Paul Hague this week advocates a simple, new metric to measure value.

In less than 10 years, the NPS or Net Promoter Score has become familiar jargon in business boardrooms. It is a single metric, a golf handicap score, that leaders can easily understand and which they can use to ruthlessly drive their businesses.

The Net Promoter Score is a measure of customer satisfaction and loyalty and who can deny that these two factors are crucial to the success of any business. It is easy to understand and the fact that it requires a simple calculation gives it a sort of scientific kudos.

Let us remind ourselves what the Net Promoter Score is. We ask customers one simple question – “How likely is it that you would recommend COMPANY X to a friend or colleague?” The response is recorded on a scale from 0 to 10 and the percentage of companies giving a score of 6 or less is subtracted from the percentage of companies giving a score of 9 or 10. Those in the middle ground giving scores of 7 or 8are ignored.

However, the NPS is not without its deficiencies.

We think that the NPS is a good metric but we also recognise that it is dangerous to drive a company on this number alone. The NPS does not measure the value that people attribute to a brand and this must be one of the most important metrics of all.

Towards this end we have developed a measure which is fast gaining ground. It is called the Net Value Score or NVS and it measures the value that people attach to a brand or a supplier.  Pat Kenny, Vice President Of Corporate Marketing at PPG Industries, said the following about the NVS:

“PPG Industries is fully committed to providing our customers with compelling value and so the NVS is a new metric that provides an ideal way to measure customer-experienced value. It is an excellent, adjacent metric to other popular customer advocacy scores that companies should embrace.”

To arrive at the Net Value Score, one simple question needs to be asked:

“How would you rate COMPANY X on the total value the company offers, compared to the total value offered by other suppliers of similar products/services?”

• Significantly better 
• Somewhat better
• Neither better nor worse
• Somewhat worse
• Significantly worse

Using answers to the question, the following steps result in the computation of the NVS:

1. Double the percentage of people that stated “significantly better”.
2. Double the percentage of people that stated “significantly worse”.
3. Add the adjusted “significantly better” figure (from step 1) to the percentage of people that stated “somewhat better”.
4. Add the adjusted “significantly worse” figure (from step 2) to the percentage of people that stated “somewhat worse”.
5. Subtract the total “worse” calculation (from step 4) from the total “better” calculation (from step 3) to arrive at the Net Value Score.

Calculating The Net Value Score

The Net Value Score is a composite measure of the brand value. The maximum possible score is 200. Excellent scores are above 60, good scores are between 40 and 60. Scores below 40 indicate a relative indifference to the brand and require urgent attention. The question can be asked of all companies known to a buyer or specifier (customers or potential customers) and it measures perceptions.  These perceptions drive customer choice. The NVS has the added advantage over the NPS of providing a simple tool for tracking the value of a brand over time and providing a very strong indicator of likelihood to purchase.

For more information on the Net Value Score, visit http://www.netvaluescore.com/

B2B International is pleased to announce the dates of its upcoming training courses in Shanghai: On Thursday, 22 September 2011, we will be running a Market With Intelligence course, and on Friday, 23 September 2011, we will host a course on Value-Based Marketing.

As with all our courses, these full-day, hands-on training workshops will enable attendees to not only learn the theory of marketing, but – crucially – to apply the learnings to their own businesses. A brief summary of the course schedules is shown below, but more information can be found here “Shanghai Marketing Training Courses”.

To book your place online, please click here.. If you have any questions, please call your nearest B2B International office or email shanghai@b2binternational.com

Market with Intelligence – Thursday, September 22, 2011

This course introduces you to the key principles of market research and how research tools can be used to grow your business. Topics covered include:

• Introduction to market research
• Obtaining qualitative insights for business decision-making
• Obtaining quantitative insights
• Turning the results of research into action

Value-Based Marketing – Friday, September 23, 2011

Our value-based marketing workshop explores the key marketing principles and how you can make them work for you, including:

• Market intelligence and value-based marketing
• Market analysis, mapping and segmentation
• Competitive intelligence
• Creating customer value
• Pricing for value capture and profit

In this week’s Thursday Night Insight Paul Hague reflects on his thoughts on completing the UK census form.

I have been a market researcher all my life. 40 years in fact. I love the job. It fulfils my intellectual curiosity, it indulges my love of travel, and it satisfies my desire for constant change – and yet I find it really difficult to take part in surveys. In the main I am protected from this by the Market Research Society guidelines that recommend most survey designers screen out the likes of me, knowing that my professional knowledge will bias my answers in some small degree.

However, last week I got my come-uppance. I returned home to find 32 pages of questions had thudded onto our welcome mat, with an introductory letter that informed me I would be incarcerated if I didn’t comply. Yippee – it is decennial census time. I looked at this daunting instrument of torture and I couldn’t begin to think how your average 85 year old, single gypsy, now separated from a same-sex relationship, would cope.

Fortified by three large glasses of sauvignon blanc, I decided to fill it in online. It was so easy I sailed through, congratulating myself and secure in the knowledge that the analysts who look at these things would be able to see that the time I had taken to complete the questionnaire was a world record. That was until I came to question 43, which asked me how many visitors would be in my house on the 27th March. Since I was pretty certain there wouldn’t be any, I looked for the button to say this and move on. However, there was no such button to tick. It seemed I had to have a visitor on the 27th or I was stuck.

I wondered whether Alfie, my 11-year-old boxer, would qualify but I couldn’t see any space for pets and animals in the form. I clearly needed a human visitor and I decided that to get out of the impasse I would invent one (I know, I know – I was risking a jail sentence, but by now I didn’t care). We often do have a couple of elderly relatives stay with us so why couldn’t I imagine that they were on one of their stop overs? In went Rosie’s name to start with, and this prompted a question about her date of birth. I had no idea and this was beginning to look ridiculous. I shouldn’t be making this up and, anyway, the more things I invented, the deeper the hole I dug myself into.

It was at this stage that my conscience was pricked and my head cleared slightly so I decided to work out what was going wrong. As I tracked back through the questionnaire, it became clear that in my slightly inebriated state I had incorrectly filled in question H5, which I thought had said how many people will be in the house on the 27th and it had, in fact, asked how many visitors would there be. Since I had answered 2 people, it was quite clear that this was the reason the computer-aided questionnaire was routing me to the visitor question.

So, what are my insights from all this? The experience of completing the questionnaire was better than the anticipation of doing so – which I was dreading. However, I found myself wondering about the futility of some of the questions. Surely the census is a head count of the people living in households and not much more. If we need to dig deeper on my thoughts and feelings such as the state of my health right now, or how well I can speak English (??), this is the stuff of sample surveys. Over-complication is a crime and we are over-complicating everything, including the design of our questionnaires.

Isn’t it a reflection of the politically correct world that we have to necessitate a special questionnaire for Welsh speakers and weird combinations of answers to which people can say they are British/English, simply British, simply English, British/Welsh, simply Welsh and so on. And please guess how many will actually tick the box that says they are Gypsy or Irish Traveller. Minorities must be looked after in our daily life but, in the case of a census, we should not be designing our process around 0.01% of any population.

I know that we have been keeping tabs on our population since the Doomsday book, but the census as we know it in the UK began in 1801. I don’t think anyone will shed any tears over the fact that this is our last one and from now on we will rely on sample surveys. My saving grace is that my completed form will be kept confidential for 100 years. So, unless I tell you, you won’t know that I am a surviving partner from a same-sex civil partnership, living in a holiday home, of any other Black/African/Caribbean/Black British extraction, holding an Irish passport, actively looking for work over the last four weeks and whose main language is British Sign Language.

In this Thursday night insight Paul Hague looks at the phenomenon of The Girl With The Dragon Tattoo and argues that “product” isn’t everything.

Have you read The Girl With The Dragon Tattoo? It’s a great story, there’s no doubt about it, but the story of how the book became a bestseller is even more incredible. Written in his spare time as a hard-working journalist, Stieg Larsson first called it Men Who Hate Women. Having finished his whopping manuscript and without publishing it, he began his second book. When this was finished he wrote his third. And then he had a heart attack and died. Only after his death were the books published.

The publishing of his books is another incredible story. The rights to the books in the UK, where it began its huge success, were bought by Quercus, a small and unknown backstreet publisher. The owner of Quercus became so desperate to shift copies he gave them away to people in parks and he planted dozens on the back seats of taxis and on tube trains. Today Quercus has moved to luxurious offices in Bloomsbury Square, and its revenues trebled to £15m in the first six months of 2010 on the back of the Larsson phenomenon.

So what can we learn from this? It seems to me there are at least five lessons:

1. What you call something is critically important. There is no doubt that sales were lifted by the intriguing and catchy label of The Girl With The Dragon Tattoo. When Marks & Spencer first launched its Vichyssoise soup, it didn’t sell. The name of the selfsame product was changed to Leek And Potato Soup and it flew off the shelves. We shouldn’t underestimate the names of our products. They are our brands, they carry a connotation, and they can positively or negatively affect sales to a dramatic degree.
2. The route to market is key. In the case of The Girl With The Dragon Tattoo it may well have helped that the publisher was small. The desperation to move the books may not have existed with a more prosperous and less hungry company.
3. Success requires critical momentum. Giving the books away in the first instance had a big cost but it kick-started growth. Somebody has to start reading and talking about the book and the sooner the better. Like a plane trundling down the runway, products gain height quickly once the wheels leave the ground.
4. Find a good PR story because it costs nothing. Undoubtedly the strange story of Larsson’s life and death captured the imagination of the media. It resulted in acres of newsprint which cost nothing and awakened the interest of the general public.
5. The product is important, but it isn’t everything. Larsson isn’t Dickens and he isn’t Shakespeare. However, his books have been published in 44 countries and have sold more than 40 million copies worldwide so far. They are a great read, there is no doubt about it but a product doesn’t have to be the best in the world to achieve the highest sales in the world. The debate still rages on as to which is best, a Mac or a PC . I won’t join that one but I will point out that Mac’s have less than a 10% market share and this in no way reflects the performance of the excellent product.

My insight today is that we should always take care to put as much emphasis on the other parts of the marketing mix as the product itself. Ralph Waldo Emerson once said that, If a man can write a better book, preach a better sermon, or make a better mousetrap, than his neighbour, though he build his house in the woods, the world will make a beaten path to his door. I am not so sure that The Girl With The Dragon Tattoo would have had such a large path beaten to its door without a little bit of marketing help.