Net promoter score: a conceptual analysis

Net promoter score (NPS) was introduced by Frederick Reichheld in the year 2003. It has been claimed that companies need to keep track of only their individual NPSs and this one number would determine customer loyalty and the growth rate of the companies. Several academicians and researchers have argued about the validity of NPS as the only factor that determines the company growth rates. The analysis of NPS can be done from both empirical perspective and conceptual perspective. An analysis of NPS from the conceptual perspective based on Reichheld's original paper has been attempted. It is evident from the analysis that NPS only gives a particular direction to increase the company growth rate and is not the only factor that determines it. Several other factors might be there that influence the company growth rate.