- A generally well-written and balanced critique which goes into a lot of detail on Reichheld’s HBR article.
- Critiqued the NPS but noted that it is no way a critique of measuring and managing customer word of mouth behaviors (p. 38).
- Grisaffe rightly pointed out that Reichheld used the NPS to predict historical growth rates as we also discussed.
- Grisaffe also right pointed out that LTR and LT continue purchasing are just behavioral intentions and behavioral intentions predict behavior. See Azjen.
- Quite simply, Grisaffe summarized that word of mouth is important, but NPS isn’t the ONLY thing you should measure. It’s akin to a dashboard light on your car.
- Specifically, tacking one number onto one survey is insufficient.
- Aiming for increased recommendations by providing value to a customer is a good thing, but is it the only thing?
- Will reducing loss be better, what about CLV?
- Loyalty and retention were the focus of Recihheld’s 1996 book; recommendations were just one of many aspects of loyalty.
- Argues that one number is helpful (like taking temperature) but not enough to diagnose.
- Is NPS an outcome, a measure of loyalty, or a cause of loyalty? Antecedents, consequences, and indicators.
- Reichheld defines Loyalty as the willingness of someone to make an investment or personal sacrifice in order to strengthen a relationship.
- Prevailing theory is that true loyalty is both attitudinal and behavioral. See Azjen TRA.
Questions About the Ultimate Question
May 15, 2021