Importance of the Consumers Loyalty in Organizations Response
Please respond to the following with 200-300 words.
Even before reading details on Reichheld’s position on the single question, “would you recommend to a friend” being a suitable means of measurement, I thought it flawed. Then my viewpoint was reinforced by the findings of Keiningham et al. (2008) and their conclusion, “While loyalty is a concept that all managers want, we have found that it is not straightforward to translate customers’ loyalty attitudes into customers’ loyalty behaviours” (p. 88).
As ideal, the notion is that marketers need only rely upon one metric to lead to growth; that’s not the case. One flaw in that thinking is not all industries are the same, much less all products being the same. Keiningham et al. comment on this, “…industry type has a dramatic effect upon correlations, thereby calling the reliability of any of these single metrics (with respect to indicating loyalty behaviour) into question for a cross-industry analysis” (p. 86). Case and point, the oil and gas industry is a staple in our economy, but it is mostly affected by factors outside of customer loyalty.
The strategy in which marketers should be using NPS is not as cut and dry as Reichheld suggests. This leads me to the second reason I disagree with Reichheld. Weinstein (2018) states:
The HBR article also claims that the NPS question measures loyalty and growth. In reality, though, it fails to ask about either, and isn’t necessarily what users of NPS are attempting to measure. In many cases, survey questions should be phrased to directly measure the quantity of interest.
An NPS-like question asking about actualized behavior would look more like, “In the last 6 weeks, have you referred [company X] to a friend or colleague?”
Any questions utilized in a customer loyalty survey need to be crafted to provide more than surface data. The best correlation I can make to this is TV ratings. Shows are canceled when they don’t meet a particular score, and yet as we have seen with series like Brooklyn Nine-Nine, the networks do not always have all the data. There was an outcry from fans that ended up reviving the series on a different network in this instance.
Though I believe the Net Promotor Score has its usefulness, it is not something I would utilize alone to make business decisions. I see it as an additional data point to assist with analyzing customer satisfaction and learning what they’re needing/wanting. After all, we’re supposed to provide solutions that satisfy our customers’ needs and wants. What better way than hearing from them directly?
Keiningham, T. L., Aksoy, L., Cooil, B., Andreassen, T. W., & Williams, L. (2008). A holistic examination of Net Promoter. Journal of Database Marketing & Customer Strategy Management, 15(2), 79–90. https://doi.org/10.1057/dbm.2008.4
Weinstein, B. (2019, July 2). Moving beyond the Net Promoter Score. Medium. https://bweinstein.medium.com/moving-beyond-the-ne…