November 05, 2008

Net Promoter Score? Try Net Google Score!

Many database marketers are enthusiastic about computing the Net Promoter Score for the brand they work for. The net promoter score adds positive considerations, then subtracts the negative ones, yielding the net total of positives for a brand. For example, if you have 78 customers saying something positive about you, and 22 saying something negative about you, you have a net promoter score of 78 - 22 = 56.

One of the things we could be computing/estimating is a Net Google Score. The Net Google Score simply tallies the sales that we receive due to paid search and natural search, then subtracts the sales that Google takes away from us. The Net Google Score tells us if Google is on our side, or if we are doing a "good job of managing Google".

We do a good job of measuring the positives. We carefully track our paid search results, we know the sales we get due to a good SEO program.

We do almost nothing when it comes to measuring the sales we lose when customers enter Google and are diverted by competing links/offers.

One of the reasons that traditional advertising (catalog marketing, e-mail marketing, television, radio, newspapers) is dying is due to the Net Google Score. Catalogers know this all too well. Over the past five years, catalog customer acquisition performance declined by between five and fifty percent, depending upon the company, in part because of a negative Net Google Score.

The cataloger spends $1,000 trying to acquire customers, with $970 wasted on customers who had no intention of purchasing. This has always been the way customer acquisition worked.

But within the $30 of advertising that are effective, there is a fundamental change that is happening. Half of the $30 result in a customer purchasing from the brands we manage. But the other $30 of advertising drive a customer to the internet, specifically, Google.

Here is where the customer finds a veritable plethora of goodies. Google facilitates the diversion of funds away from the vehicle that drove the advertising, toward offers that better resonate with the customer. Sales are "lost", even though the advertising vehicle is just as effective as it always has been.

You tell me about this from both sides. Catalog executives lament the fact that customers go off into Google, never to return. Online pureplay leaders tell me that the love it when big brands do traditional advertising, because they benefit for "free".

This is where calculation (or much more likely, "estimation") of the Net Google Score becomes so important. If you can quantify that you are a $50,000,000 brand that has a Net Google Score of -$7,000,000, you instantly know that if you can eliminate that gap, you have a $57,000,000 brand that is probably much more profitable.

You also net out the Net Google Score in your matchback programs. Maybe you have a catalog that appears to drive $2,000,000 ... but after matchback, you add in the $750,000 you drove to your website, yielding $2,750,000 of real volume. Now, you consider the volume you drove to your competitors by advertising and driving customers to Google --- discounting the $2,750,000 of true volume by the Net Google Score. Hmmmmmm.

Long term, we have to ask ourselves if it is worth it to execute catalog marketing that results in a negative Net Google Score.

Short term, we need to begin calculating/estimating the Net Google Score.

5 comments:

  1. How do you suggest calculating the Net Google Score?

    ReplyDelete
  2. Old School --- work with your favorite co-op on a mail/holdout test. Have the co-op sum sales for the mail group and the holdout group across the merchants participating in the co-op.

    That's more of a net internet score than a net Google score, but the concept is the same.

    Another old school technique is the panel --- companies have always paid customers to record all purchases across all retailers.

    Online, you could try to partner with folks at companies like comScore to measure inflow/outflow.

    ReplyDelete
  3. Thanks for your reply.

    BTW...your blog is an absolute treasure. Thank you for putting such thought and care into the topics you post.

    Seems like the panel is the best bet to get directional figures. As far as I can see it would be tough to do a test/control in Google's environment.

    ReplyDelete
  4. Thanks for the nice comment. Amazingly, one can do this and get enough consulting business to make a living.

    Most consultants would warn against giving so much information away for free. It seems like folks like to get information, and everything nets out positively in the end, so why not spend the time in a good way?

    ReplyDelete
  5. The Net Promoter score does identify the level of Loyalty that might exist in your customer base. But it does not give you the tools to improve your Customer Loyalty over the long run. Brookeside can do that

    ReplyDelete

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