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

Nitzan Irit () and Libai Barak ()
Additional contact information
Nitzan Irit: Assistant Professor of Marketing, Recanati Business School, Tel Aviv University, Tel-Aviv, Israel
Libai Barak: Associate Professor, Arison School of Business, Interdisciplinary Center, Herzliya, Israel

NIM Marketing Intelligence Review, 2013, vol. 5, issue 2, 40-45

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.

Keywords: Customer Retention; Customer Churn; Churn Prevention; Social Network (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.2478/gfkmir-2014-0016 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:gfkmir:v:5:y:2013:i:2:p:40-45:n:7

DOI: 10.2478/gfkmir-2014-0016

Access Statistics for this article

NIM Marketing Intelligence Review is currently edited by Christine Kittinger-Rosanelli

More articles in NIM Marketing Intelligence Review from Sciendo
Bibliographic data for series maintained by Peter Golla ().