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Advocate Index is a methodology in the casino industry that gives casinos information that allows them to accelerate their growth and have a predictable model for future growth. Many casinos conduct research to determine if they are on the right track for growth, the premise being that customer satisfaction surveys will give them the data they need. However, credible research published in the Harvard Business Review shows there is zero correlation between customer satisfaction and the future growth of any business. In contrast, this advocacy methodology uses a simple survey that measures the degree to which casinos have guest and employee advocates. The basis of the methodology is that the more advocates a casino has, the more successful it will be.

History

Measurement of guest and employee advocates was introduced into the casino industry in October 2005 by Annapolis, Maryland-based Robinson & Associates, Inc., a customer service consulting firm to the gaming industry worldwide. Robinson & Associates had been helping casinos improve their guest service for more than a decade and leveraged that experience with the advocacy methodology. The methodology was announced to gaming trade media globally, generating coverage in Europe, South Africa and the United States. Companies such as Dell, Intuit, Enterprise Rent-A-car, Symantec and Harley Davidson use a system similar to the advocacy methodology to predict their future growth.

The Importance of Advocates

A guest advocate is someone who would be willing to risk their reputation for a casino by spreading positive word-of-mouth advertising of their own free will. If they are willing to be an advocate, they can be counted on to play at the casino again and frequently, generating repeat business. When advocates say positive things about a casino, that can cause other people to play at the casino, creating new business. Thus, guest advocacy can boost profits and higher profits generate growth. Employee advocates deliver the quality service that helps turn guests into advocates.

Advocate Index is a baseline number that tells casinos the degree to which they have guest and employee advocates. Studies show that world-class companies have a net advocacy score of 75 to 80 while the mean score for companies that do not use this methodology is 11. Thus, the higher the index score the better. Casinos just beginning to use advocacy methodology likely will discover that they need to make internal improvements to bring their score up.

It’s Not A Word Game

The word “advocate” is not a euphemism for “satisfied.” Casinos that do guest and employee satisfaction surveys are not engaging in advocate research. The measurement of advocates is a statistical research method. Advocates, not satisfied customers, are the key.

Easy to Understand and Communicate

Advocacy methodology is easy to implement and communicate internally. Management and employees focus on raising the advocate score ever higher. They only need to know one number. The simplicity of the advocate score supports its primary mission as a core metrics solution for senior management.

Extensive, Credible Research

Advocate Index is based on methodology that has been written up in Harvard Business Review. The research behind the methodology involved more than, 4,000 customers in 14 industries, including telecom, airlines, utilities, hotels, parcel delivery, cable, restaurants, financial institutions, supermarkets, discount stores, department stores and e-commerce sites and retailers. One key finding is that customer satisfaction has no correlation to a business’s future growth. The research shows that of typical questions asked of customers, the “likelihood to act as an advocate” question has the strongest link to tangible consumer behavior. Yet, casino executives adhere to the theory that satisfied casino guests will play again and again.

According to a Gallup survey, more than 40 percent of consumers who claim to be satisfied switch suppliers without looking back. In gaming, they go to a competing casino to play. Very satisfied guests do generate profit for casinos, but knowing how satisfied they are is not an indicator of the future. The methodology of measuring advocates is such an indicator. By asking one question, the casino collects simple and timely data that correlates to growth.

References

Reichheld, F.F. (2003). Harvard Business Review. December 2003.

Ellis Communications, Inc. (2005). Advocate Index Gives Casinos One Powerful Number for Predicting Future Growth and Profitability: Index Is Easy to Implement, Communicate Internally.