stupid social media misfires ]

It's still the early days of customer advocacy in the era of social networks, and marketers are trying to find their footing, but already giant hurdles loom. For starters, customer advocacy programs cut across departmental lines, such as marketing, sales, customer service and product teams. Everyone needs to recognize the importance of the customer advocate and work together to woo them.

There's also a boatload of technology required for a customer advocacy program, such as a company-wide advocacy software platform that helps manage and measure effectiveness. Data integration and analytics also play critical roles. At Advocamp, for instance, a bunch of tech vendors -- Gainsight, Slack Technologies, Extole, Boulder Logic, Influitive (which hosted the event) -- showed how their offerings supported the customer advocate.

Given all the technology, there's no question CIOs need to get on board with customer advocacy, too.

Copyright © 2015 IDG Communications, Inc.

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