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BizReport : Social Marketing : July 16, 2013

ForeSee: Detractors may not have as much influence

The big takeaway from new data out today from ForeSee: the detractor portion of Net Promoter Scores may be overestimated. As in very overestimated. According to the data brand detractors in categories may be overestimated more than 500%.

by Kristina Knight

Net Promoter Scores (NPS) are based on the answer to a single question - would the customer recommend the brand. From there, scores are given which label some responders as 'detractors'. Today's Word of Mouth Index (WoMI) from ForeSee indicates that those 'detractor' labels may be not only inaccurate descriptors of the shoppers but overly inflated, causing brands to spend thousands of dollars where they don't need to. The findings include:

• NPS detractors are overestimated by 527% for financial services
• NPS detractors are overestimated by 264% for computers/electronics
• NPS detractors are overestimated by 222% for retail

"NPS' overstatement of detractors, as shown by our research, is truly eye-opening - impelling brands to seriously reevaluate their tactics and spending around converting supposed detractors," said Larry Freed, CEO, Foresee. "With WoMI, we provide an easy way for companies to accurately measure customer word-of-mouth, knowing they'll be making business decisions based on precise, actionable data. Given today's more empowered consumers - who are able to broadcast their opinions from social media megaphones and switch brands instantly with the click of a mouse or the swipe of a mobile screen - it's vital that companies use a loyalty metric that keeps up with the evolving world, by factoring in both positive and negative word-of-mouth."

The ForeSee index focuses on the overall experience, asking customer more than one question to determine if that shopper is an influencer, detractor or falls somewhere in the middle. This gives the brand a more holistic view into how their campaigns are faring, what the reaction of customers is and how to best use this information to increase the ROI of given campaigns.

Image via Shutterstock

Tags: ForeSee, social advertising tips, social marketing, WOM, WOMI, word of mouth

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