APPLE, AMAZON LEAD THEIR INDUSTRY IN WORD-OF-MOUTH AS MEASURED BY NET PROMOTER SCORE, BUT FACEBOOK NPS CRASHES

As marketers know, word of mouth can make or break a brand. But which brands are consumers most likely to back, as well as bash? 

In the category of online search and information Web sites, Google remains top dog, according to new research from customer experience consultancy Satmetrix. The search giant earned a Net Promoter Score (NPS) -- which is based on customers’ likelihood to recommend products or services -- of 56%.

Satmetrix Net Promoter Score by Industry (Click Image To Enlarge)

NPS is calculated as the percentage of customers who are promoters, rating the company 9 or 10 on a 0 to 10 point scale, minus the percentage who are detractors, rating 6 or lower.) 

Facebook, meanwhile, lost 21 points compared to last year’s benchmark -- dropping to an NPS of 31%.

Among online shopping Web sites, Amazon.com delivered again this year with an NPS of 76% -- placing it second among all brands profiled in the study, just behind USAA’s direct banking operation.

The Satmetrix Net Promoter benchmarks are based on a survey of more than 30,000 U.S. consumers, with ratings for more than 200 brands across 22 industry sectors.

Deborah Eastman, general manager of consulting at Satmetrix. 

“The annual benchmark is an important guidepost for executives to understand which brands are truly winning the loyalty of American consumers.” 

NPS Leaders By Industry

• Retail Banking - Apart from USAA’s direct banking operation, which had an NPS of 83% -- few banking brands are held in high regard by consumers. Indeed, seven banks had more detractors than promoters, with the Wachovia brand -- acquired in 2009 by Wells Fargo -- trailing the list with an NPS of negative 15%.
• Technology - In the area of technology, Apple’s loyalty performance matched its financial performance; it once again led in the computer hardware sector with an NPS of 71%. The company also performed well for its consumer software applications, scoring an NPS of 68%.
• Drug & Pharmaceuticals - In the drug store and pharmacy sector, Walmart Pharmacy led with an NPS of 40%, while home improvement chain Lowe’s led among hardware and home supply retailers at 54%.
• Specialty Groceries - Specialty grocers earned some of the highest Net Promoter Scores in the overall study, with Trader Joe’s and Wegmans tied at 73% in the grocery and supermarkets sector.
• Major Retailers - Among major department, wholesale and specialty retailers, Costco took top honors again this year with an NPS of 71%. New additions Belk and Nordstrom also did well, both earning an NPS of 66%. Echoing its financial woes, Sears trailed among department stores with an NPS of 35%.
• Passenger Airlines - For airlines, Virgin America captured the top spot with an NPS of 66%, followed closely by last year’s winner, JetBlue Airways, at 64%. American Airlines trailed the sector at negative 5%. 
• Hotels - In the hotel sector, Marriott’s 56% score and Hilton’s 55% were more than 60 points ahead of sector laggard Motel 6. 
• Travel Websites - Among the travel Web sites, only TripAdvisor showed a significant differential in its experience -- benefitting from its unique hub of consumer reviews combined with travel booking functions to garner an NPS of 33%, according to Satmetrix.

COMMENTARY:    Amazon's built-in product review feature is one of the keys to ts WOM success.   I am a long-time Amazon customer, and rely heavily on Amazon's product reviews before making a purchase decision.  I have a feeling that a lot of people use those reviews as well, and if they have something positive or negative to say about a product, will more than likely use that feature, as I have numerous times.  

Facebook on the other hand, should be the WOM king, but it is doing it all wrong. It cannot depend solely on the LIKE button to create WOM.  If it had its druthers, Zuck and his hackers should build a bonafide product review feature into that LIKE button.  WOM is the best form of FREE advertising.  Nothing better than to have your customers speak positively about your product. This would be a great way for Facebook to create real value for its brands through WOM.  If I were Facebook, I would give users the option to share their LIKE throughout the Facebook social graph, so that a LIKE with an associated product review could be shared with everyone on Facebook, not just those in my social graph.     

So how does a brand go about determining its Net Promoter Score?  

NPS is based on the fundamental perspective that every company's customers can be divided into three categories:

Promoters Passives, and Detractors. By asking one simple question — How likely is it that you would recommend [Company X] to a friend or colleague? — you can track these groups and get a clear measure of your company's performance through its customers' eyes. Customers respond on a 0-to-10 point rating scale and are categorized as follows:

• Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
• Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
• Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To calculate your company's Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors.  The NPS score is calculated thusly:

Courtesy of an article dated March 14, 2012 appearing in MediaPost Publications Online Media Daily and an article appearing in Net Promoter