Social Promoter Score (SPS) and Review Network: A Method and a Tool for Predicting Financial Health of an Online Shopping Brand

TL;DR

This paper introduces the Social Promoter Score (SPS), a novel method combining customer loyalty and influence within review networks to better predict an online brand's future sales and financial health.

Contribution

The paper proposes a new review network-based influence measure and a combined loyalty-influence score, improving prediction of brand financial health over traditional methods.

Findings

SPS outperforms baseline Net Promoter Score in predicting future sales.

Influence and loyalty metrics correlate with product sales within 1-5 months.

Review network centrality effectively captures customer influence.

Abstract

The conventional way of summarizing ratings or sentiment of reviews of customers on products of an online shopping brand are not sufficient to evaluate the financial health of that brand. It overlooks the social standing and influence of individual customers. In this paper, we have proposed a tool named as Review Network for measuring the influence of customers in online merchandise sites like Amazon.com. Using this measured influence, we have proposed a method that evaluates loyalty of customers of a brand based on their ratings and sentiments of their reviews collected from online merchandise sites. Review network of a brand is built from all the reviews of all the products from that brand where nodes are customers and an edge is created if a customer becomes a potential reader of a review written by another customer. The centrality of a customer in that review network represents her influence. Our proposed method named as Social Promoter Score combines loyalty and centrality of all customers of a brand. We have compared our method with a baseline approach based on the concept of Net Promoter Score . We have applied Social Promoter Score on Amazon.com review data set of some well-known brands. Results show that Social Promoter Score predicts financial health of a brand in terms of future sales much better than baseline method. We have noticed that in general effects of Social Promoter Score reflect on the product sales in one to five months.