Social Media ROI: Advocacy for BMW

April 11, 2011

This is the real “one number you need to grow”.  I’m sure most of you are familiar with Net Promoter Score.  This is the MotiveQuest version of NPS; observed, organic, real.

We measure advocacy, which is the number of people recommending a brand above any others, and have seen strong relationships between the metric and sales in a number of categories including automotive, cellular, CPG, pharma and others.  The underlying concept is similar to NPS – namely that if people are recommending your brand to others, that you will be better off than if they are NOT recommending your brand.

Here is where it is different from NPS.  We are observing naturally occurring recommendations.  There is no suggestion, no survey, no artifice.  People are either recommending your brand to others or they aren’t.  We have tested this extensively (working with a team at Northwestern’s Kellogg School) to validate the correlations between change in advocacy and change in sales or market share.

Example below from the luxury car category showing the correlation between changes in advocacy and changes in share for BMW.

While the scales are different we can see the positive correlation in advocacy and luxury market share for BMW. Looking at the scatter plot and doing the regression confirms the relationship and it’s statistical significance with a p-value of 5% (we’re 95% confident that there is a positive correlation between advocacy and luxury market share). 

Given the complexity of the automotive category and the economic conditions in this time frame it’s amazing that a single factor model can so nicely line up.  With an understanding of incentives to dealers/buyers, advertising spend and supply issues I’m certain the model could be improved but at the end of the day we’re validating that social media does matter. 

Social media clearly has an impact on sales in this category and others.  Many times the relationship will not be this clear or the category may be so complex that a single variable model cannot tease out the results or there could be errors in the metric (source spam/problems, bad language model, etc…)  but if you believe in the 3 tenets, it’s not surprising and quite intuitive that there should be a link between a social media metric and sales.

Of course, to change advocacy you need to know what drives it – but we do that part too!  We have an underlying analytic model to understand in detail what drives advocacy for any category, brand or competitive set.