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Experience, socialization and customer retention: Lessons from the dance floor

Giudicati, Gianna and Riccaboni, Massimo and Romiti, Anna Experience, socialization and customer retention: Lessons from the dance floor. Marketing Letters, 24. pp. 1-14. ISSN 0923-0645 (2013)

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Experience and socialization are key factors in customer commitment and defection decisions. To study the effect of experience and social relationships on customer retention, we analyze a reality-mined co-presence network of health club members over a period of 4 years. Since central customers in the network have more social ties they will lose if they defect, we use centrality as a proxy for customer relationship switching costs. We find that long-standing customers do have a lower chance of renewing their contracts. However, in line with theoretical predictions (Burnham et al., Journal of the Academy of Marketing Science 31(2):109–126, 2003), the consumer’s centrality in the network (reflecting a social cost of defection) reduces customer churn rate. This study’s results indicate that the inclusion of social effects increases the predictive power of the customer churn model (Nitzan and Libai, Journal of Marketing 75(6):24–38, 2011), thus contributing to our understanding of the role social networks play in customer decisions.

Item Type: Article
Identification Number: 10.1007/s11002-013-9233-6
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Research Area: Economics and Institutional Change
Depositing User: Ms T. Iannizzi
Date Deposited: 02 Apr 2013 08:02
Last Modified: 02 Apr 2013 08:02
URI: http://eprints.imtlucca.it/id/eprint/1539

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