How do you find budget for a new customer advocacy program? Katie Curtin-Mestre, former VP of Product and Content Marketing at SimpliVity, a leader in hyperconverged infrastructure, once wondered the same thing.
1. Embrace the importance of a customer advocacy program
The first step to building a business case for customer advocacy is to uncover the important role it already plays at your company.
As a start-up in an emerging space, SimpliVity found that acquiring new customers wasn’t simple. “We’re in a new category competing against some large incumbent players in the infrastructure space,” says Katie.
However, SimpliVity knew from SiriusDecisions research their target audience, CIOs and IT infrastructure leaders, valued talking to references at multiple stages in the buying process, including:
When committing to change
When justifying the decision
When making the selection
Katie knew that traditional customer reference programs simply couldn’t scale to meet the needs of the business. However, an customer advocacy program would allow SimpliVity to discover and cultivate new customer advocates.
Find the areas where more customer advocacy can drive value for your brand and have an impact on sales and marketing to gain buy-in.
2. Find budget within existing spend
Many companies, especially larger organizations, have budgets that remain flat year after year—meaning it can be tough to get a new program funded, started, and off the ground.
In this environment, marketers must be creative and discerning about their current spend in order to identify pockets of budget available for a customer advocacy program.
Using benchmark data from SiriusDecisions, Katie shared that within a $500M company, $11.2M is typically spent on field marketing programs (which includes digital and event-based demand generation) and $5.4M for corporate/marketing communications programs. From these two buckets, decisions can be made to reallocate spend.
a) Consider spending less on the annual cost of a large event
Large global events can cost $250K+ each year. Often, these events attract the same attendees every year, or spend is justified because it supports “the brand.”
Katie cited a tweet she loves from Mike Volpe to explain this reasoning. “Sometimes, when people say ‘we’re doing events for the brand’, that’s code for ‘we don’t know why we’re doing this.’”
Instead, consider downsizing from the XXL booth to the XL. Or, in some cases, maybe sponsorship doesn’t make sense any more for your business every year.
“Customer advocacy programs deliver quantifiable results in the form of top of funnel leads (referrals), mid-funnel acceleration (customer roundtables, reference calls), and digital reviews—which can be a little harder to quantify, but we know their value,” says Katie.
b) Determine the value of your annual analyst subscriptions
Katie recommends taking a close, hard look at your analyst subscriptions to determine which analysts are truly delivering ROI to your organization in terms of their ability to influence prospects or the insights delivered to the company.
She recommends taking a tiered approach to analysts. “What value is your analyst program ultimately giving you, as compared to shifting some of your spend to a customer advocacy program?” she says.
Katie recommends that when making the business case for the purchase of customer advocacy software, avoid being bucketed by systems and tools, where companies may feel too much money is being spent already.
Instead, frame the spend as a necessary investment for your company’s overall strategic goals, whether they are more oriented to demand generation or reputation marketing activities.
How you choose to frame the discussion around value is important. For inspiration, Katie referred to the advice of the Cult of Money website, which helps others manage their finances effectively. Consider these three tips:
a) Compare the value of other yearly investments
Understand the value of a new customer advocacy program, compared to other programs whose value may not be as strong.
b) Re-frame which bucket the spending occurs under
Position the spend as part of the budget that aligns most to the value the program will deliver to your company—not a completely new one.
This could be demand generation, or it could be the reputation marketing activities of corporate marketing. For others, it could be framed as supporting your installed base marketing programs to reduce churn and support up-sell/cross-sell into your installed base.
c) Re-frame the frequency of the benefit
Frame the value over a longer period, just like how you would invest in a good pair of boots, justifying the spend with of the multiple years of use you’ll get from them. If your organization prioritizes Customer Lifetime Value (CLV), an investment in customer advocacy should be framed in the context of supporting your company’s goals to maximize CLV.
“The bottom line is this—it’s all about believing in the value, then convincing others to also believe in the value of investing in a customer advocacy program,” says Katie.
SimpliVity’s customer advocacy program has not only delivered tangible ROI, but it’s also deepened their relationship with their customers and enabled advocates to network with each other.