Developed in the mid-1990s at Harvard Business School, the Apostle Model has been adopted and refined by CustomerSat into a powerful and flexible tool for segmenting customers and taking action to satisfy and retain them. It is also used as an overall performance indicator, with organizations establishing targets for the percent of their customer base represented by Loyalists or, more specifically, Apostles.

How it Works

One approach is to plot each customer’s overall satisfaction on the horizontal axis and their likelihood to continue doing business with you (loyalty) on the vertical axis of a scatter chart or diagram. Another approach is to create filters based on the parameters of each sector and sub-sector and apply those to database of respondents, generating the number (and names) of customers that fall into each category.

Satisfaction is crucial because of its profound impact on intention to remain a customer, future purchase behavior, and willingness to recommend. Research indicates that overall satisfaction is the best attitudinal predictor of a company’s financial performance. And satisfaction of individual customers is generally a good predictor of their individual future purchase behaviors as well. But as we will see below, there can be outliers. Some customers may have high satisfaction and low loyalty (mercenaries); others may have low satisfaction and high loyalty (hostages). The Apostle Model identifies and helps you manage all these combinations most effectively.

Customer sectors and strategies in the Apostle Model

The Apostle Model helps you understand and manage your customers by both their loyalty and satisfaction. It divides customers into sectors and sub-sectors:

• Loyalists, including Apostles and Near-Apostles, occupy the top-right sector. These are your most important customers and deserve special attention.
  
  
  • Apostles rank the very highest in loyalty and satisfaction. They often act as an extension of your sales force, actively promoting your company and spreading positive word-of-mouth. Suggested strategy: To retain Apostles, maintain an intimate understanding of their needs and wants, and make sure you are serving and protecting them to the best of your ability.
  
  
  • Near-Apostles’ satisfaction and loyalty scores are slightly below Apostles'. Suggested strategy: This customer segment deserves extra attention, because even a small increase in their satisfaction scores can trigger a significant increase in loyalty. Your goal is to convert them into Apostles.
  
  
• Hostages are loyal, but not satisfied. They see themselves as captive, trapped by a high cost of switching, a feeling that switching isn’t worth the effort, or by a simple lack of involvement with your company. As soon as more attractive alternatives become available, they are likely to leave. Suggested strategy: Improve communications and address their concerns to convert them to Loyalists.



• Defectors score low in both satisfaction and loyalty. Some are poised to reduce or stop spending with you because of one or more hot-button issues. Others become Defectors simply because their needs have changed. Both types underscore the need for ongoing customer feedback which lets you uncover changing needs or dissatisfaction while there is still time to address them. Suggested Strategy: Understand their areas of dissatisfaction and seek to address them.



• Subversives are the least-satisfied subset of Defectors. Totally disengaged, they are not only likely to flee, but also spread word of their unhappiness. Decades of experience has taught us that emotional reasons, rather than quality or cost, frequently drive customers away. Subversives often feel they’re being ignored or treated poorly. Suggested strategy: Listen, uncover their pain, and see if there are ways you can ease it. Even the simple act of having an executive call to acknowledge their unhappiness can sometimes increase satisfaction levels.


• Mercenaries exhibit high satisfaction but low loyalty. These customers are highly price-sensitive and will switch easily. Suggested strategy: If your business model depends on being a low-cost leader, you may want to assess your pricing versus the competition or refine your marketing messages to convey value delivered. If you lead with quality, not price, the products used by these customers may benefit by incorporating barriers-to-exit.

The Apostle Model positions your customers both in absolute satisfaction and loyalty, and relative to other customers. You can analyze customer segments by region, product line, call center, or other segments of your business. Understanding which sector or sub-sector a customer falls into suggests how it should be managed, resulting in improved account management, region management, and product management.

Best Practices for Apostle Model Implementation

To derive maximum benefit from the Apostle Model, a successful implementation should follow these key steps:

1. Examine your options.
   The Apostle model is one of several leading performance indicators for loyalty. Others include customer loyalty indices (CLIs) and net promoter score (NPS). Below, we discuss some of their pros and cons. Consider the strengths and limitations of each to determine what will best satisfy your specific needs, goals, market segments, product types and business model. Also, if you are a B2C business with a very large number of customers, you will want to plot markets or industries rather than individual customers. CustomerSat Professional Services can offer advice and recommendations, if desired.



2. Identify and understand customers in the key sectors and sub-sectors.
   The goal is to be able to take targeted action by sector and sub-sector. Try to identify what, if anything, the customers in each sector or sub-sector have in common. For example, if many of your hostages and defectors are in the same vertical market, that could indicate a poor fit between your products and the needs of that market. Generate lists of customers who fall into the critical sectors and sub-sectors, including Hostages, Near Apostles, and Subversives.



3. Make the Apostle Model a central part of your comprehensive customer feedback solution.
   Create filters for each of the Apostle Model sectors, and use these filters with other analytics. For example, apply the filters to Key Driver Charts (Quadrant Charts) to identify key drivers for each Apostle Model sector. Use filters within Comment Analyzer to hear suggestions for improvement by sector. Use with Trendlines to see if performance along key dimensions has recently changed.
   
   Consider using Action Alerts™ to immediately notify the right team members, and Action Management™ to open and assign cases, when customers fall below acceptable Loyalist thresholds. Here are some additional actions to consider:
   
   
   • Near-Apostles often represent the greatest opportunity, as the investment required to move them into the ranks of the Apostles is often minimal. If so, make those investments, communicate that actions were taken, and confirm that those investments and actions had an impact.
   
   
   • For B2B businesses with a manageably small number of customers, call Subversives and attempt to address their specific needs and issues. For B2C and other businesses with large numbers of customers, conduct focus groups of a representative sample of customers in the Subversive sector to gain insights into how best to address their needs.
   
   
   • Understand the requirements of Hostages and seek to raise their satisfaction levels. Companies that offer high-priced solutions, such as CRM vendors, will retain a high percent of their customers, but may find that their ability to expand across the enterprise will be limited if their customers’ needs are not met.


4. Expand it to include incentives and employee satisfaction.
   Make the Apostle Model an integral part of your employee incentive and corporate investment programs. This demonstrates to customers and employees that your actions match your words. Studies confirm that employee engagement fosters happy, loyal customers. Of course, not every employee interacts with customers, but when everyone knows your satisfaction and loyalty scores, the customer experience stays in sharp focus company-wide.

The Apostle Model and Overall Performance Indicators

In addition to providing guidance on managing individual customers and markets, the Apostle Model provides two key overall performance indicators:

• Percentage of customers who are Loyalists
• Percentage of customers who are Apostles

Other examples of overall performance indicators are customer loyalty indices (CLI) and net promoter score (NPS). A CLI is a weighted or unweighted average of multiple items, such as overall satisfaction, likelihood-of-repurchase, and willingness-to-recommend. Percentage of Loyalists is similarly a multi-item indicator, based on a combination of satisfaction and loyalty.

In contrast, NPS is based on a single question. It is the top-2 box (9 or 10) percentage minus bottom-6 box (1 through 6) percentage for willingness-to-recommend on a 10-point scale. In B2B environments, with long purchase cycles and high costs of switching, we find that overall satisfaction and likelihood of re-purchase tend to be better predictors of business performance than willingness-to-recommend. Also, multi-item indices offer greater reliability and validity for a given sample size than single measures alone.

The Apostle Model and overall performance indicators together are only part of the total set of analytics that a comprehensive customer feedback system provides. Analytics should also help you prioritize areas of improvement by segment of your business. Key-driver charts (quadrant charts) do that. And customer feedback systems should help you more effectively reward, coach and recognize individuals and teams. Action Alerts, Mean Comparisons, and cross-tabs with significance testing among other analytics help do that.

In Summary…

The Apostle Model is especially valuable because it measures both satisfaction and loyalty, provides a robust method of understanding and segmenting customers, and helps you take action on a customer-by-customer (B2B) or market-by-market (B2C) basis. Most importantly, the Apostle Model provides advance warning of a customer’s dissatisfaction, so you can take steps to preserve the relationship before it’s too late.

CustomerSat Professional Services experience in survey design, statistical analysis and results interpretation is based on thousands of feedback programs and hundreds of millions of customer responses. Our consultants work closely with each client to design and implement the right Apostle Model approach for you, and determine which overall performance indicators are most effective for your business. We further help you refine Model and indicators as customer feedback is collected, product and service offerings evolve, and your business cycle and marketplace change.