TITLE

Net Promoter Score Fails the Test

AUTHOR(S)
Sharp, Byron
PUB. DATE
December 2008
SOURCE
Marketing Research;Winter2008, Vol. 20 Issue 4, p28
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The article offers opinions on marketing research. The Net Promoter Score, a research metric on customer retention created by consultant Frederick Reichheld, is evaluated. Reichheld's claim that a corporation which could increase its retention rate by five percent could increase profits 100 percent is viewed as invalid and without statistical foundation. It is stated that increasing customer retention actually involves decreasing the rate of customer defection, a process which is largely beyond management's control. Customer defection is said to be dependent on market share and the number of competing brands in a particular market, meaning that defection rates as a measure of brand loyalty are almost impossible to alter permanently.
ACCESSION #
37797515

 

Related Articles

  • WHY CUSTOMER LOYALTY ISN'T AS VALUABLE AS YOU THINK. Pringle, Hamish; Field, Peter // Advertising Age;3/23/2009, Vol. 80 Issue 10, p22 

    The article looks at the value of customer loyalty. Consumer research shows that it is more profitable to increase a company's customer base than it is to increase the loyalty of customers. Brand loyalty is noted as being fairly constant, making new customers a more fiscally responsible point of...

  • Do you make the #1 marketing mistake? Hudson, Adams // Contractor Magazine;Sep2007, Vol. 54 Issue 9, p52 

    The article stresses that customer retention requires an ongoing commitment. Frederick Reichheld in "The Loyalty Effect," commands that if one is not practicing customer retention, he is "designing in" non-growth. Reichheld also pointed out that at rates of more than 90% retention, the life of a...

  • A Longitudinal Analysis of Customer Satisfaction and Share of Wallet: Investigating the Moderating Effect of Customer Characteristics. Cooil, Bruce; Keiningham, Timothy L.; Aksoy, Lerzan; Hsu, Michael // Journal of Marketing;Jan2007, Vol. 71 Issue 1, p67 

    Customer loyalty is an important strategic objective for all managers. Research has investigated the relationship between customer satisfaction and loyalty in various contexts. However, these predominantly cross-sectional studies have focused on customer retention as the primary measure of...

  • When Choosing Is Not Deciding: The Effect of Perceived Responsibility on Choice Outcome Satisfaction. Botti, Simona; McGill, Ann L. // Advances in Consumer Research;2006, Vol. 33 Issue 1, p512 

    This article reports on consumer satisfaction and perceived responsibility. The author discusses prior research on the topic, which indicates that when presented with all desirable options, consumers are more satisfied with self-chosen alternatives than with alternatives that have been...

  • BRAND PREFERENCE OF PASSENGER CARS IN TIRUCHIRAPPALLI DISTRICT -- AN OVERVIEW. Karthik, G.; Ramya, N. // Golden Research Thoughts;Jan2014, Vol. 3 Issue 7, p1 

    This research article explores the brand preference of passenger car industry. The detailed analysis of marketing, a consumer behavior and brand preference of passenger car is carried out in Tiruchirappalli District of Tamil Nadu state. As a result, focusing on an industry where brands,...

  • A STUDY OF ADVANCEMENT IN SALES FORECASTING MODELS. Gupta, Saurabh; Kumar, Nishant // Pranjana: The Journal of Management Awareness;Jan-Jun2013, Vol. 16 Issue 1, p1 

    The purpose of this study is to find out how much the advancement in techniques improves the accuracy of sales forecast which in turns help the organization to strengthen its competitive position in the market as well as increasing the customer satisfaction and brand loyalty. Methodology: In...

  • DOES SATISFACTION AFFECT BRAND LOYALTY? Jeonghoon Lee; Hansuk Lee // Academy of Marketing Studies Journal;2013, Vol. 17 Issue 2, p133 

    Customer satisfaction and brand loyalty, a consequence of customer satisfaction, have been treated as marketing goals for most firms. Many researches consider loyalty as a multidimensional base. Despite the finding of many researches that satisfaction has a positive impact on repurchase...

  • Happy Customers. Parry, Tim // Promo;2006 Sourcebook, p19 

    Reports on the condition of loyalty marketing in the United States. Primary reasons why customers participate in loyalty programs; Impact of high technology on loyalty marketing; Most popular customer loyalty awards.

  • A Customer Satisfied is Not a Customer Retained. Venkateswaran, Ramesh // IIMB Management Review (Indian Institute of Management Bangalore;Sep2003, Vol. 15 Issue 3, p120 

    Examines several aspects of customer retention as compared to customer satisfaction. Benefits that accrue to an organization due to retention of customers; Elements which causes customers to remain loyal to a company or brand and what causes them to migrate or defect; Objectives of a typical...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics