WOM UK ESPRESSO SESSION

Crowd DNA account manager Paul Allen headed along to check out the latest Word Of Mouth UK espresso session, at which Dr Robert East was holding court, assessing the potential for life after NPS when it comes to WOM metrics.

There were some interesting points of note for our burgeoning effectiveness wing as Dr Robert East looked at alternatives to Net Promoter Score (NPS) at the first WOM UK Espresso event of 2010. Since Fred Reichheld introduced the idea of NPS in a 2003 Harvard Business Review article it has quickly become one of the most trusted and widely used measures of customer satisfaction and loyalty.

NPS is calculated using some beguilingly simple maths; customers are asked the question "How likely is it that you would recommend our company to a friend or colleague?” and answers are given on a 0-10 scale. Those giving a score of 0-6 are detractors, 7-8 are passive, and 9-10 are promoters. NPS is the percentage of promoters minus the percentage of detractors.

Companies worldwide have adopted NPS as a measure of brand health and in America it is widely used to predict sales, forecast profits and set pay. However, Dr Robert East, professor of consumer behaviour at Kingston University believes it is a blunt and ineffective tool for measuring word of mouth and that other metrics should be used to predict customer behaviour.

Dr East explored the shortcomings of NPS; it is only measured among customers, it doesn’t take into account negative word of mouth, it doesn’t measure advice received only the potential sentiment of advice given, and it doesn’t assess the impact of any recommendation when it is given.

The proposed solution from Dr East assess both the advice given and received by customers along with whether or not it is positive or negative. Using data available to him from previous studies at Kingston University his investigations have shown variations in customer satisfaction when compared to NPS. He is now on the look out for brands willing to explore his ideas further with larger samples.

Word of mouth is notoriously hard to measure and it is very encouraging to see such rigorous and determined evaluation of its most widely used metrics. At Crowd DNA we are watching the development of new measures of word to mouth closely and are quickly incorporating them into our work on word of mouth and effectiveness, which can be seen in our recent work for the Guardian, Oakley and Global Radio.