High Correlation between Net Promoter Score and Evolution of Consumer’s Willingness to Pay (Empirical Evidence from European Mobile Markets)

Abstract

This paper shows that the correlation between the Net Promoter Score and consumers Willingness To Pay in five European mobile markets is very strong. The Net Promoter Score is provided by a survey and the Willingness To Pay is calculated from the “Spokes Model” which is an economic model based on horizontal differentiation among firms. The model input data (firms’ revenues, number of subscribers and profits) are provided by the Merill Lynch, Bank of America. The well known correlation between Net Promoter Score and Revenues is weaker and arises from the previous one. Same goes for the correlation between Net Promoter Score and Profits.

Keywords: Net Promoter Score, recommend intention, customer satisfaction, consumer's Willingness to Pay

JEL Classification: D11, D43, L13, L96, M31