12
Apr
10

The net promoters era

What are net promoters? Consumers who rate products on the internet?  Mommy Bloggers? People who Tweets about brands on Twitter? Fans on Facebook? Hold that thought.

For students of relationship marketing and CRM, net promoters are the driving force of Fred Reichheld’s book, The Ultimate Question. Fred studied and surveyed the customers of 100’s of companies and came to a singular conclusion: The most admired and profitable companies are the ones with the greatest percentage of net promoters – people who enthusiastically answer in the affirmative the question, “How likely is it that you would recommend this company to a friend or colleague?”

Fred developed the Net Promoter Score (NPS).  The NPS is the percentage of people who are “promoters” of a company minus the   “passives” and “detractors” (NPS = P – D).  Reichheld’s work is known for its statistical significance and high correlation with business success.  In 2006, the companies with the highest NPS were:

  • USAA (82%)
  • HomeBanc (81%)
  • Harley-Davidson (81%)
  • Costco (79%)
  • Amazon.com (73%)
  • Chick-fil-A (72%)
  • eBay (71%)

By 2008, Charlene Li and Josh Bernoff, in Groundswell, delivered research showing 80% of people rate and review products favorably on the internet and their social networks. If companies with an NPS of 80% rank among the highest in Reichheld’s work, Li and Bernoff’s research is particularly good news for businesses and brands.

It means companies that use interactive ratings are reviews are likely to have a higher NPS, be more admired and have greater profitability. Li and Bernoff’s research also showed:

  • 76% of customers use online reviews to make purchases
  • 96% of sites that have them say they are an effective merchandising tactic
  • Only 25% of e-commerce sites have them now

So, from Reichheld’s, Li’s and Bernoff’s viewpoints, we’re in the “net promoters era.”  If your company isn’t taking advantage of it, shouldn’t it be?

Advertisements

0 Responses to “The net promoters era”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


April 2010
S M T W T F S
« Mar   May »
 123
45678910
11121314151617
18192021222324
252627282930  

BarnRaisers

Share this blog

Share |

%d bloggers like this: