Because customer experiences will affect customer loyalty, these experiences will not only effect 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 (NAPS): Based on enliven-point scale on likelihood to recommend. Detractor I Passive I Promoter I NAPS = % 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 o 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 (NAPS), 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 he 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 Foretell (1992) states, “loyal customers are not necessarily satisfied customers, but satisfied customer tend to be loyal customer. ” Therefore, GE spent lots on testing customer satisfaction, from service quality to perceived value to predict the number of potential loyal consumer.All in all, it is obvious that the test which GE is using base on the recommendation item as well as convergent construct o test the customer loyalty. 4. What Is the operational definition of the construct? Operational definition of customer loyalty: customer loyalty defines the satisfaction of customer transform into promotion. It is measured by Net Promoter Score (classifies on an eleven-point scale of O to 10 how likely they would be to recommend GE to a friend) which targets Gee’s customers.
The red lines in the diagram below stand for operational definition. Regarding Churchill and laconic (2002), operational deflation defines how the construct Is to be measured. Adequately address the underlying construct. The purpose of the scale is creating a net-promoter score. It means that the answer should be standardization and the differences between different answers could be compared. However, the current scale does not meet the requirement. Firstly, there is no specific definition for ‘neutral’ point which stands for the meaning of ‘no attitude’.
While it may lead the further difference on statistics Anyway;ay, both these issues will reduce the validity of the result. Furthermore, it may decline the number of promoter directly and lower net-promoter-score consequently. 6. What level of measurement is being used in the research? Could a higher level have been used? GE uses NAPS which is based on interval scale (Fig) to measure customer loyalty. Interval scale contains the features of ordinal scale with the same interval between contiguous points and it has a random zero point (McDaniel ; Gates, 2010). The reasons that NAPS is interval level of measurement can be expressed as follow.First, NAPS has a scale from Tot 10; also, every number in this scale is different.
In addition, the numbers on the scale have an ascending order. As a result, NAPS has the characteristics of ordinal scale. Based on the above, NAPS has equal interval between adjacent points; therefore, it meets all features of interval scale. Fig 101234567 8 9 10 The higher level of interval scale is ratio scale to some extent. It has attributes of interval scale with an absolute zero(McDaniel ; Gates, 2010). However, ratio scale is not necessary applied in this research and there are the causes below.