Monday, June 25, 2007

More Trouble for Net Promoter Score? A Longitudinal Examination of 'Net Promoter' on Firm Revenue Growth

The latest critique of the Net Promoter Score is now available for free download from the Journal of Marketing. The article is titled "A Longitudinal Examination of 'Net Promoter' on Firm Revenue Growth" and written by Timothy L. Keiningham, Bruce Cooil, Tor Wallin Andreassen and Lerzan Aksoy.

I wrote about this article in an earlier post (one of many in a series on the Net Promoter Score topic). Although there are still some differences in methodology (like slightly different wording for the likelihood to recommend question and different time periods used in the analysis) this study is the closest to an apple-to-apples comparison between the net promoter score and satisfaction and loyalty indicators.

Here's the abstract:

Managers have widely embraced and adopted the Net Promoter metric, which noted loyalty consultant Frederick Reichheld advocates as the single most reliable indicator of firm growth compared with other loyalty metrics, such as customer satisfaction and retention. Recently, however, there has been considerable debate about whether this metric is truly superior. This article (1) employs longitudinal data from 21 firms and 15,500-plus interviews from the Norwegian Customer Satisfaction Barometer to replicate the analyses used in Net Promoter research and (2) compares Reichheld and colleagues' findings with the American Customer Satisfaction Index. Using industries Reichheld cites as exemplars of Net Promoter, the research fails to replicate his assertions regarding the “clear superiority” of Net Promoter compared with other measures in those industries.