Your competitors may be your natural detractors, but they can become powerful advocates when they refer to you as the industry standard or benchmark to beat. A new study by Euromoney assesses the power of ‘rival advocacy’. Rival advocacy happens when a competitor references you positively in conversations with a client or prospect. You might benefit from an explicit recommendation, but you’re more likely to be implicitly endorsed through a comparison or association; “Think of us as Business X, only better.” By acknowledging Business X as a benchmark or standard, competitors are making an implicit endorsement of Business X.
To test the impact of rival advocacy in a B2B scenario, Euromoney commissioned a 3rd party, independent agency to run a series of experiments and surveys. The agency, Brand Genetics, used their specialist team of psychologists, brand strategists and data analysts to conduct the work. 603 senior business decision makers across the UK were recruited in Q2 2016 and invited to read a short online press release from an imaginary FinTech startup offering an innovative loan. Before reading the press release, half of the business decision makers were first exposed to an example of rival advocacy; a press release from a leading bank comparing one of their new products to those of the imaginary startup. If the rival advocacy hypothesis held, then this exposure to rival advocacy would result in more positive evaluations of the startup.
Business decision makers who were exposed to rival advocacy evaluated the startup more positively. Most striking was the effect of rival advocacy on a leading reputational metric, the Net Promoter Score (NPS). With only the press release to go on, it is unsurprising that the NPS (propensity to recommend) of the startup was rated poorly at -51. But those exposed to rival advocacy rated the startup 14 points higher at -37. To put this in context, Bain & Co have associated a 12 point increase in NPS to a doubling in growth.
Statistical analysis of the data confirmed that this effect of rival advocacy was indeed statistically significant with the mean propensity to recommend on a 0-10 scale jumping 6% from 6.68 to 7.10 (F(1,601) = 4.809, p = 0.03). This positive effect of rival advocacy also manifested itself in a 5% increase in intention to investigate the startup’s services; rising from 6.87 vs 7.26 (F(1,601) = 3.806, p = 0.05). A 5% jump in incoming leads as a result of rival advocacy may have the potential to yield significant rewards.
Competitor Promotor Score (CPS)
Rival advocacy is a new twist on the power of advocacy to drive business, and it remains an open question for how business should best harness its potential. But the reality of rival advocacy and its impact on reputation suggests that firms might profit from listening to what their competitors say about them as keenly as they listen to clients. It might even be time to consider some kind of ‘CPS’ - Competitor Promoter Score to complement the client-focused NPS. In addition to tracking CPS, root cause research could identify the core drivers of rival advocacy. And based on the reputation of rival advocates, firms could prioritise initiatives that stimulate the advocacy of rival ‘super-promoters’. Ultimately, your reputation is what others say about you when we leave the room. And through rival advocacy, now you know that those others include your competitors.