Social Networks and Online Communities – Managing User Acquisition, Activation and Retention

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Social Networks and Online Communities – Managing User Acquisition, Activation and Retention TECHNISCHE UNIVERSITÄT MÜNCHEN Lehrstuhl für Dienstleistungs- und Technologiemarketing Social Networks and Online Communities – Managing User Acquisition, Activation and Retention Patrick Rohrmeier Vollständiger Abdruck der von der Fakultät für Wirtschaftswissenschaften der Technischen Universität München zur Erlangung des akademischen Grades eines Doktors der Wirtschaftswissenschaften (Dr. rer. pol.) genehmigten Dissertation. Vorsitzende: Univ.-Prof. Dr. Isabell M. Welpe Prüfer der Dissertation: 1. Univ.- Prof. Dr. Florian von Wangenheim 2. Prof. Dr. René Algesheimer, Universität Zürich / Schweiz Die Dissertation wurde am 27.12.2011 bei der Technischen Universität München eingereicht und durch die Fakultät für Wirtschaftswissenschaften am 02.05.2012 angenommen. I Summary Online social communities are among the most visited websites on the Internet. Although there has been enormous growth in the past years, these online venues operate in an increas- ingly saturated market with fierce competition. Community operators fight for active users, who interact and share content with other users. In order to ensure long-term success, com- munity operators need to keep a sufficient number of active users in their community. Thereby, community managers are concerned with three challenges: the acquisition of new users, the activation of their members (making them contribute more), and the retention of the existing users. Despite past research on online social communities and the broad interest in social influ- ence across different disciplines, surprisingly little is known about how the users’ social struc- tural context affects participation in online communities. Because users share relationships with each other and interact in the community, it is of specific interest to understand how these relationships and the position of the users in the overall online network influence their behavior. Therefore, the present dissertation provides an empirical investigation of the effects of the social context on the users’ perceptions, active participation behavior and loyalty to the online community. Because managing user acquisition, activation and retention is an impor- tant task for community managers, these different facets are examined in three empirical stud- ies. Study 1 investigates how users coming from different interpersonal acquisition channels differ in their attitudes towards the community and their behavior. Study 2 observes the effect of the users’ social structural context, attitudes and motivations on their active participation in the community. Study 3 is concerned with the effect of the user’s position and engagement in the online network on the decision to leave the online community. Study 1 demonstrates that users coming from different interpersonal acquisition channels differ in their attitudes and behavior. The study reveals that receivers of word-of-mouth show more favorable attitudes and behavior towards the online community than users acquired by firm-initiated personal selling activities. Word-of-mouth referred users can identify more with the community, provide more recommendations to other people to use the community and show higher participation behavior on the platform than those coming from personal selling. Moreover, a differentiation in online and offline word-of-mouth recommendations reveals that II offline-referred users are more beneficial for the online community than online-referred users. Offline-referred users are more satisfied with the community, provide more offline recom- mendations and participate more compared to users who received online referrals. The social relationship between the sender and the receiver of the marketing message is of particular relevance to understand these effects. Nevertheless, the study also shows that these channel differences are partly explained by the users’ different motives to use the community. Word- of-mouth referred users in general, and offline-referred users in particular, are more driven by social needs. This affects their attitudes and behavior towards the platform. This knowledge on interpersonal acquisition channels helps community operators to better understand what kinds of users are attracted and how to use different acquisition channels to build a balanced customer portfolio. Study 2 provides insights on the drivers of active user participation, which is described by the active contribution to the community and interaction with other users. Based on social capital theory, it is demonstrated that both structural and attitudinal factors influence user be- havior. The position of the user in the network, for example how central he is to other users, affects his active participation. Users with many contacts and users whose contacts do not share many relationships with each other participate more. In addition, meeting many of the online contacts in the offline world leads to less participation. Further, attitudinal factors yield additional insights, influencing participation in combination with objective network data. Here, satisfaction and identification with the community are found to be important drivers of active user behavior. Importantly, the study also shows that users with different motivations are affected differently in their participation. It is therefore critical to understand what types of users exist in the community and how they are motivated to use the platform. Overall, it is observed that the individuals’ network structures play an important role in explaining partici- pation behavior across different user groups. Study 3 investigates user retention. Because the online community market becomes more saturated, it is more important for community managers to retain their users to keep a critical mass using the community. This study demonstrates that the user’s network position, the con- figuration of the user’s network of contacts and the engagement of the user in the online community influence the likelihood of defection. The results show that users with a central position and a close network of friends stay longer in the community. In addition, a lower share of contacts who already left the platform and a lower number of contacts from the same III region and of the same gender lead to a higher likelihood that the focal user stays in the online social community. The users’ active participation and being a verified member also affect loyalty. These are important insights for community managers because they help to assess the user’s risk of leaving the community and take measures to keep them using the platform. In- terestingly, some of the effects decrease over time, which has important implications for community management and the timing of marketing actions. Overall, the present dissertation shows that the social context and the relationships to other users of the online network contribute to a better understanding of user behavior. The results suggest that community operators make use of structural and attitudinal data in order to build a strategic online community management. Based on this information, specific marketing measures should be developed to acquire, activate and retain users. First, users should be stimulated to provide word-of-mouth recommendations to other people. Nevertheless, com- munity managers should use different interpersonal acquisition channels to attract a balanced customer portfolio consisting of different types of users in order to reduce the risk of being dependent on just one user group. Second, community managers should use structural and at- titudinal data to personalize information for individual users on the platform and help them to integrate better in the online network. This data also helps to identify the most important users and evaluate the risk of leaving the community. Theoretically, this dissertation underlines the value of social relationships for user behav- ior. Social capital and related social concepts can help to better understand both structural and attitudinal aspects in online social communities. The different facets and dimensions of social relationships and social capital, which are investigated in the three empirical studies, are linked to develop an integrated understanding of how social capital and user behavior works in online social communities. IV Acknowledgements The work at hand was accepted as doctoral thesis by the Technische Universität München in spring 2012. It was a long journey until I held the final version of this dissertation in my hands. However, it was a challenging, enriching and fun time thanks to all my mentors, peers, colleagues and research partners. I had the pleasure to work together with skilled and helpful people, always good for advice and deep topical discussions. First, I would like to thank my PhD advisor, Prof. Florian von Wangenheim, for accepting me as a doctoral candidate at the chair for service and technology marketing. He continuously provided constructive support by challenging my ideas and opening up new ways to think about scientific issues. His timely feedback was valuable throughout all phases of the disserta- tion. Without his advice, the dissertation would not be what it is today. I also want to thank Prof. René Algesheimer, my second supervisor, for fruitful discussions and comments, his great expertise and support in bringing the empirical and theoretical work one step further. Our first meeting helped to shape the focus of my dissertation and his continuous feedback always helped to improve my thesis. Many thanks go to Prof. Isabell
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