The use of Net Promoter Score (NPS) to predict sales growth: insights from an empirical investigation

Sven Baehre (), Michele O’Dwyer (), Lisa O’Malley () and Nick Lee ()
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Sven Baehre: University of Limerick, National Technological Park
Michele O’Dwyer: University of Limerick, National Technological Park
Lisa O’Malley: University of Limerick, National Technological Park
Nick Lee: University of Warwick

Journal of the Academy of Marketing Science, 2022, vol. 50, issue 1, No 7, 67-84

Abstract: Abstract Net Promoter Score (NPS) has been widely adopted by managers as a measure of customer mindset and predictor of sales growth. Over time, practitioners have evolved the use of NPS from its original purpose as a transaction-based customer loyalty metric, towards a metric for tracking overall brand health which includes responses from non-customers. Despite enduring managerial popularity, academics remain skeptical of NPS, citing methodological issues and ongoing concerns with NPS measurement. This study re-visits the use of NPS as a predictor of sales growth by analyzing data from seven brands operating in the U.S. sportswear industry, measured over five years. Our results confirm—within the context of our study—that while the original premise of NPS is reasonable, the methodological concerns raised by academics are valid, and only the more recently developed brand health measure of NPS (using an all potential customer sample) is effective at predicting future sales growth.

Keywords: Net Promoter Score; Customer mindset; Marketing performance metrics; Brand health; Customer journey; Panel model (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (12)

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DOI: 10.1007/s11747-021-00790-2

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