That year, a fellow by the name of Fred Reichheld of Bain & Company and Satmetrix introduced the “Net Promoter Score.” Reichheld discovered that the real test of customer loyalty was whether customers would recommend a product or service to a friend.
By asking customers the basic “Would you recommend?” question and asking them to rank their score from 0 to 10, the customers can be categorized as promoters, passives, or detractors. Reichheld and Satmetrix uncovered a clear connection between advocacy and revenue growth.
As compelling and effective as the NPS is at capturing the intention of advocacy, it was conceived well in advance of the social web. We now have the ability to also ask and answer so much more, including these:
- Did you recommend?
- Where, how, and why did you recommend?
- Were those recommendations from someone of influence in the category?
- How did others recommend?
- How do these recommendations compare to competitors and the industry?
- Did those recommendations make an impact? If so, where and how?
The implications of these questions are profound. If brands know where, how, and why recommendations are driven in their category, they can shape their products, offerings, and marketing messages to become the most recommended brands in their category.
Brewing up recommendations
Buying coffee to drink on the go is an American tradition and a $20 billion per year industry with more than 75 percent of U.S. adults consuming coffee and more than a million conversations about the category occurring online every month.
Not surprisingly, the Recommendation Index found that Starbucks was the most talked-about coffee chain online. But despite being the leader in online conversation volume, the brand was recommended in only about 1 in 200 conversations – while Caribou Coffee earned a recommendation once in every 20 conversations.
Dunkin’ Donuts and McDonald’s followed Caribou in the rankings of the top 10 largest coffeehouse chains operating in the United States.
The Recommendation Index found that top themes associated with positive coffeehouse chain recommendations included product quality and freshness, brand loyalty, and brew consistency.
Primary drivers of negative word of mouth pointed to poor product quality, unskilled baristas, and brand detractors – all of which further illustrate the value consumers place on great taste and service when choosing where to buy their coffee.
Filtering for success
With these insights, what would you do if you were the marketing leaders of Caribou Coffee?
Chances are you’d keep doing a lot of what you have been doing, while also dialing up communications around those elements people love and talk about (“Our coffee is always fresh,” “We hire skilled and friendly baristas,” and “We ensure product consistency at all costs”).
You would also proactively ensure the marketers keep minimizing attributes known to drive negative recommendations (making sure coffee is never burned; ensuring that more pronounced flavors are clearly marked and communicated to avoid surprises; and increasing training and monitoring to ensure barista levels of skill and friendliness).
And if you are Starbucks? You’d have to decide if being recommended is important to you as a brand – and then you’d want to experiment with making the changes that will help evolve the high volume of conversations about your brand into a higher degree of recommendations.
Or at a minimum, you’d make sure you are proactively addressing the high number of negative recommendations by helping consumers better understand your product attributes so they don’t see them as negatives.
The best part? Marketers don’t have to wait to conduct focus groups or ask consumers to fill out surveys. Nearly real-time listening through social channels will let you know if you are succeeding or not in evolving your business into a social business and your brand into one that is highly recommended.
This excerpt, adapted for Sparksheet, is from Highly Recommended by Paul M. Rand. Copyright © 2013 by McGraw-Hill.