8.05.2010

Trends with Traction: Meaningful "social" measurement with Net Promoter Score

If you're a CMO, you might feel like many of the business metrics you're chasing around in social media seem futile. The tactical click-throughs and engagements on marketing programs make sense, but the aggregate business ones don't quite make sense under close inspection. Volume of brand mentions kind of makes sense if you can measure if the mentions are positive, but take a close look at sentiment analysis tools and you'll notice they don't work very well.

Of course, you must measure something. But what?

A growing number of companies are maturing their social media measurement programs by shifting their focus to optimizing their Net Promoter Score. I'm seeing this more and more in the marketplace and I think it's a damn good idea.

What is Net Promoter Score?
There's been a zillion blog posts and a great Wikipedia entry on exactly how NPS works, so I won't go into detail of that here. It is a concept that was introduced first in Harvard Business Review, then in a book called The Ultimate Question by Frederick Recihheld. Essentially, you take a survey of your customers, add up the people (promoters) who are most likely to recommend you to others, subtract the people who are less than enthused with your brand (detractors) and you've got your Net Promoter Score.

Why NPS is a vital metric.
According to Forrester Research, over 83% of purchase decisions today are influenced by word-of-mouth. That means traditional "top-down" approaches to marketing their wares through advertising are simply not enough. Marketers today have no choice but to be concerned with creating an entire brand experience that delights their customers.

NPS shows you if you're doing that. Counting tweets doesn't.

Too simple to be valuable?
No, it's not. Not only does its simplicity make it relatively easy to measure accurately, it also makes it understandable to everyone on your team, both internally and externally. And because they can understand it, they can make it their mission in life to make it better.

Contrast that to most brand valuation measures. They're based on some kooky formula. They're abstract. They're not tangible to your people. They don't deliver accountability.

And if logic isn't enough to cover your arse, it's being used right now by brands like GE, American Express and Intuit.

How it's impacting agency/client relationships.
In recent months, my agency is getting more and more requests from clients to help optimize the brand experience for their products. One is a Fortune 500 client with an online software as their product. They came to us with a challenge to increase their conversion rates—and to increase their Net Promoter Score. There was a different cast of characters in the room when we presented our approach to their problem: alongside the Marketing Director was a Product Manager who had never worked with an agency before.

Increasing NPS is a new area where agencies experienced in both interaction design and in unearthing the kind off insights that fuel great advertising can provide great value to their clients. But NPS is not just something for your agency to enhance from the outside. It's a measure that can get your whole organization on a path to creating happy customers. And that's important because you don't control the conversation anymore—your customers do.

Make sure they say nice things.

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