I recently saw a presentation from ad:tech San Francisco in which the following phrase was used:   "Recommendation is the new advertising."

The substantiation for this claim was that 90% of online consumers trust recommendations from people they know more than any other source. This of course starts one to wonder whether advertisers have entered the world of recommendation, in which they can try to influence that recommendation to achieve business benefit.  In considering this trend, I've also noticed that the window from Buy to Advocate in most of the advertising models shows this cycle as very short – meaning once someone makes the decision to buy, they immediately become an advocate.  This may make for an interesting model, but we all know what happens in between buy and advocate: the customer experiences a company’s brand, product, services, support, etc.  And along the way, perceptions are created that either serve to counter that initial buy decision or enhance it.

True recommendation comes from a positive feeling created through a multitude of experiences – it is a natural extension of these experiences, not a manipulation. Understanding these experiences – both online and offline – is still vital to any long-term customer strategy. As we know from word-of-mouth analysis, the value of a Promoter is both their lifetime purchase behavior in combination with their positive referral behavior. The combination of the two yields a total customer's worth. And we also know that the value of that referral behavior has exponentially changed through social engagement. Promoters are referring at greater rates across industries. Undeniably, social influence is growing.

Social media is opening new, unexplored avenues for influence, and permitting promoters to reach a broader audience than ever before. The social web is a critical channel for understanding the experiences that delight promoters (and mobilize them), gaining strategic insight about core issues being voiced by the market, understanding the influence of both active promoters as well as detractors, and prioritizing action accordingly.  So as you look at your social media strategy, recognize that the total customer experience is a cumulative activity which manifests itself in positive and negative sentiment about your brand, product quality, and value. This sentiment not so surprisingly can translate to a form of social web "promoters" and social web "detractors" which forms the basis for something we call Social NPS. How Social NPS aligns or calibrates to your structured NPS will be the topic of upcoming thought leadership and technology innovation for us. I look forward to your thoughts, comments, and questions.

We have written quite a bit on the topic of incentives and the risks around compensation based initiatives (together with the advantages). We have often referred to “cultural incentives” or “non-financial” incentives but it’s hard to imagine how that works in practice.

So it was with great anticipation that I visited Virgin Media’s “Love the customer” (day before valentine’s) event , near Birmingham, England to see how, in practice, you reinforce cultural success around Net Promoter.

Virgin Media has seen continuous improvements in their churn levels, down from 1.5% to 1.2% in the last year or so, a metric that correlates to NPS for them. Superior cross sell is resulting in triple-play (TV, broadband, phone) penetration going from 49.5% to 55.9% in a year – for a £4bn or so business that’s real money. In other words, a strong focus on customer loyalty is starting to pay significant dividends. So how do you reinforce success?

Well, you throw a party.

The event was a lot more than that however. One hundred of the top Net Promoter performers in the company mingled with executives at a ceremony to recognize accomplishments. Sure, it was a great social occasion, but combined with 2 days of training and speeches it accomplished more than that. First, the company sent the top performers back into their day jobs armed with a stronger understanding and reinforced motivation around the potential and impact of customer loyalty. These people become the influencers and informal leadership across the organization to keep the message strong.

But equally important was the message to everyone who didn’t make it. The company truly values exceptional customer experience and is quite prepared to recognize it in a very visible and positive way. Don’t miss out next time.