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—Net Promoter, Recommendations, and Business Performance: A Clarification on Morgan and Rego

Author

Listed:
  • Timothy L. Keiningham

    (IPSOS Loyalty, Morris Corporate Center 2, 1 Upper Pond Rd, Bldg D., Parsippany, New Jersey 07054)

  • Lerzan Aksoy

    (College of Administrative Sciences and Economics, Koç University, Rumeli Feneri Yolu, Sariyer 34450, Istanbul, Turkey)

  • Bruce Cooil

    (Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37203)

  • Tor Wallin Andreassen

    (Department of Marketing, Norwegian School of Management, Nydalsveien 37, P.O. Box 20, N-0442 Oslo, Norway)

Abstract

One of the most controversial findings in Morgan and Rego (2006) was that two widely advocated loyalty metrics, “Net Promoter” and “Number of Recommendations,” have little or no value in predicting the financial outcomes of firms. We argue that neither measure was actually examined and that conclusions about the predictive value of these measures cannot be drawn from their analysis. A primary problem is that the measures used in Morgan and Rego (2006) do not adequately adjust for the presence of neutral word-of-mouth activity. Nevertheless, Morgan and Rego (2006) provide important information regarding other common customer metrics and firm financial outcomes. We are unaware of another longitudinal study that examines the predictive value of satisfaction and loyalty metrics in such a comprehensive way.

Suggested Citation

  • Timothy L. Keiningham & Lerzan Aksoy & Bruce Cooil & Tor Wallin Andreassen, 2008. "—Net Promoter, Recommendations, and Business Performance: A Clarification on Morgan and Rego," Marketing Science, INFORMS, vol. 27(3), pages 531-532, 05-06.
    • Handle: RePEc:inm:ormksc:v:27:y:2008:i:3:p:531-532
    DOI: 10.1287/mksc.1070.0292
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    References listed on IDEAS

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    1. Neil A. Morgan & Lopo Leotte Rego, 2006. "The Value of Different Customer Satisfaction and Loyalty Metrics in Predicting Business Performance," Marketing Science, INFORMS, vol. 25(5), pages 426-439, September.
    2. Roland T. Rust & Tuck Siong Chung, 2006. "Marketing Models of Service and Relationships," Marketing Science, INFORMS, vol. 25(6), pages 560-580, 11-12.
    3. Sunil Gupta & Valarie Zeithaml, 2006. "Customer Metrics and Their Impact on Financial Performance," Marketing Science, INFORMS, vol. 25(6), pages 718-739, 11-12.
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    1. Sven Baehre & Michele O’Dwyer & Lisa O’Malley & Nick Lee, 2022. "The use of Net Promoter Score (NPS) to predict sales growth: insights from an empirical investigation," Journal of the Academy of Marketing Science, Springer, vol. 50(1), pages 67-84, January.
    2. Baehre, Sven & O'Dwyer, Michele & O'Malley, Lisa & Story, Vicky M, 2022. "Customer mindset metrics: A systematic evaluation of the net promoter score (NPS) vs. alternative calculation methods," Journal of Business Research, Elsevier, vol. 149(C), pages 353-362.

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