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Open Access
Article
Publication date: 25 April 2023

Manuela Cazzaro and Paola Maddalena Chiodini

Although the Net Promoter Score (NPS) index is simple, NPS has weaknesses that make NPS's interpretation misleading. The main criticism is that identical index values can…

1236

Abstract

Purpose

Although the Net Promoter Score (NPS) index is simple, NPS has weaknesses that make NPS's interpretation misleading. The main criticism is that identical index values can correspond to different levels of customer loyalty. This makes difficult to determine whether the company is improving/deteriorating in two different years. The authors describe the application of statistical tools to establish whether identical values may/may not be considered similar under statistical hypotheses.

Design/methodology/approach

Equal NPSs with a “similar” component composition should have a two-way table satisfying marginal homogeneity hypothesis. The authors compare the marginals using a cumulative marginal logit model that assumes a proportional odds structure: the model has the same effect for each logit. Marginal homogeneity corresponds to null effect. If the marginal homogeneity hypothesis is rejected, the cumulative odds ratio becomes a tool for measuring the proportionality between the odds.

Findings

The authors propose an algorithm that helps managers in their decision-making process. The authors' methodology provides a statistical tool to recognize customer base compositions. The authors suggest a statistical test of the marginal distribution homogeneity of the table representing the index compositions at two times. Through the calculation of cumulative odds ratios, the authors discriminate against the hypothesis of equality of the NPS.

Originality/value

The authors' contribution provides a statistical alternative that can be easily implemented by business operators to fill the known shortcomings of the index in the customer satisfaction's context. This paper confirms that although a single number summarizes and communicates a complex situation very quickly, the number is ambiguous and unreliable if not accompanied by other tools.

Details

The TQM Journal, vol. 35 no. 9
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 4 March 2014

Kai Kristensen and Jacob Eskildsen

In 2003 Reichheld published an article in HBR, in which he claims that the net promoter score (NPS), is the only number you need to grow, and the only number you need to manage…

4479

Abstract

Purpose

In 2003 Reichheld published an article in HBR, in which he claims that the net promoter score (NPS), is the only number you need to grow, and the only number you need to manage customer loyalty. The purpose of this paper is to demonstrate that the NPS is inferior to the standard measures of loyalty used by the American Customer Satisfaction Index (ACSI) and EPSI rating.

Design/methodology/approach

In 2006 a customer satisfaction survey of the entire insurance sector in Denmark was conducted. The survey design was based on the questionnaires from EPSI rating and ACSI supplemented with insurance-specific questions, consumer sentiment questions and the basic Net Promoter Question. The sample consists of approximately 2,000 observations.

Findings

The analyses presented in this paper show that the NPS it not what it claims to be: the one number you need to grow. The NPS is found to be a very poor predictor of both customer loyalty and customer satisfaction. The measure is very sensitive to changes in the underlying distribution, and finally the precision of the NPS was found to be low compared to other measures of loyalty, and it is not possible to predict the NPS categorization and hence it is hard to say precisely, how organizations can influence corporate growth based on the NPS.

Research limitations/implications

The analysis is only conducted on data collected in a Danish business-to-consumer setting. More research is needed to shed light on the performance of the NPS across cultures as well as in a business-to-business setting.

Practical implications

The paper demonstrates the dangers of using the NPS as an input to managerial decision making. Organizations are far better off using a standard customer loyalty measure such as those employed by the ACSI or EPSI instead of the NPS.

Originality/value

Previous studies of the NPS have not replicated the methodology directly. Either there have been differences in scale length or in wording. The authors have constructed an experiment in the Danish insurance industry that answers some of the questions concerning the NPS without the shortcomings that most of the previous studies have suffered from.

Details

The TQM Journal, vol. 26 no. 2
Type: Research Article
ISSN: 1754-2731

Keywords

Article
Publication date: 9 February 2021

Dyah Puspitasari Srirahayu, Esti Putri Anugrah and Khoirotun Layyinah

This study aims to determine the NPS score of state academic libraries users in Indonesia, the relationship between user loyalty and NPS scores and the relationship between user…

Abstract

Purpose

This study aims to determine the NPS score of state academic libraries users in Indonesia, the relationship between user loyalty and NPS scores and the relationship between user satisfaction with NPS.

Design/methodology/approach

The method used in this research is quantitative explanatory method, which surveyed the relationship between satisfaction, loyalty and NPS variables based on the development of previous studies and existing theories. The population in this study were students visiting the state university library in Surabaya, Indonesia, namely Library A, Library B, Library C and Library D. The total number of samples taken was 200 divided equally to each of the universities, with 50 respondents respectively. Data collection was done with a questionnaire.

Findings

The Result shows that NPS value for academic library in Indonesia was 8. (1) The probability value of satisfaction with NPS is 0.18 (greater than 0.01) so H1 is rejected, meaning that satisfaction has no significant effect on NPS, (2) The probability value of satisfaction with loyalty is < 0.01 so that H0 is accepted. This means that satisfaction has a significant effect on loyalty and (3) The probability value of loyalty to NPS is < 0.01 so that H0 is accepted. This indicates that loyalty has a significant effect on NPS.

Research limitations/implications

To get user satisfaction, libraries need to improve facilities and services in accordance with the characteristics and needs of users, so that user expectations will be met and achieve satisfaction. When user satisfaction has been fulfilled, user loyalty to library products will be formed, so the NPS score will increase which is manifested by users recommending the library to others. This research has limitations, namely that the object of research is only in public higher education centers, so for generalization it is necessary to add research objects such as private college libraries, public libraries or school libraries.

Originality/value

Research on loyalty by using NPS has not been done much especially in Indonesia. This study also examines the relationship between satisfaction and loyalty on NPS scores.

Details

Library Management, vol. 42 no. 6/7
Type: Research Article
ISSN: 0143-5124

Keywords

Article
Publication date: 10 February 2023

Van-Ho Nguyen and Thanh Ho

This study aims to analyse online customer experience in the hospitality industry through dynamic topic modelling (DTM) and net promoter score (NPS). A novel model that was used…

616

Abstract

Purpose

This study aims to analyse online customer experience in the hospitality industry through dynamic topic modelling (DTM) and net promoter score (NPS). A novel model that was used for collecting, pre-processing and analysing online reviews was proposed to understand the hidden information in the corpus and gain customer experience.

Design/methodology/approach

A corpus with 259,470 customer comments in English was collected. The researchers experimented and selected the best K parameter (number of topics) by perplexity and coherence score measurements as the input parameter for the model. Finally, the team experimented on the corpus using the Latent Dirichlet allocation (LDA) model and DTM with K coefficient to explore latent topics and trends of topics in the corpus over time.

Findings

The results of the topic model show hidden topics with the top high-probability keywords that are concerned with customers and the trends of topics over time. In addition, this study also calculated and analysed the NPS from customer rating scores and presented it on an overview dashboard.

Research limitations/implications

The data used in the experiment are only a part of all user comments; therefore, it may not reflect all of the current customer experience.

Practical implications

The management and business development of companies in the hotel industry can also benefit from the empirical findings from the topic model and NPS analytics, which will support decision-making to help businesses improve products and services, increase existing customer satisfaction and draw in new customers.

Originality/value

This study differs from previous works in that it attempts to fill a gap in research focused on online customer experience in the hospitality industry and uses text analytics and NPS to reach this goal.

研究目的

本研究旨在通过动态主题建模和净推荐值分析酒店业的在线客户体验。 提出了一种用于收集、预处理和分析在线评论的新模型, 以了解语料库中的隐藏信息并获得客户体验。

研究设计/方法/途径

收集了一个包含 259,470 条英文客户评论的语料库。 研究人员通过 Perplexity 和 Coherence Score 测量结果进行了实验, 并选择了最佳的 K 参数(主题数量)作为模型的输入参数。 最后, 团队使用 Latent Dirichlet allocation (LDA) 模型和具有 K 系数的 Dynamic Topic Model (DTM) 在语料库上进行实验, 以探索语料库中的潜在主题和主题随时间变化的趋势。

研究发现

主题模型的结果显示了隐藏的主题, 其中包含与客户相关的顶级高概率关键字以及主题随时间的变化趋势。 此外, 该研究还根据客户评分计算和分析净推荐值 (NPS), 并将其显示在概览仪表板上。

研究局限性/意义

实验中使用的数据只是所有用户评论的一部分; 因此, 它可能无法反映所有当前的客户体验。

实践意义

酒店业公司的管理和业务发展也可以受益于主题模型和 NPS 分析的实证结果, 这将支持决策制定, 帮助企业改进产品和服务, 提高现有客户满意度, 并吸引新客户 .

研究原创性/价值

本研究不同于以往的研究, 因为它试图填补以酒店业在线客户体验为重点的研究空白, 并使用文本分析和 NPS 来实现这一目标。

Details

Journal of Hospitality and Tourism Technology, vol. 14 no. 2
Type: Research Article
ISSN: 1757-9880

Keywords

Article
Publication date: 17 July 2023

Alexander Ziegler, Thomas Peisl and Robert Raeside

The paper extends the discussion on the merit of using a net promoter score (NPS) to enhance the service design of organisations and to facilitate quality monitoring and…

Abstract

Purpose

The paper extends the discussion on the merit of using a net promoter score (NPS) to enhance the service design of organisations and to facilitate quality monitoring and improvement. NPS is a basic measure to assess the likelihood of a customer recommending an organisation to somebody else. This paper aims to show that this metric can be effective in monitoring and improving the quality of workplace training.

Design/methodology/approach

Investigating the merit of using NPS to improve organisational training involved a longitudinal study of training provided by IBM. Data is analysed using panel regression and partial correlation methods. Workplace training delivery is the unit of analysis in which an NPS and conventional customer satisfaction score evaluations were conducted at the end of the delivery. The efficacy of these measures to improve quality are compared and insights derived from analysing NPS are investigated.

Findings

The findings indicate that, although NPS is not necessarily related to the results or success of a business, from a corporate perspective it can provide a solid basis from which to make business decisions that benefit a company. The authors found that NPS was associated with improved satisfaction with training, although significant regional variations were observed. Building on the data, a service business model is proposed advocating NPS as a tool for continuous improvement.

Practical implications

The contribution to practice includes a clearer understanding of NPS as a quality and service improvement indicator and also as a driver for a service business design. In addition, it is indicated that enterprises operating in multiple regions should consider regional variations in NPS.

Originality/value

By analysis of IBM’s training data, the authors gain an understanding of an industry in which quality and the use of NPS has not been extensively studied. The data also offers a rich dimension in the examination of the factors that should be considered to effectively implement an NPS service improvement plan.

Details

International Journal of Quality and Service Sciences, vol. 15 no. 2
Type: Research Article
ISSN: 1756-669X

Keywords

Article
Publication date: 7 March 2008

John Blasberg, Vijay Vishwanath and James Allen

Executives need a more advanced tool for examining consumers' loyalty, one that provides a sharper, more precise view. this paper aims to introduce such a tool.

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Abstract

Purpose

Executives need a more advanced tool for examining consumers' loyalty, one that provides a sharper, more precise view. this paper aims to introduce such a tool.

Design/methodology/approach

The paper looks at Bain's Net Promoter Score (NPS).

Findings

The paper finds that the tool needs to focus not on satisfaction and market share but on consumer advocacy, which is key to creating enthusiastic consumers who come back to buy offerings again and again – and are happy about doing it. Bain's NPS can reveal whether consumers identify emotionally with a brand and feel listened to and understood by the company that makes it. NPS scores help identify groups of consumers who feel well served by your product and groups that do not, whose needs you can then probe further. NPS opens a window into how well mass brands are actually serving profitable consumer segments, as opposed to catering to a statistically “typical” consumer who exists only in theory.

Practical implications

Because NPS scores help uncover determinants of future behavior, they provide a much better basis for spotting product weaknesses, evaluating a brand's health and helping gauge whether new products will succeed.

Originality/value

By producing and evaluating NPS data on a regular basis, organizations can institutionalize a cultural shift, making consumer metrics just as practical and auditable as financial metrics like profit and return on equity. They can make performance in the eyes of consumers just as critical a goal as financial performance.

Details

Strategy & Leadership, vol. 36 no. 2
Type: Research Article
ISSN: 1087-8572

Keywords

Open Access
Article
Publication date: 2 December 2020

Peter Madzík and Arash Shahin

The purpose of this study is to present and explain a new customer segmentation approach inspired by failure mode and effect analysis (FMEA) which can help classify customers into…

4795

Abstract

Purpose

The purpose of this study is to present and explain a new customer segmentation approach inspired by failure mode and effect analysis (FMEA) which can help classify customers into more accurate segments.

Design/methodology/approach

The present study offers a look at the three most commonly used approaches to assessing customer loyalty:net promoter score, loyalty ladder and loyalty matrix. A survey on the quality of restaurant services compares the results of categorizing customers according to these three most frequently used approaches.

Findings

A new way of categorizing customers through loyalty priority number (LPN) is proposed. LPN was designed as a major segmentation criterion consisting of customer loyalty rate, frequency of purchase of products or services and value of purchases. Using the proposed approach allows to categorize customers into four more comprehensive groups: random, bronze, silver and gold – according to their loyalty and value to the organization.

Practical implications

Survey will bring a more accurate way of categorizing customers even in those sectors where transaction data are not available. More accurate customer categorization will enable organizations to use targeting tools more effectively and improve product positioning.

Originality/value

The most commonly used categorization approaches such as net promoter score, loyalty ladder or loyalty matrix offer relatively general information about customer groups. The present study combines the benefits of these approaches with the principles of FMEA. The case study not only made it possible to offer a view of the real application of the proposed approach but also made it possible to make a uniform comparison of the accuracy of customer categorization.

Details

International Journal of Quality & Reliability Management, vol. 38 no. 8
Type: Research Article
ISSN: 0265-671X

Keywords

Article
Publication date: 25 December 2020

Laura Lucia-Palacios, Raúl Pérez-López and Yolanda Polo-Redondo

The aim of this paper is to examine the effects of the disconfirmation of expectations of crowding and mall accessibility, on stress and two marketing outcomes, satisfaction and…

Abstract

Purpose

The aim of this paper is to examine the effects of the disconfirmation of expectations of crowding and mall accessibility, on stress and two marketing outcomes, satisfaction and promoter scoring.

Design/methodology/approach

Data were obtained through two face-to-face surveys from mall shoppers that answered them at two different moments of their shopping experience, before entering the mall and before leaving it. Results are obtained from 230 customers that answered the two questionnaires.

Findings

The findings suggest that stress indirectly influences customer promoter scoring through satisfaction, while disconfirmation of expectations influences it directly and indirectly.

Practical implications

These results also suggest that stress and disconfirmation of expectations about crowding and accessibility are important in determining promoter scoring. To reduce stress and increase satisfaction and promoter scoring, managers should focus on exceeding customers' expectations about mall accessibility and on ensuring that customers experience a lower level of crowding than they expected.

Originality/value

The article examines Net Promoter Scoring, an outcome that has attracted managers' attention but little is known about its antecedents. The paper provides evidence of the effect of disconfirmation of expectations and negative emotions on promoter scoring.

Details

International Journal of Retail & Distribution Management, vol. 49 no. 5
Type: Research Article
ISSN: 0959-0552

Keywords

Article
Publication date: 15 January 2018

Yavuz Inal

The purpose of this paper is to evaluate the usability of the National Library of Turkey website developed for all citizens in the country to retrieve information available in a…

1464

Abstract

Purpose

The purpose of this paper is to evaluate the usability of the National Library of Turkey website developed for all citizens in the country to retrieve information available in a wide range of areas.

Design/methodology/approach

The evaluation performed by 57 undergraduate university students involved the identification and analysis of usability problems in the selected website. The assessment process was mainly based on Nielsen’s Heuristics. The data obtained in the evaluation process were enriched using the System Usability Scale (SUS) and the Net Promoter Score (NPS) to conduct a more detailed analysis.

Findings

The participants identified many usability problems concerning the evaluated website and considered it as having low usability characteristics. The most violated heuristic item was found to be “consistency and standards” whereas the least violated heuristic item was “match between system and the real world.” The total number of the usability problems in heuristic evaluation correlated significantly and negatively with the SUS and the NPS results indicating that the more participants identified usability problems, the less they considered the website as usable and recommendable.

Research limitations/implications

The participants were not usability experts, however they were selected from among the students who received the Human Computer Interaction course to ensure that they had sufficient information and experience concerning the evaluation of a website with heuristics. Besides, the study was limited to a small number of university students. The implication is that results of this study have potential to guide libraries, which plan to adapt themselves to the digital world by delivering web services, by addressing critical points influencing users’ points of views toward library websites and their usability evaluation result.

Practical implications

Depending on the changes in user habits regarding the retrieval of information, libraries have made considerable investments in web technologies to meet their users’ demands, and recently, digital libraries have begun to take over physical libraries. Users always need to perform tasks efficiently, effectively and satisfactorily when using websites. As one of the most crucial sources of digital materials, library websites are expected to have usable characteristics that satisfactorily meet user requirements. Therefore, the practical implication is that the findings of the study will guide designers, developers and practitioners in the development of library websites.

Originality/value

In the context of usability evaluation of digital libraries, this is the first study to analyze effects of usability problems identified by users during the heuristic inspection on their overall evaluation score and willingness to recommend the website to their friends or colleagues.

Details

Aslib Journal of Information Management, vol. 70 no. 1
Type: Research Article
ISSN: 2050-3806

Keywords

Open Access
Article
Publication date: 5 September 2018

Timo Laine and Markku Antero Laitinen

In the transformed information environment, the impact and value of the services are not adequately shown using the traditional library metrics. It needs to be supplemented with…

2486

Abstract

Purpose

In the transformed information environment, the impact and value of the services are not adequately shown using the traditional library metrics. It needs to be supplemented with user-centered ways of measurement. The paper aims to discuss these issues.

Design/methodology/approach

The paper is a case study of the new Finna service and the measurement challenges it presents.

Findings

The standards guiding the measurement and evaluation of libraries cannot offer a “cook-book” for the organizations to follow. The paper suggests that as a one possible response to this, the Net Promoter Score can be used as one indicator in measuring the impact of new services.

Research limitations/implications

The findings of the paper are preliminary, because so far there is not a wide experience of the use of NPS in libraries. This calls for further study. The results are encouraging, but more testing is needed with different services.

Originality/value

NPS has not been widely used in libraries before.

Details

Library Management, vol. 40 no. 1/2
Type: Research Article
ISSN: 0143-5124

Keywords

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