In the column, "Social Media Metrics," I talked about some basic metrics that can help you get a quantitative handle on social media-based marketing efforts. Here, I'd like to add one more metric to the mix that's fundamental to the way the social media works.
In 2005, at about the same time I was building a social media practice, I had the opportunity to interview Fred Reichheld about his book, "The Ultimate Question." Fred makes the case that there's one question, that if asked correctly and tracked over time, can guide your business to long-term success. That question is: "Would you recommend me?" That question is at the heart of why social media works on the social Web in the way that it does. Simply put, the conversations that occur on the social Web --and in particular those that reference a brand, product, or service -- are driven by customer experiences, positive or negative, that are talk-worthy. Through this single question, Fred has advanced the Net Promoter Score, which provides a quantitative insight into who's likely to talk and whether what they say will help or hurt you.
Why is the question, "would you recommend me," so important? Consider the traditional satisfaction survey, using a 10-point scale and asking people how satisfied they are with your product or service. Simple enough, right? Suppose three out 10 said they were "very satisfied," rating their satisfaction as a 9 out of 10 or 10 out of 10. Now suppose five more were simply "satisfied," providing ratings of six up to nine. Further suppose the other two out of 10 were "not satisfied" and gave you a rating of five or below.
The typical analysis would conclude that 80 percent of your customers were satisfied. That's pretty good. It's certainly a commanding majority. The problem is two fold. First, the CMO, COO, and CEO are all potentially thinking, "Great, we're doing fine on satisfaction and that's important the way people talk on the Web these days." However, that means it's harder for you to make changes aimed at improving the customer experience. After all, why fix something that isn't evidently broken. That raises the second issue: by concluding that 80 percent are satisfied, key decision makers have been blinded to what may well be happening right now on the social Web, the place where more and more of the validation of various marketing claims is taking place.
Compare this with the Net Promoter Score, and the idea of "recommendation" versus "satisfaction." Recommendation is clearly the stronger of the two: I like lots of things, am generally satisfied with what I buy, yet recommend relatively few things. The book, " The Human Fabric," written by my friend and colleague Bijoy Goswami, discusses mavens (people like me), evangelists, and relaters. For mavens and evangelists, recommendations are part of the currency in which we trade. A recommendation from me comes only after a good amount of due diligence. I'm hardly unique in that respect. The Net Promoter Score gets right at this: "Would you recommend me?"
Consider our prior example: three out 10 would recommend your product or service. These are your promoters. Five out of 10 are neutral; not only are they are unlikely to give a recommendation, if they do it's probably going to be something like "Yah, it's OK." That's a less-than-ringing endorsement and is unlikely to sell anything. The remaining two would actually give a negative recommendation. These are your detractors.
The Net Promoter Score, as the name implies, is based on the difference between promoters and detractors. The more your promoters outnumber detractors, the better you'll do on the social Web. In the example, the promoters totaled 30 percent while detractors totaled 20 percent, meaning supporters outnumber detractors by 10 percentage points. That's considered an OK score -- at least it's positive, but there's considerable room for improvement. Knowing this, a marketer can engage product development, customer service, or other appropriate departments to bring about changes that increase promoters or decrease detractors. Doing either -- or both -- will improve the Net Promoter Score. On the Net Promoter scale, high scorers include companies such as Costco (79 percent), and Harley-Davidson (81 percent), a firm whose customers regularly tattoo the brand onto their bodies.
Look at the difference between this type of analysis and an ordinary satisfaction survey that finds 80 percent are satisfied and 20 percent aren't. OK, so maybe you can do something for the 20 percent, but maybe it will get prioritized behind some other project you're working on. In the case of the Net Promoter Score, you know that your promoters outnumber your detractors -- and that much is good. But, you also know that in any open conversation, it's likely two in ten of those present will talk negatively about you. Before you embark on a social media campaign, you really want to do something about that. You've got the quantitative yardstick that you need, too.
In fact, you've got the ability to manage the conversations that occur on the social Web! How so? On the social Web, conversations of direct interest to marketers occur as the result of an experience with a brand, product, or service. Social Vibe President Joe Marchese, whose firm connects consumers, brands, and charities, puts it his way: "The challenge with traditional advertising is creating an effective asset. The challenge with social media is getting your name integrated into an effective asset that already exists."
By taking both positive and negative recommendations and combining them with internal data you've already got, you can reduce the number of detractors while increasing the number of promoters. To be absolutely sure, you cannot control what people say. But, you can control what they experience. Unlike traditional advertising, where you directly manage the message, tuning it for receptivity, on the social Web you manage the experience, tuning it to generate conversations that will amplify your overall marketing effort. In other words, on the social Web, you manage the inputs to the conversation -- the experiences. The participants, through social media and the content they generate, manage the outputs and the conversations that ultimately occur.
The Net Promoter Score provides direct visibility into this process. Bazaarvoice has built the tool into its platform, as have a number of savvy marketers. Consider adding it to yours. I highly recommend Fred's book, "The Ultimate Question," and the use of the Net Promoter Score when working with social media.
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Dave is the VP of social strategy at Lithium. Based in Austin, Dave is also the author of best-selling "Social Media Marketing: An Hour a Day," as well as "Social Media Marketing: The Next Generation of Business Engagement." Dave is a regular columnist for ClickZ, a frequent keynoter, and leads social technology and measurement workshops with the American Marketing Association as well as Social Media Executive Seminars, a C-level business training provider.
Dave has worked in social technology consulting and development around the world: with India's Publicis|2020media and its clients including the Bengaluru International Airport, Intel, Dell, United Brands, and Pepsico and with Austin's FG SQUARED and GSD&M| IdeaCity and clients including PGi, Southwest Airlines, AARP, Wal-Mart, and the PGA TOUR. Dave serves on the advisory boards for social technology startups including Palo Alto-based Friend2Friend and Mountain View-based Netbase and iGoals.
Prior, Dave was a co-founder of social customer care technology provider Social Dynamx, a product manager with Progressive Insurance, and a systems analyst with NASA| Jet Propulsion Labs. Dave co-founded Digital Voodoo, a web technology consultancy, in 1994. Dave holds a BS in physics and mathematics from the State University of New York/ Brockport and has served on the Advisory Board for ad:tech and the Measurement and Metrics Council with WOMMA.
December 12, 2013
1:00pm ET / 10:00am PT