{"title":"Statistical validation of critical aspects of the Net Promoter Score","authors":"M. Cazzaro, P. Chiodini","doi":"10.1108/tqm-05-2022-0170","DOIUrl":null,"url":null,"abstract":"PurposeAlthough 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/approachEqual 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.FindingsThe 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/valueThe 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.","PeriodicalId":40009,"journal":{"name":"TQM Journal","volume":" ","pages":""},"PeriodicalIF":3.8000,"publicationDate":"2023-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"TQM Journal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/tqm-05-2022-0170","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
PurposeAlthough 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/approachEqual 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.FindingsThe 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/valueThe 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.
TQM JournalBusiness, Management and Accounting-Business, Management and Accounting (all)
CiteScore
9.10
自引率
0.00%
发文量
114
期刊介绍:
Commitment to quality is essential if companies are to succeed in a commercial environment which will be virtually unrecognizable in less than a decade. Changing attitudes, changing perspectives and changing priorities will revolutionise the structure and philosophy of future business practice - and TQM will be at the heart of that metamorphosis. All aspects of preparing for, developing, introducing, managing and evaluating TQM initiatives.