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.
