Net Promoter and Revenue Growth: An Examination Across Three Industries

Abstract

This study examines the claim that the Net Promoter Score (NPS) is an indicator of future revenue growth. It firstly reviews published work on this topic, then presents evidence from firms in three US industries: airlines, supermarkets and insurance companies. A distinctive feature of the analysis is that it uses longitudinal data for NPS and revenue for periods between 5 and 11 years for airlines and supermarkets. This contrasts to the predominant approach in past work, which has been to analyse cross-sectional data. In addition to that longitudinal analysis, the cross-sectional association between NPS and revenue growth is examined for a sample of 10 large insurance firms for an aggregated period 2017 to 2020. The overall conclusion from the analysis is that Net Promoter is not an indicator of future revenue growth.