Quantifying the Financial Power of Advocacy
|BOSTON - Oct. 24, 2005 -- The Boston-based market research firm of
Chadwick Martin Bailey (CMB), today announced the results of its latest
study on the power of advocacy in the travel and hospitality industry.
The findings reveal that at the current rate of occurrence, advocacy will
directly influence more than $30 billion in travel and hospitality sales
and indirectly influence more than $250 billion over the next year by both
attracting new customers and influencing where dollars are spent. The industry
categories surveyed by CMB included: cruise lines, upscale hotels, vacation
resorts, casinos, amusement parks, casual full-service restaurants, airlines
Among the most significant outcomes of the survey, it was found that 27 percent of the U.S. population had gone to restaurants in the past year based solely upon recommendations from advocates. With an average spend of $50 per visit, this translates to more than $3.3 billion worth of annual advocacy-driven purchases at restaurants. Similarly, while it was found that 11 percent of the U.S. population had taken a cruise, four percent of the U.S. population chose a cruise line that came recommended by an advocate. With an average spend of $3,000 per cruise, advocacy directly drove more than $9.5 billion worth of cruise purchase decisions over the past year.
"It's important to recognize that advocacy is different than buzz," said Judy Melanson, Travel and Hospitality Practice Leader at Chadwick Martin Bailey. "An advocate is an evangelist, not content to merely pass along or comment on the 'latest thing,' the advocate is driven by a heartfelt belief that you should buy this product, and is ready, willing and able to explain why. We see buzz as more a subset of advocacy - more of a short-term, viral campaign during which a willing accomplice spreads information or excitement."
The "Influential" Factor
Key among the CMB findings are the benefits of targeting "influentials(sm)," or those whose opinions carry weight among a wide audience. While "influentials," often the targets of popular buzz campaigns, represent approximately 10 percent of the population, they also account for 16 percent of advocacy spending. However, the resulting 90 percent of the population that may be considered "non-influentials," also represents 84 percent of advocacy spending in the U.S.
Other key findings of the survey include:
"There has been an explosion in the amount and reach of 'non-company controlled' communications," continued Melanson. "By implementing measurable advocacy strategies, companies can perform 'market judo,' leveraging these new marketplace realities to their advantage. Those who lack an understanding of the nature of advocacy in relation to their business, and fail to develop strategies to increase advocacy levels will find themselves struggling upstream against a very powerful current."
For the study, Chadwick Martin Bailey surveyed a general population of more than 1,000 respondents within the U.S. For more information on this research study please contact Judy Melanson at 617-350-8922.
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