Good and bad market research: A critical review of Net Promoter Score

Nicholas I. Fisher and Raymond E. Kordupleski

Applied Stochastic Models in Business and Industry, 2019, vol. 35, issue 1, 138-151

Abstract: Net Promoter Score, touted as the “single customer metric you need” and calculated from customers' answer to one simple question about their loyalty, has been in use since 2003 and adopted in a wide variety of settings. However, it has not lived up to its claimed benefits. This article evaluates the NPS approach in terms of its positive and negative results. This article is for people interested in NPS, still considering implementing NPS in their company, or interested in its technical underpinnings. It points out the benefits and shortcomings and explains why, and it describes what can be done to achieve the outcomes NPS theory claimed it would produce, but has not. The article is written in two parts for quite distinct audiences: firstly, for executives and managers who need customer data and information to make marketing decisions; and secondly, for market researchers, statisticians, and business analysts who are responsible for capturing and providing reliable, understandable, and meaningful customer data to the executives and managers who need the information. Consequently, the two sections are written in two different styles. The first section takes the form of a summary for managers and executives of our findings and recommendations in language aimed at business leaders; the second section provides a detailed analysis and critical review of NPS for market researchers, statisticians, and business analysts. Both sections present a better solution than NPS for understanding what customers value, delivering the best value to customers, winning market share, and creating truly loyal customers.

Date: 2019
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Citations: View citations in EconPapers (6)

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https://doi.org/10.1002/asmb.2417

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Persistent link: https://EconPapers.repec.org/RePEc:wly:apsmbi:v:35:y:2019:i:1:p:138-151

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