About
This blog was developed for a graduate-level class at The Johns Hopkins University called PR in the Age of Digital Influence. The course is taught by John Bell of Ogilvy Public Relations Worldwide.
This blog was developed for a graduate-level class at The Johns Hopkins University called PR in the Age of Digital Influence. The course is taught by John Bell of Ogilvy Public Relations Worldwide.
Tim Keiningham said
I thought you might like to know that two papers I co-authored concerning Net Promoter (the loyalty metric invented by Fred Reichheld) have just been released and are now available from the Journal of Marketing and Managing Service Quality. Both call into question the research and findings presented by Reichheld in his book, The Ultimate Question, and his article “The One Number You Need to Grow,” which appeared in the December 2003 issue of the Harvard Business Review.
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JOURNAL OF MARKETING
Net Promoter is now available at the Journal of Marketing. The Journal of Marketing is allowing the article to be downloaded for free, and I have confirmed that it is fine with publishing a link to the article should you wish to do so (i.e., http://www.atypon-link.com/AMA/toc/jmkg/71/3).
There are two key findings from the research:
1) We did not find Net Promoter to be a good predictor of growth at all.
2) We found very strong evidence of research bias in the research reported by Reichheld in support of Net Promoter. In particular, we were able to replicate a subset of Reichheld’s reported data for his best case scenarios and compare it to a metric he claimed was examined and found to have a 0.00 correlation to growth, the ACSI. Our findings clearly show that when using Reichheld’s own data, Net Promoter wasn’t superior to the ACSI. It is difficult to imagine a scenario other than research bias as the cause of this finding. This is a serious problem. We expect published research to be free of bias in management science, just as we do in all other fields of study. Managers have adopted Net Promoter based upon the belief that solid science underpinned the claims attributed to the metric. In fact, there would have been no HBR paper introducing Net Promoter without the research.
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MANAGING SERVICE QUALITY
Managing Service Quality has just released another paper we co-authored that investigates other aspects of the Net Promoter research conducted by Reichheld and Satmetrix. The research examines different customer satisfaction and loyalty metrics and tests their relationship to customer loyalty behaviors. The goal was to test the robustness of the customer-level analysis conducted by Reichheld and Satmetrix, which served as the foundation of the Net Promoter research. Contrary to Reichheld’s assertions, the results indicate that recommend intention alone will not suffice as a single predictor of customers’ future loyalty behaviors. Use of multiple indicators instead of a single predictor model performs better in predicting customer recommendations and retention.
Because of the importance of the work, Managing Service Quality is making the paper available for free for download at the following URL:
http://www.emeraldinsight.com/Insight/viewContentItem.do?contentType=Article&contentId=1615783
I have checked with the editor, and they would be happy to have you link to the URL should you wish to do so.
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Taken together, these findings call into question the robustness of the entire analysis conducted by Reichheld.
Best regards,
– Tim
Timothy Keiningham
Senior Vice President & Head of Consulting
IPSOS Loyalty
Morris Corporate Center 2
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Parsippany, NJ 07054
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