Marketing Research
1. What is the construct that GE is trying to measure?
GE Company is trying to use Net promoter score (NPS) to measure customer loyalty. According to Bhote (2000), customer loyalty indicates customers are delighted with a company’s products or services and turn into enthusiastic world-of-mouth advertisers. In general, customer loyalty can be expressed in different aspects. Here GE’s primary focus is on recommendation. Through measuring this construct, GE is able to know whether the clients would recommend GE’s service to others. Because customer experiences will affect customer loyalty, these experiences will not only affect the buying behavior of the original customers but also their likelihood of sharing these experiences to others. Therefore, GE tries to use customer loyalty to predict the future market share which is induced by the loyal customer.
Net promoter score (NPS): Based on aneleven-point scale on likelihood to recommend. 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Detractor | Passive | Promoter |
NPS = % of Promoter - % of Detractor
2. How might GE assess construct validity?
The way for GE to assess its construct validity is asking the possibility for its customer to recommend and using a convergent construct of customer satisfaction to test its construct of customer loyalty.
It is general accepted that behavior like recommending products to others is a benefit which created by customer loyalty. In the Net-promoter score (NPS), customer were asked to rated the scale of the likelihood of being a representative of GE. The higher the score is, the more customers would willing to recommend GE`s products. The result of the test can show us whether those consumers are loyal to the company or not and the possibility for them to be the representative to turn others get in touch of GE products.
Because customer satisfaction might affect loyalty, thus, GE uses customer satisfaction to measure its customer loyalty. As Fornell (1992) states, “loyal
GE Company is trying to use Net promoter score (NPS) to measure customer loyalty. According to Bhote (2000), customer loyalty indicates customers are delighted with a company’s products or services and turn into enthusiastic world-of-mouth advertisers. In general, customer loyalty can be expressed in different aspects. Here GE’s primary focus is on recommendation. Through measuring this construct, GE is able to know whether the clients would recommend GE’s service to others. Because customer experiences will affect customer loyalty, these experiences will not only affect the buying behavior of the original customers but also their likelihood of sharing these experiences to others. Therefore, GE tries to use customer loyalty to predict the future market share which is induced by the loyal customer.
Net promoter score (NPS): Based on aneleven-point scale on likelihood to recommend. 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | Detractor | Passive | Promoter |
NPS = % of Promoter - % of Detractor
2. How might GE assess construct validity?
The way for GE to assess its construct validity is asking the possibility for its customer to recommend and using a convergent construct of customer satisfaction to test its construct of customer loyalty.
It is general accepted that behavior like recommending products to others is a benefit which created by customer loyalty. In the Net-promoter score (NPS), customer were asked to rated the scale of the likelihood of being a representative of GE. The higher the score is, the more customers would willing to recommend GE`s products. The result of the test can show us whether those consumers are loyal to the company or not and the possibility for them to be the representative to turn others get in touch of GE products.
Because customer satisfaction might affect loyalty, thus, GE uses customer satisfaction to measure its customer loyalty. As Fornell (1992) states, “loyal