Social Media Metrics - by Dave Evans
If you could only ask your customer one question * and your business might succeed or fail based on the answer * wouldn’t you want to ask that question? The Net Promoter® Score, developed by Fred Reichheld, is built around one question: “Would you recommend me?” This question is central to success as social media–the tools and services that customers use to talk with each other–takes hold.
In this post, Dave takes you through The Net Promoter Score, one of the fundamental metrics covered in his forthcoming book ”Social Media in an Hour a Day (Published by Wiley/Sybex)” due out July of 2008.
Measuring customer satisfaction is nothing new. But, unlike “Are you satisfied” or “would you buy from me again?” asking “Would you recommend me?” connects straight into the dynamics that power social media. In a typical satisfaction survey–and high satisfaction is clearly important on the Social Web–you measure just that, satisfaction. If 5 out of ten customers said they were “satisfied” and 3 out of ten said they were “very satisfied,” you’d conclude that 8 out ten (3 + 5)were satisfied or better.
The problem with this type of analysis is two-fold. First, it wrongly assures everyone—including the CMO, CEO, COO—that everything is fine. 80% sounds like a lot, and in truth it is. It’s “almost everyone.” The problem is that on the Social Web all of your customers are present. “80% satisfied or better” is not “fine” if the other 20% are walking around actively telling people your product or service could use some help. The typical satisfaction survey and analysis can conveniently hide this. What do you suppose will happen in an online forum where all of your customers are talking about you? Do you think these 20% will stay hidden? They won’t.
The Net Promoter Score is calculated by subtracting the share of active detractors from active promoters. In our example, we had 30% active promoters (“very satisfied”) and 20% less than satisfied. The difference is a positive 10%. It means we have — barely — more promoters than detractors.
The Net Promoter Score helps you in three ways. First, it correctly identifies the share customers will stand up and recommend you. On a scale where “10” means “I’d recommend you without hesitation,” a score of 7 or 8 means they think you’re OK but won’t go out of their way to recommend you. A score of 9 or 10 means they will. When you are preparing for and managing social campaigns, you have to know what kind of active support you’ve got. Second, the Net Promoter Score tells you what share of your customer base is going to give a negative recommendation. Again, you have to have this information before you start using social media–you need to know the bad right along with the good so that you can be prepared for it, and even better, do something about it.
In our simple survey we asked only one question. You’ll likely have more information available to you, including the type of customer, purchase history, demographics, and more. You can use this information to pinpoint issues, which brings us to benefit number three. Using the Net Promoter Score and the methodology Fred has developed you can put a plan into place that reduces the number of detractors while you also work on building the number of promoters. Tracked over time, the Net Promoter Score is an invaluable yardstick for social media practitioners, because it gets directly at the conversations that occur on the Social Web and what drives them.
The Net Promoter Score is fundamental to social media-based marketing. If you’ve got a great product that is delivering a delightful experience, use social components like blogs or video sharing that encourage more talk: use the Social Web as a platform to spread your message. If you’ve got work to do, use tools like support forums to identify and correct issues: use the Social as a learning tool and take the conversation to the COO where you can address the challenges. Either way, put the Net Promoter Score to work, and get more people recommending you.
Net Promoter is a Registered Trademark of Satmetrix Systems, Inc, Bain & Co. and Fred Reichheld.
[…] Lisa Barone wrote an interesting post today onHere’s a quick excerptSocial Media Metrics - by Dave Evans If you could only ask your customer one question * and your business might succeed or fail based on the answer * wouldn’t you want to ask that question? The Net Promoter® Score, developed by Fred Reichheld, is built around one question: “Would you recommend me?” This question is central to success as social media–the tools and services that customers use to talk with each other–takes hold. In this post, Dave takes you through The Net Promoter Score, one […]