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I’ll Have What She’s Having

Modern businesses from retail to health care and everything in between must allocate their marketing dollars across a multitude of channels, from mail and traditional media to websites and apps. Recent research about consumer adoption of new sales channels indicates that marketing campaigns focused on social media and socioeconomic groupings are helpful not just for disruptive new channels but also for traditional venues. Companies that do not sell products or services online can benefit just as much from social media marketing as those that do.

Tolga Bilgicer, PhD

Tolga Bilgicer

Kamel Jedidi, PhD

Kamel Jedidi

Tolga Bilgicer, PhD, associate at Cornerstone Research, and his three co-authors explored multiple aspects of channel adoption by gathering 8 years of data gathered from a well-established U.S. catalog retailer of apparel and durable goods. During that period, from 1997 to 2004, the firm launched its Internet channel and added a new physical store. Bilgicer, along with co-authors Kamel Jedidi, PhD, John A. Howard Professor of Business at Columbia Business School; Donald R. Lehmann, George E. Warren Professor of Business and chair of the Marketing Division at Columbia Business School; and Scott Neslin, PhD, Albert Wesley Frey Professor of Marketing at the Tuck School of Business, Dartmouth College, published the results in an article titled “Social Contagion and Customer Adoption of New Sales Channels,” which was recently published in the Journal of Retailing.

Donald R. Lehmann

Donald R. Lehmann

Scott Neslin, PhD

Scott Neslin

They determined that social influences such as word of mouth and other social media play a major role in the adoption of new-to-the-world sales channels; that in adopting a new channel, consumers behave like others who are geographically close or who are in their socioeconomic group; that customers of longer standing are less likely to be influenced by others; and that the influence of like-minded or similar peers plays a greater role in customers’ trying a digital sales channel than visiting a new physical location.

The work has several important implications for marketers. Because newer customers are highly susceptible to social influences, the findings suggest that marketers may want to leverage that influence via incentives offered to longer-term customers – for instance, according to Bilgicer, “A firm could send these customers an email with a promotion code they could pass along to someone who has not yet downloaded the firm’s new app, so that when the friend uses the promotion code in downloading the app, the longer-tenured customer also receives a reward.”

Reference:

Bilgicer T, et al. J Retailing. 2015. doi:10.1016/j.jretai.2014.12.006.

Disclosure: The authors report no relevant financial disclosures.

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