NPS spillover in brand extensions: An empirical study

Abstract

This research proposes an empirical framework to help firms understand to what degree the transaction-specific Net Promoter Scores (NPS) spill over and affect customer spending across multiple product categories under the same parent brand. The proposed framework is applied to novel individual-level, cross-sectional, and time-series NPS ratings matched with transaction details from a leading lifestyle conglomerate in the Middle East. Findings provide strong support for the presence of the NPS spillover in brand extensions and show that the spillover is moderated by customer learning both within and across categories. The theoretical and managerial implications of these findings are discussed.