The Porter Group, Brady Capital Research ( www.bradycap.com), and wRatings Corporation ( www.wRatings.com) today announced the launch of the Customer Value Index 200 ( www.cvi200.com). This innovative index offers investors an opportunity to capture the value offered by companies that have historically delivered high quality economic profits and developed deeply emotional customer relationships based on cultures of transparency, authenticity, and engagement. By combining a patented approach to identifying companies with superior competitive positions and harnessing the power of social media the CVI 200 offers a play on the appreciating value of “social capital” over the next decade and the real value creating powers of strong core values, dynamic corporate cultures, and stakeholder community focus. The CVI 200 is a research-based analysis that provides investors with exposure to the top 10% of North American-listed companies with a market capitalization over $1 billion that score the highest in terms of competitive strength, social attributes, and authentic core values. The investment thesis of the CVI 200 rests upon the premise that engaged and loyal customers are amongst the most powerful determinants of a company’s ability to generate long-term sustainable cash flow. Our assessment methodology identifies the leading customer engagement companies through the following three-tier process:
- Competitive Strength and Social Strength Screening℠. Using wRating’s patented customer research methodology, we identified economically profitable companies with the highest level of competitive strength by uncovering how companies are meeting customer functional and emotional needs (measured in regard to moat barriers created in their supply, product, and delivery chain). Through a proprietary back-tested algorithm, we identified a subset of 9 of the 17 customer needs we track that most closely associate with social strength.
- Social Attributes Assessment℠. Our proprietary Social Attributes Assessment℠ acts as a listening post to measure the quality with which companies are using social media to enhance customer relationships, organizational culture, and community relationships. It uses a Likert Scale of 30 social “attributes” that seek to measure the firm’s level of transparency, authenticity, and engagement.
- Ranking by Social Capital Score℠. To select the CVI 200, we combine the Strength Analysis℠ with the Social Attributes Assessment℠ to arrive at our proprietary Social Capital Score℠. This ranks the final list of companies based on how well they are generating economic profit through customer engagement and a business built on a broader social purpose.