By measuring customer loyalty, businesses can choose effective methods to boost customer satisfaction. Use feedback to increase the army of your brand lovers.

World-of-Mouth Power: How Recommendations Affect Attracting New Customers

Client happiness is a key to forming customer loyalty, establishing long-term cooperation and raising financial performance. The Net Promoter Score (NPS) is a customer experience metric used to evaluate the opinion and attitude of consumers towards the company’s products or services by asking “On a 0 to 10 scale, how likely are you to recommend us to your acquaintances?”.

Analytics vendor ForeSee has introduced a new research revealing the next-generation NPS — the “World-of-Mouth Index” (WoMI) that includes the second feedback question measuring probability to recommend against purchasing specific products or against dealing with a specific company.

Marketing Research: the First Aid

Business approach based on constant measuring of Customer Loyalty and Satisfaction Indexes results in creating correct strategies and taking steps in the direction to broaden company’s prosperity.

There is no universal recipe of how to achieve absolute client’s satisfaction as long as every individual is happy in his own unique way. Our agency Scheduling Europe successfully conducts marketing research to assess customer shopping experiences and design a plan that will help to improve your brand’s image through the customers’ eyes. You are welcome to get familiarised with our programmes here.

Effectiveness of World-of-Mouth

According to the Nielsen research, 92% of consumers trust recommendations from friends, family and colleagues more than any marketing promotion. So if you've managed to make a client happy, he is likely to share this experience with his acquaintances providing you with free advertising.

Loyal consumers ready to recommend a brand are the company's promoters. Passives usually give 7-8 points, they are indifferent clients who will not recommend. And customers who are strongly dissatisfied with their experience with a brand are called critics — they leave negative feedback.

The experts say the WoMI has more objective criteria for dividing customers into critics, neutrals and promoters, which increases the reliability of the assessment results. WoMI is calculated as follows:

WoMI = true Promoters share - true Critics share

By including an additional question to the NPS survey - "How likely is it that you will discourage your acquaintances from dealing with our company?" - the developers of this methodology aim to detect "fake critics" who put 0-6 scores according to the NPS, and put the same scores in the WoMI questionnaire, refusing to discourage other consumers from dealing with a brand. Thus, the Word-of-Mouth index adds a new category of clients who are in the middle between the critics and neutrals, not recommending and also not discouraging others from interacting with a company or product.

WoMI Pros

With an additional question, the WoMI index considers both the Promoters’ and the Critics’ opinion, as one drop of poison infects the whole tun of wine. Having recognised the company’s ‘enemies’, business leaders will be able to eliminate the weak points.

WoMI Cons

Some marketing specialists admit that true Promoters do not always recommend, and true Critics are not always being disapprobative. Nevertheless, the analysis of reviews has shown that consumers who put 7 or higher actually recommended the company or product to their acquaintances. So most experts are inclined to believe that this metric is more accurate than the NPS, and it promotes better understanding of customers.

Final Words

Usually consumers prefer to find out someone else's opinion about some products and companies before gaining their first experience of interaction with a brand. In the age of the internet and paid reviews, getting honest feedback is very valuable. Therefore, word of mouth is still one of the most reliable and effective ways to promote businesses offering their products and services.

In order to manage customer experience, you need not only to measure the indexes, but also to analyse the factors influencing them. Feel free to contact us, if you need professional assistance in managing the factors to improve the rates, which will result in an effective Customer Experience Management.

Author's Bio: 

Whitney is a creative writer and content strategist from AU Tech.