The 2011 Netpromoter benchmarks report does say lots of obvious things. But that can be useful when said with numbers. Take this parargraph:
“Businesses are expected to spend $214.3 billion on advertising in 2011, according to SNL Kagan. But only 4 percent of Americans trust advertising the most as an information source when choosing products or services. Instead, the Satmetrix study finds that consumers most trust recommendations from independent sources (83 percent), especially those with whom they have personal relationships. Half of consumers (50 percent) cited personal recommendations from friends, family or colleagues as the most trustworthy source of information. And, approximately four times as many people trusted product test reviews (18 percent) or consumer opinions posted online (15 percent) as compared to advertising.”
So here’s one to discuss with your board colleagues…… the exam question is “What would the business look like if we spent 83/4 times, let’s say 20 times, as much on improving the colleague and customer experience as we do on marketing our brand or product?”
Anyone who has played with business simulators will know that more advertising of a poor performing service or product just leads to a worsening economic cycle – higher acquisition costs, higher cost to serve, low retention. Word of mouth reality outstrips advertising glitz.
And the opposite is true. Businesses like Amazon, Google ,eBay and Skype took off and stay up there without much, if any, advertising support. You can read more about Amazon and Google in our “100 things you can learn from …” series at our website.
