Making Sense of the Net Promoter Score (NPS) - A study of NPS' relationship to Word of Mouth, attitudinal loyalty and customer satisfaction, and what drives these mindset metrics

Abstract: Since Fredrick F. Reichheld introduced the Net Promoter Score (NPS) in 2003, it has become one of the most favored customer mindset metrics (MSMs) within business practice. Often, it is claimed to be an indicator of customer loyalty, satisfaction, and Word of Mouth (WOM). However, there is a dissonance among researchers regarding to what extent this is true. This study investigates NPS' relationship to WOM, loyalty, and customer satisfaction. It also examines to what extent different associations drive each of these MSMs, respectively. The study is conducted within the category of Swedish retail investment services and is based on survey data from 315 respondents. Although NPS is significantly correlated to the other MSMs, the study could not corroborate significantly strong correlations. Hence, the claims made in previous research about NPS' ability to indicate WOM, loyalty, and customer satisfaction are questioned. This provides knowledge to the intense debate around NPS and concurrently presents important insights to marketing professionals using the metric. The findings further show that the strongest driving associations for the MSMs vary. A focus on image-related associations is proposed to increase NPS and WOM, while loyalty and customer satisfaction are more equally driven by a mix of image- and performance-related associations.