There is now a growing body of evidence showing that mobile consumer’s decisions are influenced by their social network. Here is another recent research paper that shows how: “The probability that a customer selects a mobile phone company increases with the number of members of her social network already subscribed to that firm”. The findings are significant at the 0.01 level.
So what?
Although it is easy in hindsight to say this finding is very logical and intuitive, nonetheless it is good to have some reproducible research backing up the intuition. For marketers, the implications are clear. In retention, you can use SNA to first isolate the social network of each subscriber, then improve your churn predictions by adding SNA derived variables regarding %-of-network-that-is-offnet.
In acquisition, trying to get competitor’s subscribers to switch, marketers can use member-get-member type promotions. The target campaign list in this case would be SNA based as follows: use Sonamine to find communities in your current calling base. For these communities, identify ones where your network constitutes the bulk of the community. These communities are the ones you should target for member get member campaigns.
Caveats: this study was done in a saturated mobile market with over 100% penetration. The results will likely be different in less saturated markets.
Details
The study was conducted using a sampling methodology in a Spanish university. The sample was pretty small, 221. But for each data point, a detailed questionnaire was answered by the student. This way, there was very accurate data on the % of each subscriber’s social network that were customers of the 3 big Spanish mobile operators (Orange, Movistar and Vodafone). The authors then created a model equation with the variables representing the key drivers.
One intriguing finding is that postpaid customers were significantly more likely to switch operators than prepaid customers! (p<0.01)
Reference
The role of (personal) network effects and switching costs in determining mobile users’ choice. Juan Pablo Maicas, Yolanda Polo, Francisco Javier Sese. Journal of Information Technology (2009) 24, 160–171.
