<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The adoption of new behaviors or new products is often influenced by those closest to us, but customer churn is influenced by social factors as well. An analysis of 1 million customers of a cellular company showed that customers were 79.7 % more likely to defect for each time one of their social neighbors defected. The more a customer communicated with a neighbor and the more characteristics they shared, such as age, gender or status, the more likely the customer was to follow the neighbor in canceling the service. The effect of a neighbor’s defection on a focal customer’s hazard of defection was strongest within the first month and decreased over time. The study shows that companies should take customers’ social networks into account when attempting to predict and manage customer churn. Network-related information can substantially improve analysis of new product adoption, and the same seems true for the field of customer defection.</p></abstract>

The adoption of new behaviors or new products is often influenced by those closest to us, but customer churn is influenced by social factors as well. An analysis of 1 million customers of a cellular company showed that customers were 79.7 % more likely to defect for each time one of their social neighbors defected. The more a customer communicated with a neighbor and the more characteristics they shared, such as age, gender or status, the more likely the customer was to follow the neighbor in canceling the service. The effect of a neighbor’s defection on a focal customer’s hazard of defection was strongest within the first month and decreased over time. The study shows that companies should take customers’ social networks into account when attempting to predict and manage customer churn. Network-related information can substantially improve analysis of new product adoption, and the same seems true for the field of customer defection.

If You Go, I Will Follow … Social Effects on the Decision to Terminate a Service

Assistant Professor of Marketing, Recanati Business School, Tel Aviv University, Tel-Aviv, Israel,

Associate Professor, Arison School of Business, Interdisciplinary Center, Herzliya, Israel

NIM Marketing Intelligence Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The adoption of new behaviors or new products is often influenced by those closest to us, but customer churn is influenced by social factors as well. An...

If You Go, I Will Follow … Social Effects on the Decision to Terminate a Service

Published Online: Jul 16, 2014

Page range: 40 - 45

DOI: https://doi.org/10.2478/gfkmir-2014-0016

© 2014

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.