Estimating The Value of an Advocate

You may need a way to estimate an Advocate's value before launching advocacy programs. You can use the formula suggested by Owen and Brooks in their excellent book. If you need something more simple, here's a logical way of estimating the value of an Advocate plus the person's advocacy value. Spend value. This is how much a Brand Advocate spend s on the company's products and service over the lifetime of his or her relationship with the company or brand. In many companies, Brand Advocates spend at least twice as much as average customers, studies by management consultants Deloitte and others show. Online IT retailer CDW says that its Advocates spend 14 times more than average customers. to be conservative, I use Deloitte's findings and estimate that Advocates spend two times more than average customers.

Advocacy value. This is the sales and marketing value that the Brand Advocate provides via recommendations and referrals. This includes positive ratings and reviews; glowing testimonials; answers to prospects' questions; enthusiastic comments on Facebook, Twitter, blogs, online forums and more; and shared offers.

I estimate that Brand Advocates are worth at least five times more than average customers.

  • Many Brand Advocates spend significantly more than twice as much as average customers.
  • The actual number of customers who purchase a company's products or services as a result of Brand Advocate's recommendation may be much higher than in many examples above given the trust, influence, and reach of social media.
  • Customers who come to companies as a result of Brand Advocates' recommendations are more likely to become Brand Advocates themselves, studies show.

Advocacy helps brands sell millions of dollars in products and services. Brands do not pay for or provide incentives for advocacy.