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Contribution Details
Type | Master's Thesis |
Scope | Discipline-based scholarship |
Title | The importance of social effects for service usage - re-engaging inactive customers |
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Institution | University of Zurich |
Faculty | Faculty of Business, Economics and Informatics |
Number of Pages | 37 |
Date | 2017 |
Abstract Text | Social learning is known to influence adoption as well as churn behavior. Recent research raises the question to what extent these social effects influence customer engagement. We analyze the impact of peer behavior on the likelihood of continued usage of a non-contractual pay-per-use service. In contrast to products, services are subject to quality variations and consumer learning is slow. To lower this uncertainty of consumption, individuals search for further information and are susceptible to social learning. We further assess how the susceptibility to effects of social learning changes with usage inactivity. Due to quality variations and service updates, usage inactivity deteriorates private information. It increases the uncertainty how past service experience depicts current service quality. Thus, usage inactivity strengthens the susceptibility to social influence. Our results show that marketing tools, that leverage social learning, have the potential to stimulate continued service usage and re-engage inactive customers. Furthermore, the susceptibility to social learning is increasing with usage inactivity up to a certain point. However, after 12 months of inactivity customers have lost any interest in the service and do not react to peer behavior anymore |
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