The Impact of Customer Community Participation on Customer Behaviors: An Empirical Investigation

Abstract

Many firms increasingly offer community venues to their customers to facilitate social interactions amongst them. Prior studies have shown that community participants have high engagement and loyalty toward the firm, and provide useful feedback and referrals. However, it is not clear whether community participants are the firm’s fans to begin with and self-select themselves into the community, or whether community participation leads to increased relational customer behaviors. In the current research, we employ data from a field experiment to help answer this question. The data comes from a year-long study, conducted by eBay Germany, and reveals that a simple email invitation significantly increased customer participation in the firm’s community. Results also showed that community participation had mixed effects on customers’ likelihoods of participating in buying and selling behaviors. Community participation did not translate into increased behaviors as would be commonly expected. While there is no impact of participation on the number of bids placed or the revenue earned, there is a negative impact of participation on the number of listings and the amount spent. Together, these results suggest that the community participants become more selective and efficient sellers and also become more conservative in their spending on the items they bid for. The results also show that customer community marketing programs may be targeted to a broader set of the firm’s customers than just the fans.

Keywords: Customer community, online social interactions, customer relationship management, Hierarchical Bayes, MCMC, Multivariate Tobit