More Attacks on Net Promoter Score

It seems to be open season on Fred Reichheld. For many years, his concept of Net Promoter Score as a critical predictor of business success has been questioned by marketers. The Internets are now buzzing with a recent academic study “A Longitudinal Examination of Net Promoter and Firm Revenue Growth” (Timothy L. Keiningham, Bruce Cooil, Tor Wallin Andreassen, & Lerzan Aksoy, Journal of Marketing, July 2007) that duplicated Reichheld’s research but “fails to replicate his assertions regarding the ‘clear superiority’ of Net Promoter compared...

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The Performance Power Grid Doesn't Impress

Every so often, someone offers to send me a review copy of a new business book. Usually I don’t accept, but given my current interest in performance management techniques, a headline touting “Six Reasons the Performance Power Grid Trumps the Balanced Scorecard” was intriguing. After all, Balanced Scorecard is the dominant approach to performance management today—something that becomes clear when you read other books on the topic and find that most have adopted its framework (with or without acknowledgement). So it seemed worth looking at something...

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APQC Provides 3 LTV Case Studies

One of the common criticisms of lifetime value is that it has no practical applications. You and I know this is false, but some people still need convincing. The APQC formerly American Productivity and Quality Council) recently published “Insights into Using Customer Valuation Strategies to Drive Growth and Increase Profits from Aon Risk Services, Sprint Nextel, and a Leading Brokerage Services Firm,” which provides three mini-case histories that may help.Aon created profitability scorecards for 10,000 insurance customers. The key findings...

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Sources of Benchmark Studies

Somehow I found myself researching benchmarking vendors this morning. Usually I think of the APQC, formerly American Productivity and Quality Center, as the source of such studies. They do seem to be the leader and their Web site provides lots of information on the topic. But a few other names came up too. (I’ve excluded some specialists in particular fields such as customer service or health care.):Kaiser Associates Reset Group (New Zealand) Resource Services Inc. Best Practices LLC MarketingSherpa MarketingProfs Cornerstone (banking)...

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Is Marketing ROI Important?

You may have noticed that my discussions of marketing performance measurement have not stressed Return on Marketing Investment as an important metric. Frankly, this surprises even me: ROMI appears every time I jot down a list of such measures, but it never quite fits into the final schemes. To use the categories I proposed yesterday, ROMI isn’t a measure of business value, of strategic alignment, or of marketing efficiency. I guess it comes closest to the efficiency category, but the efficiency measures tend to be more simple and specific, such...

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Marketing Performance: Plan, Simulate, Measure

Let’s dig a bit deeper into the relationships I mentioned yesterday among systems for marketing performance measurement, marketing planning, and marketing simulation (e.g., marketing mix models, lifetime value models). You can think of marketing performance measures as falling into three broad categories: - measures that show how marketing investments impact business value, such as profits or stock price- measures that show how marketing investments align with business strategy- measures that show how efficiently marketing is doing its job (both...

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Marketing Planning and Marketing Measurement: Surprisingly Separate

As part of my continuing research into marketing performance measurement, I’ve been looking at software vendors who provide marketing planning systems. I haven’t found any products that do marketing planning by itself. Instead, the function is part of larger systems. In order of increasing scope, these fall into three groups:Marketing resource management: - Aprimo - MarketingPilot - Assetlink - Orbis Australian; active throughout Asia; just opened London office) - MarketingCentral - Xeed (Dutch; active throughout Europe)Enterprise...

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