Transcript of "How do Amazon, Apple and O2 create young fans?"
NPS: A system to create young fans ® MOBILEYOUTH youth marketing mobile culture since 2001 By Graham Brown mobileYouth http://www.mobileYouth.org“When you run a £5 billion company” explains Guy Laurence, “you can’t avoid the numbers.”As Vodafone’s UK CEO, Laurence has all the numbers he needs; 45 terrabytes of data pass through thenetwork every day detailing everything from the contents of your last text to the location you sent itfrom. Success as the network’s CEO won’t be based on access to all this “big data” but on his ability touse only what counts.Of the thousands of potential metrics that Vodafone could use, Laurence focuses only on 5: The first 4are obvious - the KPIs analysts and CEOs have focused on for years. The fifth, however, is anewcomer - Net Promoter Score.NPS sits on the CEO’s top table because it’s easy to implement but this ease of use can be a double-edged sword. Used incorrectly, NPS can wreak havoc on the best brands. In this era of big data, mobilebrands need to tread carefully.In this article I discuss how mobile brands need to use NPS effectively by moving it from a “score” to a“system”. Not using NPS at all is better than using it ineffectively.NPS Use and AbuseNet Promoter Score is one of a stable of Earned Media Indexes (EMIs) that tracks how much peoplewill recommend your brand to a friend. At mobileYouth we use a mobile-specific variant tailored toyouth called the SMART index.Most mobile brands use NPS ineffectively, using it to measure and drive customer satisfaction (the“customer survey 2.0”). This abuse of the metric will eventually alienate the next generation ofcustomers because, in a saturated market of educated customers, the brands youth “like” will lose outto those they “love”.Our research shows the brands with strongest youth support (e.g. Apple, Amazon, O2) use EMIsdifferently. These brands drive brand “love” through Fanspotting - using data to identify and engage
the influencers.The New Rules of Influence The new landscape for youth lines of influenceThe logic of using EMIs is simple; 62% of youth buy handsets based on what their friends say not whatthe brand says. Engaging influencers (earned media) is more effective than clever, creative advertisingcampaigns (paid media).When we recruit youth advocates for our offline social research networks we ask them to draw theirown influence map. The image above is from a male student in India called Abhirup. Hes unlike youraverage customer because hes a key influencer - someone with a history of influencing others to
switch network and try new handsets. Across the 65 markets studied we found a clear distinctionbetween influencers and followers; influencers are 20-100x more influential than your averagecustomer. Not all customers are the same.With these influencers on your side, marketing dollars stretch further meaning higher operatingmargins. Influence allows brands to reinvest profits into R&D and customer insights. Influence meansprofit.Category leaders have the highest EMI scores. Apple is 33 points (out of 100) above the handsetmarket average. Our SMART survey showed that Apple and Blackberry consistently outperformedincumbent rivals. O2 in the UK leads the mobile operator category by 24 points. Amazon is 27 pointsabove all other online retailers. Why “Tracking” NPS isn’t enoughTracking EMIs and using EMIs are very different.Laurence states that executive insight is the ability to triangulate 3 factors: 1) understanding newtechnology trends 2) public reaction to service and 3) “taking a punt”. The “taking a punt” discerns thelowly knowledge worker from his more sought-after cousin - the insight worker. Companies payknowledge workers to tell them if their NPS has improved since last quarter. Insight means using onlywhat counts, understanding how to use EMIs to drive strategy and this means developing a system. Using Earned Media Indexes as a Score to Measure Customer SatisfactionMost mobile companies use NPS as a knowledge tool as in the diagram above. NPS gauges customersatisfaction. NPS is a score. Tracking NPS helps companies stay on top of the market pulse byvisualizing how many customers are on the left or right of the red line.Measuring customer satisfaction is ineffective for two reasons:1) As standalone gauge of customer satisfaction NPS is a vanity metric. If youth “like” or are“satisfied” with your brand, you might as well be invisible.2) NPS needs to move from historical reporting of fact to forward predictive insight. EMIs aren’tdesigned as trackers but to identify lines of influence. In the youth mobile market, brands live and dieby influence. What mobile companies need to do is identify the people who already “love” the brandand support these change agents. This systemization of research and marketing is called Fanspotting.We outline Fanspotting in the diagram below.
Fanspotting: From Vanity Score to Marketing System Using Earned Media Indexes as a System to Identify and Activate FansIn the diagram above we highlight how mobile companies can use NPS to identify and activate fans.Ron Johnson, idea spark behind the Apple Retail Store and hardcore advocate of EMIs, states NPSshould be used as a system to focus on people not a score to measure markets. Johnson calls this thedifference between a “Net Promoter Score” and a “Net Promoter System”.Apple Retail’s “net promoter system” uses EMIs to identify the fans Apple needs to be engage. Metricsdon’t measure satisfaction, they identify where the market hotspots are and deliver a profile of thesefans. When we first ran the SMART index in 2009 we found Apple scored behind Nokia on “like”(everyone liked and trusted Nokia) but led on “love”. Apple may not have had the awareness of Nokiabut it had clearly defined hotspots to work with. Apple’s strategy has paid off. By not using EMIs toimprove customer satisfaction it has nurtured a specific group of fans that have now influenced the restof the market. Key to a successful Fanspotting system is rapid visualization of data as in our mobileYouth brand heat map
Every Brand has FansThis is not just about Apple. In our SMART survey we found mobile handsets have change agentsspecific to their brand and market. The mobileYouth Brand Heatmap helped mobile brands visualizestep one of their youth strategy - i.e. answering the question “where do we start?” Blackberry in SouthAfrica, for example, needs to use EMIs to engage the most vocal and active black females aged 20-25yrs. Blackberry can identify which of the 3 groups of youth change agents already “love” the brand andconcentrate their marketing budgets accordingly.Every mobile brand has fans, they simply need to use EMIs to connect the pipes - from consumerinsights to marketing activity. By turning “scores” into “systems”, consumer insights can deliver amarketing rationale to the brand managers that states “We need to focus on X”.SummaryIf you don’t know who the fans that love you are, you only have satisfied customers.