Nomological validity of the Net Promoter Index question

The purpose of this study is twofold. First, it aims to provide a review of the Net Promoter© Index (NPI), the evidence of its ability to predict financial performance, and the evidence of its superiority to other voice of customer metrics. Second, it seeks to investigate the nomological validity of the Net Promoter question. It aims to view the NP question as an alternative to the traditional word-of-mouth measure, which is one of the components of customer loyalty. The nomological validity of NP was evaluated in a model including customer satisfaction as an antecedent and repurchase intention as a consequence.

The data for empirically addressing a set of hypotheses related to the nomological validity were collected via self-administered questionnaire. A total of 159 participants completed questions for banking services, 153 individuals completed questions for hairdresser/barber services, and 132 completed questions for cell phone services. The hypotheses were tested using partial least square analysis.

The results provide evidence for the nomological validity of the NPI question; albeit, the traditional word-of-mouth measure seems to perform equally as well or even better.

A set of pros and cons related to NPI are developed. The paper recommends including the NPI in a portfolio of voice of customer metrics but not as a standalone diagnostic tool. Further, given the present state of evidence, it cannot be recommended to use the NPI as a predictor of growth nor financial performance.

The paper provides further insights into the validity of the Net Promoter Index as a measure of customer loyalty.