39 Pages Posted: 17 Jul 2017 Last revised: 9 Aug 2017
Date Written: July 10, 2017
Although firms actively post messages on social media to strategically promote their products, limited empirical work has examined the long-term benefits and risks of pursuing such social media strategies. In this study, we examine how a firm’s social media posts influence the propensity of its followers to purchase a product in response to the post or to unfollow the firm, both in the short and in the long term. Using a unique dataset from a fashion retailer, we find that while social media posts do increase the retailer’s sales by 5% in the short-term, they also increase the followers’ propensity to unfollow the firm by 300%. Strikingly, results also indicate that social media posts cannibalize long-term cumulative sales (despite the boost in short-term sales). Finally, we find that the role of social media posts in unfollowing and sales is moderated by the environment in which the follower receives the social media post. Notably, the negative effects of posts on unfollowing and sales are exacerbated in more crowded cities and during peak traffic hours. The study contributes to the IS literature on social media and informs managerial practice on how to leverage social media posts for enhancing sales and preventing the loss of followers.
Keywords: social media, fan pages, social media posting, purchase, unfollow, crowd, population density, peak traffic hours
Suggested Citation: Suggested Citation
Wang, Shuting and Greenwood, Brad N. and Pavlou, Paul A., Tempting Fate: Social Media Posts by Firms, Customer Purchases, and the Loss of Followers (July 10, 2017). Fox School of Business Research Paper No. 17-022. Available at SSRN: https://ssrn.com/abstract=2999804