Net Promoter Reliability "Oversold"
Net Promoter is a widely used customer loyalty metric that bills itself as the "single most reliable indicator" of a company's ability to grow. However, new research shows that claims of the measure's superiority in predicting growth are false. These findings have significant implications for companies that use the metric to manage their businesses, including GE, Allianz, Schwab, Intuit and American Express.
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Customer Satisfaction and Share of Wallet
Empirical research has suggested a strong link between customer satisfaction and share of wallet across a variety of industries. But does this link stand up to statistical scrutiny? Yes. However, the impact differs according to customer segment. Simply treating all customers as homogeneous has the potential to misrepresent the relationship between the two.
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Social Responsibility as a Corporate Strategy
Does corporate social responsibility make good business sense? Can it create win-wins? One noted expert suggests that there is more than one way to maximize shareholder value. For example, instead of spending over $200 million to put their name on a stadium, a company might obtain as much brand awareness value by investing that money in ways that would provide additional social value.
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Loyalty and Socially Responsible Investing
Socially responsible mutual funds increasingly attract both institutional and individual investors. But, does bottom-line performance trump loyalty to corporate social responsibility? Research shows that, from month to month, cash flows to and from SR funds are less volatile than those of other funds as investors are more likely to leave their SR investments in place even if the fund's performance lags behind that of conventional counterparts.
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Foreign Exchange Risk of Firms in Asia-Pacific
New research has identified significantly greater exposure to fluctuations in exchange rates for firms throughout the Asia-Pacific region when compared to firms in large, Western, industrialized economies. Given the potentially devastating impact of such exposure on a company's assets or debt, the findings indicate a need for increased company hedging and greater government awareness of foreign currency risk in these emerging markets.
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Political Connections and Corporate Bailouts
Companies with political connections are almost three times as likely to receive financial assistance from their governments. But do these connections and financial infusions pay off in the long run? Not necessarily. Both before and after their bailouts, companies with connections underperformed matching firms in similar circumstances.
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