Advocacy Loyalty Index (ALI) and Purchasing Loyalty Index (PLI)
Posted by Jeffrey Henning on Wed, Jul 22, 2009

Business Over Broadway (BOB) developed two loyalty indices by analyzing the results from two satisfaction surveys that included eight satisfaction and loyalty questions:
- Overall satisfaction
- Likelihood to choose again for the first time
- Likelihood to recommend
- Likelihood to continue purchasing same products/services
- Likelihood to purchase different products/services
- Likelihood to increase purchase size
- Likelihood to increase frequency of purchasing
- Likelihood to switch to a different provider
BOB than conducted a factor analysis on the results to determine which of three types of loyalty a question would better measure:
- Advocacy Loyalty—reflecting the degree to which customers will recommend the company to others
- Purchasing Loyalty—reflecting the degree to which customers will increase their purchasing behavior
- Defection Loyalty—reflecting the degree to which customers will switch to a different company
This factor analysis showed which factor each question best fit with:
| | Advocacy Loyalty | Purchasing Loyalty | Defection Loyalty |
| Overall satisfaction | X | | |
| Likelihood to choose again for the first time | X | | |
| Likelihood to recommend | X | | |
| Likelihood to continue purchasing same products/services | X | | |
| Likelihood to purchase different products/services | | X | |
| Likelihood to increase purchase size | | X | |
| Likelihood to increase frequency of purchasing | | X | |
| Likelihood to switch to a different provider [scale reversed for analysis] | | | X |
Each index is calculated simply by averaging the rating of each component. Since no benchmark information is provided, you are free to use
whichever scales you find appropriate. Unfortunately, the original BOB scales use a 0-10 bipolar scale for satisfaction and 0-10 unipolar scale for likelihood.
Add this to the growing body of research that shows that
likelihood to recommend is not a unique measure of advocacy.
Two counterintuitive findings from the research:
- Overall satisfaction was found to be a factor of loyalty, despite significant research into how satisfaction and loyalty can differ. That said, part of the disconnect can be explained by the fact that satisfaction contributes primarily to one type of loyalty: advocacy rather than purchasing loyalty.
- The likelihood to repurchase the same products was less an indicator of purchasing loyalty than it was of advocacy loyalty.