Increasing the Odds of Survival: How Peer Influence and Reward Programs affect Customer Churn in Social Networks
Type
working paper
Date Issued
2018-01
Author(s)
Abstract
Customer churn is a severe threat for firms operating online social networks. While prior research highlighted the role of peer influence for examining churn in social networks, little is known about the underlying network e ects accounting for this relationship and how firms can proactively prevent churn resulting from peer influence. Combining research on self-determination theory and social networks, I examine to which degree network e ects on an individual and group level a ect churn and how di erent types of reward programs can be used to manage churn. Based on longitudinal field data from a large-scale social network, my results indicate that exposure toward already defected peers has a positive influence on churn, whereas interconnectedness with remaining peers has a negative influence on churn. Furthermore, I show that gamified rewards (i.e., “earning” a reward) as opposed to monetary rewards (i.e., merely receiving a reward) decrease customer churn and moderate the e ects of peer influence. Specifically, gamified rewards attenuate the positive influence of exposure and facilitate the negative influence of interconnectedness on churn. These findings contribute to our current understanding of customer churn in social networks and provide practitioners with implications on how to increase social networks’ odds of survival.
Language
English
Keywords
Churn
Social Networks
Exposure
Interconnectedness
Gamified Rewards
Monetary Rewards
Hazard Models
Managerial Simulation
HSG Classification
contribution to scientific community
HSG Profile Area
Global Center for Customer Insight
Subject(s)
Division(s)
Contact Email Address
axel.berger@unisg.ch
Eprints ID
255538
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Name
Odds_of_Survival.pdf
Size
916.69 KB
Format
Adobe PDF
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