Affinitive’s Social Media Playground

Two recent articles have caught my attention that attempt to challenge some of the fundamentals of word of mouth marketing theory and metrics:

The first, Is the Tipping Point Toast, discusses challenges being made to the "influencer" model made famous in WOM101 books The Tipping Point and The Influentials. In it, Duncan Watts, a researcher at Yahoo! with a background in network theory (who has conducted a series of experiments, both physical and computer-based, to model the spread of "trends") argues that highly connected people are not crucial social hubs and a trend's success is completely random.

"It just doesn't work... A rare bunch of of cool people just don't have that power. And when you test the way marketers say the world works, it falls apart. There's no *there* there... If society is ready to embrace a trend, almost any one can start one - and if it isn't, then almost no one can."

The second, Customer advocacy metrics: the NPS theory in practice (published in Admap magazine), provides a critique of Net Promoter Score (NPS) (made famous in the book The Ultimate Question)and proposes ways the metric can be improved. NPS...

"is based on the question ‘Would you recommend [Brand/ Company X] to a friend or colleague’, answered on a scale between 0 (not at all likely) and 10 (extremely likely). The actual score is computed by subtracting the percentage of detractors (those giving 0–6 answers) from promoters (9–10s). The middle section, between 7 and 8, is so called passives."

The article argues that while NPS tries to be a "one size fits all" metric, marketers need to understand its advantages and limitations for different types of uses, and that is it better suited as a loyalty metric than an indicator of future business growth. Among the critiques:

"Critics, however, do not like the fact that useful scaled information is later lost in conversion. Are people giving a 0 rating equally detracting as those with a 6? Intuitively: no. Similarly, once percentages are calculated, is an NPS of 40, consisting of 70% promoters and 30% detractors, the same as the same NPS consisting of 40% promoters and 0% detractors?"

So, where does this leave us? Regardless of which side of the fence you sit on regarding these issues, it's great to see that people are challenging WOM-related theories and metrics (I personally find flaws in some of the methodologies used in some of Watts' experiments and feel that NPS isn't intended to be a hard, de-facto research metric versus a rallying cry for employees at organizations looking to make a commitment to customer satisfaction).

To be honest, there is still a lot of "hand-waving" that occurs in the industry in terms of metrics, and as our clients increasingly put us to the task of proving the value of our programs, it's becoming even more important for us to be able to support and back up our findings.

Related links:
Is the Tipping Point Toast? (Fast Company)
Customer advocacy metrics: the NPS theory in practice (Admap)
The Tipping Point (via Amazon)
The Influentials (via Amazon)
The Ultimate Question (via Amazon)