Last updated: Top 5 benefits of customer advocacy: How Huel drives out-of-this-world growth

Top 5 benefits of customer advocacy: How Huel drives out-of-this-world growth

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In order to outperform your competitors in today’s fast-moving market, you need to stay one step ahead with innovative strategies that help you stand out. Customer advocacy is one of these strategies.

Customer advocacy is when loyal customers actively promote a brand and its products to friends and family, driving referral sales.

Plant-based nutrition brand Huel knows all about the benefits of customer advocacy. At the SAP Emarsys Power to the Marketer Festival, they shared their experience with Mention Me, laying out a number of compelling reasons to invest in customer advocacy, including:

  1. Reduce customer acquisition costs + drive growth
  2. Referred customers have built-in trust
  3. Discover hidden customer value
  4. Uncover new, untapped customer segments
  5. Drive overall ROI

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1.  Customer advocacy benefit: Sustainable growth 

Imagine a marketing strategy that not only helps cut costs, but also powers return on marketing investment and long-term growth.

Instead of pouring money into top-of-funnel customer acquisition, customer advocacy focuses on leveraging your existing network, building relationships, and getting your customers to refer others to your brand.

“We want to help brands think advocacy-first, so that when you’re thinking about driving growth for your business, the first thing you think about is ‘how do we get our customers to spread the word?’ before investing in paid channels,” said Kat Wray, Director of Strategic Partnerships at Mention Me.

By taking an organic-first approach and focusing on leveraging their existing customer base, brands can save a serious chunk of ad spend, helping to significantly reduce their customer acquisition costs.

Huel’s community of loyal Hueligans plays a key role in its global growth. By tracking referrals, the brand knows that up to 22% of customers refer their friends and that 60% of those recommendations become new customers.

2. Customers pre-programmed for loyalty 

These referred customers come with built-in trust and loyalty, since someone they trust has vouched for your brand and their quality of your products. This makes them more likely not just to convert, but to become advocates themselves.

Huel found that customers referred by brand advocates are 3.5x more likely to go on and refer others. This creates a ripple effect that continuously brings in new customers.

These aren’t just any customers, either – they’re the right customers that are aligned with a brand’s values and are more likely to stay loyal in the long run. This benefit of customer advocacy means higher CLTV and a stronger, more loyal customer base.

3. Tracking referrals unlocks hidden customer value

Customers are a treasure trove of referral value. Huel found that by tracking referral data, they uncovered hidden gems within their existing customer base, discovering that their value likely extends far beyond their initial purchase.

For example, a customer who only makes two purchases a year might be auto-segmented as low value, but by tracking advocacy data, a brand could see that the customer referred seven friends who referred four more. So their value is much higher than previously thought.

Here, we can see how tracking customer value based solely on traditional metrics can be misleading. Without focusing on customer advocacy and tracking this data, customer advocates can be overlooked as low value.

4. Unearth new, untapped customer segments

One of the best benefits of advocacy data isn’t just revenue attribution – it’s insights into untapped customer segments that can actively drive new sales.

“Previously, Huel prioritized customer segments with highest CLTV. However, by integrating advocacy data, Huel unlocked five key segments that had low CLTV, but were driving a huge amount of referral revenue,” Wray said.

Traditionally, brands view the highest spenders as the highest value, so they focus their efforts and budget on them. Advocacy data turns this assumption on its head.

Huel discovered that there wasn’t a correlation between CLTV and number of referrals. In fact, some of their most valuable customers in terms of referrals actually had low CLTV.

With customer advocacy data, brands can uncover hidden customer segments packed with revenue potential.

5.  Real results: Benefits of customer advocacy

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As shown by Huels’ experience, advocacy programs have the potential to deliver seriously high returns on marketing investment.

How? Referrals snowball. They start small, but grow exponentially as referred customers start to refer customers of their own, who in turn become loyal brand advocates.

“The results we’ve seen speak for themselves. Referred Huel customers are 3.5x more likely to refer more customers themselves,” said Tash Reynolds, Global Head of CRM, Huel. “Advocacy and referrals can drive both high quantity and high quality customers.”

In just a year, Huel saw a significant impact on their customer acquisition strategy, nearly doubling the number of customers they won through referrals.

“Last year, we saw nearly 20% of new customers come from referrals, from 22% of our customers referring. This year, that’s projected to hit 27% – our biggest year yet,” Reynolds said.

Coupled with lower customer acquisition costs – since customer advocacy programs tend to leverage owned channels like email instead of paid social – advocacy becomes a powerful driver of overall ROI.

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