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Marketing Science 2008

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

Timothy L. Keiningham1,2; Lerzan Aksoy3; Bruce Cooil4; Tor W. Andreassen5

1 IPSOS Loyalty, Morris Corporate Center 2, 1 Upper Pond Rd, Bldg D., Parsippany, New Jersey 07054 · 2 IPSOS Loyalty, Morris Corporate Center 2, 1 Upper Pond Rd, Bldg D., Parsippany, New Jersey 07054#TAB# · 3 Koç University · 4 Vanderbilt University · 5 BI Norwegian Business School

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.

DOI
10.1287/mksc.1070.0292
Sources
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