FEATURE21 January 2014

Mainlining social information


Richard Owen, Satmetrix CEO, wants to create a Bloomberg-like terminal for streaming voice of the customer data. Interview by Brian Tarran.


The names ‘Satmetrix’ and ‘Net Promoter’ go hand in hand. Satmetrix is the company that worked with Fred Reichheld and Bain & Company to build the Net Promoter Score (NPS) – a customer loyalty metric that’s gone on to conquer large swathes of the corporate world thanks to its much vaunted claim to correlate with revenue growth. 

So it’s somewhat surprising to hear Richard Owen, the CEO of Satmetrix, declare that: “Net Promoter has been a mixed blessing.”

Success has its downsides, it would seem. ‘The one number you need to grow’ might have made for a good headline in the Harvard Business Review, but it also became a stick with which critics would beat NPS. Researchers challenged its ability to predict company growth, while others disliked the way an issue as complex as customer experience was boiled down to a simple question: ‘How likely are you to recommend our company/product/service to your friends and colleagues?’

“There’s no doubt that NPS sacrifices fidelity for simplicity,” says Owen. “But surely, anything that gets management excited about understanding their customer base is a good thing?” 

“Think about it from the perspective of the CEO: everyone likes the idea of customer-driven growth. There is a sincere belief that the perspective of the customer should be driving decisions. But the reality is that it is very hard to bring the voice of the customer into an organisation in a way that can be acted on. NPS is a mechanism to bring that into the mainstream.”

Data feed

Few would argue that NPS hasn’t achieved mainstream acceptance, but Owen’s ambition now is to mainline it direct into organisations, whatever their size. “The goal is to allow companies to understand the consumer voice as a real-time streaming dataset – like a Bloomberg terminal tracking what is happening to the brand,” says Owen.

In two weeks, Satmetrix will take the first of what will undoubtedly be many steps towards achieving that goal. This milestone is an updated release of software for the analysis of unstructured data, gleaned from the social web. Social data is sourced primarily from DataSift – which partners with all of the major social sites to receive a ‘firehose’ of their data. This data is then run through a black-box algorithm that uses word clustering to work out if any sentiment is being expressed in social media posts, before scoring the depth of sentiment using the Net Promoter scale, which splits people into three groups: Detractors, Passives and Promoters.

The resulting metric is called ‘SparkScore’. “Our ambition is for it to become the default measurement for social voice of customer, in the same way that NPS has become the default choice for voice of customer,” says Owen.

Several of Satmetrix’s banking and telecoms customers have been piloting the social data product for the past 12 months, juxtaposing its outputs with those of their traditional NPS programmes and testing whether its actually possible to take large volumes of sentiment data from social media and translate it into NPS.

“12 months ago, I would have said there were still a lot of hurdles to overcome,” says Owen. “But now we can look at social commentary and predict whether you are a Promoter or a Detractor to 92% accuracy.”

Brand perceptions

Owen is keen for Satmetrix, and the companies it works with, to start putting social data to good use. NPS programmes currently rely on customer surveys, but Owen worries that people are devoting less and less time to completing questionnaires – instead choosing to report on their positive and negative experiences with companies via social media.

But of course, one advantage of administering surveys to customers is that the company knows who it’s talking. That’s not so easy online. But Owen asks rhetorically: “Does it matter who these people are? Whether they are customers or not, or representative of your customer base, they are feeding the perception of your brand, so at the very least we need to understand what is going on.”

Indeed, Owen makes the point that a measure of marketplace word-of-mouth might actually offer a truer picture of how a company is perceived than that provided only by surveys of customers. In two weeks, companies will be able to put that idea to the test.