Abstract

http://ssrn.com/abstract=1984350
 
 

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Social Dollars: The Economic Impact of Customer Participation in a Firm-Sponsored Online Customer Community


Puneet Manchanda


University of Michigan, Stephen M. Ross School of Business

Grant M. Packard


Laurier School of Business & Economics

Adithya Pattabhiramaiah


Scheller College of Business, Georgia Institute of Technology

September 22, 2014

Forthcoming, Marketing Science

Abstract:     
Many firms operate customer communities online. This is motivated by the belief that customers who join the community become more engaged with the firm and/or its products, and as a result, increase their economic activity with the firm. We describe this potential economic benefit as “social dollars.” This paper contributes evidence for the existence and source of social dollars using data from a multi-channel entertainment products retailer that launched a customer community online. We find a significant increase in customer expenditures attributable to customers joining the firm's community. While self-selection is a concern with field data, we are able to rule out multiple alternative explanations. Social dollars persist over the time period observed and arose in both online and offline channels. To assess the source of the social dollar, we hypothesize and test whether it is moderated by participation behaviors conceptually linked to common attributes of customer communities. Our results reveal that posters (vs. lurkers) of community content and those with more (vs. fewer) social ties in the community generated more (fewer) social dollars. We found a null effect for our measure of the informational advantage expected to accrue to products that differentially benefit from content posted by like-minded community members. This overall pattern of results suggests a stronger social than informational source of economic benefits for firm operators of customer communities. Several implications for firms considering investments in and/or managing online customer communities are discussed.

Number of Pages in PDF File: 52

Keywords: Online Customer Communities, Online Customer Behavior, Social Networks, User-Generated Content, Retailing, Field Data

JEL Classification: M31, M3

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Date posted: January 13, 2012 ; Last revised: September 23, 2014

Suggested Citation

Manchanda, Puneet and Packard, Grant M. and Pattabhiramaiah, Adithya, Social Dollars: The Economic Impact of Customer Participation in a Firm-Sponsored Online Customer Community (September 22, 2014). Forthcoming, Marketing Science. Available at SSRN: http://ssrn.com/abstract=1984350 or http://dx.doi.org/10.2139/ssrn.1984350

Contact Information

Puneet Manchanda (Contact Author)
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-936-2445 (Phone)
734-936-8716 (Fax)
Grant M. Packard
Laurier School of Business & Economics ( email )
75 University Ave West
Waterloo, ON
Canada
Adithya Pattabhiramaiah
Scheller College of Business, Georgia Institute of Technology ( email )
800 W Peachtree St NW,
#4216
Atlanta, GA GA 30309
United States
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