How to make money in social media? Solve real problems, don’t create imagined benefits Retain customers, sell them more, keep them longer Co-innovate, develop better products and services Create promoters of your brand Encourage and enable promoters to advocate for you Word of mouth is alluring but elusive
Advertising goes into cardiac arrest “The problem is not the medium, the problem is the message, and the fact that it is not trusted, not wanted, and not needed,” Prof. Eric Clemons, Wharton, March 2009 “…every business needs revenues—and advertising, it transpires, is not going to provide enough” The Economist, March 2009
Word of Mouth impacts buying behaviors in both B2B and B2C
80% of customers trust WOM more than any other source of information (Forrester Research)
Word of mouth is 9X as effective as advertising in converting unfavorable or neutral dispositions into positive attitudes. (Day)
More than 90% of customers consider WOM as the best source of ideas and info about products and services (McKinsey & Co )
Source: CMO Council Profitability from Customer Affinity Report 2007
7 Business leaders in all industries are adopting Net Promoter
More than a score…
NPS is Word of Mouth capacity Capacity (economics), the point of production at which a firm or industry's average (or "per-unit") costs begin to rise, usually because some factor is fixed (often capital or land).
Incidence of positive referrals increases as Promoters increase Proportion of Customers Positively Referring by Proportion of Promoters
So how can Web 2.0 be applied to create promoters?
Reciprocity drives NPS
Intuit Consumer Tax Group Inner Circle Gather Insights to Drive Immediate Change and Increase Customer Loyalty Objective: Create community members for ongoing product feedback Approach: Theme-based approach to gather feedback by product line Net Promoter driven product feedback Results:
17,000 community members
Increased NPS by 5 points in 1 year
A&E Insiders Build Brand Loyalty, Increase Viewership and Activate WOM Objective: Create a community for ongoing feedback and increased WOM Approach: Targeted 325,000 AE TV community to provide feedback and rank favorite shows Identify Super Advocates to generate WOM Results:
65,000 Insider community members
Insider influence is 3X greater than TV Community
87% would recommend A&E
43% watch more shows
11% increase in satisfaction scores
WOM reach of 1.5 million
Creating Loyal Customers with the World’s Leading Companies firstname.lastname@example.org www.satmetrix.com www.netpromoter.com Satmetrix and the Satmetrix logo are registered trademarks of Satmetrix Systems, Inc. Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.