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The importance of social embeddedness

Benedek, Gábor and Lublóy, Ágnes and Vastag, Gyula (2014) The importance of social embeddedness. DECISION SCIENCES, 45 (1). pp. 175-201. ISSN 0011-7315

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Abstract

This article argues the importance of social embeddedness at mobile providers by exam- ining the effects of customers’ network topological properties on churn probability—the probability of a customer switching from one telecommunication provider to another. This article uses data from regional snowball sampling—the only practically feasible network sampling method—to identify groups with significantly different churn ratios for customers with different network topological properties. Clear evidence indicates that individual network characteristics (node-level metrics) have considerable impact on churn probabilities. The inclusion of network-related measures in the churn model allows a longer-term projection of churners and improves the predictive power of the model. With no possibility to carry out repeated sampling, sample stability was checked through simulation results. On the one hand, this article highlights the importance and effectiveness of the provider’s tailored marketing campaigns by showing that customers targeted by direct marketing campaigns are less threatened by churn than nontargeted customers. On the other, this article shows that social embeddedness blocks the impact of the very same marketing efforts. This article forwards the idea that social embeddedness, also prevalent in vendor switching, can be extended to understanding the development of professional societies threatened by membership churn. [Submitted: January 12, 2012. Revised: July 30, 2012; March 31, 2013. Accepted: April 12, 2013.]

Item Type: Article
Subjects: H Social Sciences / társadalomtudományok > HB Economic Theory / közgazdaságtudomány
SWORD Depositor: MTMT SWORD
Depositing User: MTMT SWORD
Date Deposited: 22 Jul 2015 14:55
Last Modified: 22 Jul 2015 14:55
URI: http://real.mtak.hu/id/eprint/25490

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