Exhibit 2.7 Net Promoters Index, based on a survey, is the
percentage willing to recommend your brand minus those who are not willing to
do so.
Propounded by Fred
Reichheld, the Net Promoter Index is a straightforward approach to
measuring brand equity. Based on a single metric — “willingness to recommend” —
the net promoter index, is the percentage of respondents in a survey who are
willing to recommend a brand, minus those who are not willing to do so (Exhibit
2.7).
Nowadays, for brands that exhibit high levels of
online engagement, a Net Advocacy Index may
serve as an indicator of sentiments on the internet. This approach relies on
natural language processing (NLP) algorithms
to assess the positivity/negativity/neutrality (sentiment analysis)
of the multitude of online conversations. NLP is a field of computer science,
artificial intelligence and linguistics concerned with the interactions between
computers and natural languages.
The net advocacy index is constructed in a manner similar
to the net promoter index. Researchers tap into unsolicited consumer generated
media, and create the index based on the sentiment of these conversations.
Consumers who are engaged and vocal on the net
tend to have strong opinions that may not reflect the viewpoint of other
consumers. Because of this, the net advocacy index is heavily biased. One would
not recommend it as a measure of brand equity, though it is a useful indicator
of how sentiments on the internet are changing.
One limitation of the Net Promoter Index is that it
does not reveal the factors influencing or driving brand equity. To be able to
act on the data, it is vital for marketers to know how to influence the equity
of their brands.
