The True Value of Fans
Diversification with Fans
The True Boost for Your Growth
Everybody wants to turn customers into fans! However, most companies focus solely on customer satisfaction, whereas turning customers into fans is mostly just an exercise in lip-service. Only those that understand that real fans need to be the basis for any strategy are rewarded with economic success and sustainable growth.
This has been proven by our research and practical experience from more than 25 years of market research and consulting. This series of articles illustrates how valuable fans are for your growth.
Fans Are THE Booster for Growth with New Customers & New Products
Growth with new customers and new products – called product diversification – is something all companies strive for. However, this growth strategy is associated with the highest risks.
How do Fans Help in Market Development?
For your company or for your brand, fans are indispensable pioneers when it comes to winning new customers. Fans like to share their experiences. They like to talk about their favorite provider; about their preferred brand. This has been remarkably proven by our “Fanfocus Germany” study. All other customer groups (see fan portfolio) tend to be a lot more quiet.
Your best and loyal customers do not simply limit themselves to sharing their satisfaction with your performance, products and services. They also actively recommend them to others. These recommendations are always met with an open ear from potential new customers. Marketing departments have long been working with testimonials, authentically describing their experience, and presenting a good image to the public.
Recommendations from fan customers are even more valuable: they are not paid for, not artificially induced. Consequently, they are unrivaled in credibility and persuasiveness. The advice of fans weighs heavy. This is because fans have a high level of expertise when it comes to “their provider”; in some cases, they are more familiar with the products and services than the “provider” itself.
This makes the fan an indispensable instrument for market development. Today, the fan’s impact is no longer limited to word-of-mouth communication. The central platform for customer testimonials is the Internet. Through social media platforms, every customer is given an opportunity to provide positive or negative testimonials. And every customer has the opportunity to retrieve such testimonials as needed.
If you already have a high proportion of loyal current customers, you rarely deal with customer fluctuation and persistent new customer acquisition measures to compensate this instability. Your customer base remains secure and steady, and all investments can go into actual growth. However, if customers are not emotionally loyal to your company, but merely “satisfied”, hundreds of studies have shown that customers will leave quickly as soon as a competitor entices with attractive prices.
Fans will weather a crisis together with their provider. They will stay, even if there are quality problems. Across all sectors, 57% of fan customers answered that they “fully agree” with the statement that they would still buy from “their” provider even if friends or acquaintances advised them not to.
Such commitment is seldom found among “sympathizer” or “mercenary” customer types. The reason that fans forgive mistakes is the same reason that makes them resistant to negative reviews: their customer relationship is based on an emotional quality, not on performance. Just as sports fans, they remain loyal to their companies even in the worst of times.
Fans are THE guarantee for sales. They buy more frequently and spend more money on the products of “their” provider. More than any other group of customers! And: fan customers are less price-sensitive: they perceive the conditions of their provider as much better than other customer groups do. For “mercenary customers” the price is most important – it is almost irrelevant for fans. This high willingness to pay, on the part of the fans, is directly reflected in the provider’s margin.
How do Fans Help in Product Development?
Fans are the first to purchase, use, and at best recommend new products. We know from many studies that fan customers have a particularly high propensity to cross-buy. Around two-thirds of all fan customers freely declare that they intend to extend their customer relationship to other products or services from their favorite provider. Fan customers are receptive to cross-selling or up-selling. This willingness is not surprising, but an absolute fan-typical behavior. Fans – whether in sports, culture, or business – are willing to spend large sums of money. And they are willing to put up with inconvenience as well: Just think of the long lines in front of Apple stores on the first day of the new iPhone.
The connection that fans feel is not only reflected in their loyalty. Fan customers are also highly involved – owing to their intensive relationship with the provider, they are anything but “indifferent” to how the company behaves on the market. Whether the company is successful or not, what products are developed and how it is perceived is important to fans. Fans are interested in their provider and their actions – and, therefore, follow their favorite company with a particular fervor. Fan customers do not remain passive but want to have “their say” – and have the necessary expertise to do so.
Studies show us that one in two fan customers believe that they can help their provider to further develop products and services. In fact, often fans know more about products and services than the company’s employees themselves.
Companies should factor the exceptional expertise of fans into their growth strategies: They can improve products and processes in a very needs-oriented and efficient manner, by involving their fans in optimization and (new) product development. Many companies now make targeted use of their fans know-how through various channels and platforms.
Conclusion: plan your growth in product diversification in a two-step process: with the potential of fans in market development and in product development.
The Fan Principle (according to Becker/Daschmann, Springer-Gabler-Verlag) segments customers into 5 types: opponents, captives, mercenaries, sympathizers and fans. Fans are the most valuable among them, because they are not only highly satisfied (such as sympathizers), but emotionally connected as well.
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