Net Promoter Score And Social Media Generic

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Net Promoter Score And Social Media Generic

  1. 1. Net Promoter Score and Social Media Footer
  2. 2. Net Promoter: &quot;How likely is it that you would recommend our company to a friend or colleague?&quot; <ul><li>Net Promoter </li></ul><ul><li>Net Promoter is a customer loyalty & satisfaction metric  that defines promoters and detractors. </li></ul><ul><li>It is calculated by asking cu stomers a single question on a 0 to 10 rating scale: &quot;How likely is it that you would recommend our company to a friend or colleague?&quot; . </li></ul><ul><li>Based on their responses, customers can be categorized into one of three groups: Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating). </li></ul><ul><li>Net Promoter Score </li></ul><ul><li>The percentage of Detractors is subtracted from the percentage of Promoters to obtain a Net Promoter score.  </li></ul>Footer
  3. 3. Net Promoter Score indepth <ul><li>Net Promoter score aims at: </li></ul><ul><li>L inking word-of-mouth to growth: influence of positive recommendations </li></ul><ul><li>I ncluding more customers in the feedback process </li></ul><ul><li>P roviding a single, powerful metric </li></ul><ul><li>N et promoter score fails at: </li></ul><ul><li>Identifying which promoters and detractors (sources) matter the most </li></ul><ul><li>What actions you should take </li></ul><ul><li>Identifying the direct correlation between WOM and overall financial results </li></ul><ul><li>Source: Forrester, Net Promoter Scores: Good, but not Enough (February, 2007) </li></ul>Footer
  4. 4. Relation Net Promoter Score and Social Computing <ul><li>The numbers on the next pages explain that social computing can have a positive effect on customer loyalty, customer experience, customer satisfaction, positive recommendations and sales </li></ul><ul><li>Thus we urge to conclude there is a positive correlation between social computing and Net Promoter Score </li></ul>Footer
  5. 5. Derived numbers: Relation social computing and (customer) loyalty Footer <ul><li>Community users remain customers 50% longer than non-community users. (AT&T, 2002). </li></ul><ul><li>Community users spend 54% more than non-community users (EBay, 2006). </li></ul><ul><li>Community users visit nine times more often than non-community users (McKInsey, 2000). </li></ul><ul><li>Community users have four times as many page views as non-community users (McKinsey, 2000). </li></ul><ul><li>56% percent of online community members log in once a day or more (Annenberg, 2007). </li></ul><ul><li>“ [social computing] investments in customer online buying process offer a direct return on investment (ROI) in terms of sales, awareness and customer loyalty .” (Gartner, 2008) </li></ul><ul><li>56% of Social Media users say they feel a stronger connection with and better served by companies when they can interact with them in a social media environment </li></ul><ul><li>77% cite reviews as being useful in making a recent purchase. Ratings & Reviews are the top ranked Content Discovery Tool for driving consumer trust and loyalty (Jupiter Research, 2009) </li></ul><ul><li>Creating a community of advocates drives revenues and growth (Apple INC.) </li></ul>
  6. 6. Derived numbers: Relation social computing and customer satisfaction, -experience and sales <ul><li>Customers report good experiences in forums more than twice as often as they do via calls or mail. (Jupiter, 2006). </li></ul><ul><li>Good customer service experiences boost repurchase probability and long-term loyalty (Forrester, 2008) </li></ul><ul><li>“ Social applications offer a great opportunity for CRM practitioners to improve customer experience and influence the customer, particularly in an economic downturn when companies are trying to keep customers and increase wallet share” (Gartner, 2008) </li></ul><ul><li>“ [social computing] investments in customer online buying process offer a direct return on investment (ROI) in terms of sales, awareness and customer loyalty.” (Gartner, 2008) </li></ul><ul><li>“ The greatest value of online communities is increasing word of mouth (35%), increasing brand awareness (28%), bringing new ideas into the organization faster (24%) and increasing customer loyalty (24%)” (Deloitte / Beeline Labs, 2008) </li></ul>Footer
  7. 7. Derived numbers: Relation social computing and positive recommendations & sales <ul><li>eBags saw sales increase with 30% after allowing user generated reviews </li></ul><ul><li>Wehkamp.nl saw sales increase up to 15% after allowing user generated ratings & reviews and questions & answers. </li></ul><ul><li>Wehkamp.nl saw returned packing decrease up to 10% after allowing user generated ratings & reviews and questions & answers. </li></ul><ul><li>Netshops Inc saw sales increase with 26% after allowing user generated reviews </li></ul><ul><li>word-of-mouth-driven consumers spend 9% more than other online consumers, and they are 44% more likely to think that their credit cards are secure when buying online (Forrester, 2005) </li></ul><ul><li>Estimates have maintained that as much as 80% of all buying decisions are influenced by an individual’s direct recommendation (Kamins, 1997) </li></ul><ul><li>Procter & Gamble’s online community beinggirl.com is four times as effective as TV ads (SocialMediaToday, October 2008) </li></ul><ul><li>J.C Whitney increased sales with 16% for 5 starred items and 10% for 4 starred items.(Twinkle, 2007) </li></ul>Footer
  8. 8. Correlation between word of mouth and Net Promoter Score <ul><li>the more conversations a customer has, the more likely they are to recommend the product. </li></ul><ul><li>Consumers who have more than 6 conversations per month result in a spike in NPS </li></ul><ul><li>Source: socialmediaplayground (October, 2008) </li></ul>Footer
  9. 9. Consumers with good experiences are likely to buy more and switch less Footer

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