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Answering the Ultimate Question For Social Media

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  • Across companies: the relationship holds as more promoters, the more + womPromoters drive PWOM; if you care about your business’ WOM, you need to care about your proportion of Promoterscustomer experience– and loyalty– become a relevant dimension to consider in marketing efforts r = .87Data come from 2008 NP benchmarkData cleaned for inconsistent responses (ex. “I have recommended in the past” AND “number of recommendations = 0”); cut cases above 98th percentile spend; Only business with more than 24 responses included in the analysis.
  • Transcript

    • 1. BSI
      Answeringthe Ultimate QuestionForSocial Media
      Marketing 2.0 Conference, Paris 2009
    • 2. Jointheconversation
      MARKETING 2.0 CONFERENCE
      www.marketing2conference.com
    • 3. Answering the Ultimate Question for Social Media
    • 4. 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
    • 5. 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
    • 6. 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)
      • 7. Word of mouth is 9X as effective as advertising in converting unfavorable or neutral dispositions into positive attitudes. (Day)
      • 8. 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
    • 9. 7
      Business leaders in all industries are adopting Net Promoter
    • 10. More than a score…
    • 11. 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).
    • 12. Word of Mouth is on the rise
      Promoter Referral Rate (Average)
      Promoter Referral Rates By Industry
      +8%
      +11%
      +7%
      14% average
      increase
      +14%
      +6%
      +2%
      +18%
      +24%
      +4%
      +20%
      8% average
      increase
      +15%
      +7%
      +5%
      +8%
      +14%
      +8%
      +13%
      +19%
      Banking
      2006
      2007
      2008
      Cable
      Wireless
      Computer Software
      Computer Hardware
      Brokerage
      Credit Card
      Local / Long-Distance
      ecommerce
      © 2009 Satmetrix Systems, Inc. All rights reserved. Satmetrix and the Satmetrix logo are trademarks of Satmetrix Systems, Inc. Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
    • 13. Referral economics for B2C Wireless Providers
      Economic Impact of Promoter and Detractor WOM for B2C Wireless Providers
      1000
      Each Promoter’s PWOM behavior brings in an additional $639 in revenue.
      +$639
      500
      Promoter
      0
      Detractor
      Customer WOM Value
      -500
      -1000
      Each Detractor’s NWOM behavior is responsible for $1459 in lost revenue.
      -$1459
      -1500
      © 2009 Satmetrix Systems, Inc. All rights reserved. Satmetrix and the Satmetrix logo are trademarks of Satmetrix Systems, Inc. Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.
    • 14. Incidence of positive referrals increases as Promoters increase
      Proportion of Customers Positively Referring by Proportion of Promoters
    • 15. So how can Web 2.0 be applied to create promoters?
    • 16. Reciprocity drives NPS
    • 17. 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
      • 18. 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
      • 19. Insider influence is 3X greater than TV Community
      • 20. 87% would recommend A&E
      • 21. 43% watch more shows
      • 22. 11% increase in satisfaction scores
      • 23. WOM reach of 1.5 million
    • Creating Loyal Customers with the World’s Leading Companies
      richardo@satmetrix.com
      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.

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