Tempting Fate: Social Media Posts by Firms, Customer Purchases, and the Loss of Followers

50 Pages Posted: 17 Jul 2017 Last revised: 7 May 2018

See all articles by Shuting Ada Wang

Shuting Ada Wang

Baruch College, City University of New York

Brad N Greenwood

George Mason University - George Mason University

Paul A. Pavlou

University of Houston - C.T. Bauer College of Business

Date Written: July 10, 2017

Abstract

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

Wang, Shuting Ada and Greenwood, Brad 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 or http://dx.doi.org/10.2139/ssrn.2999804

Shuting Ada Wang

Baruch College, City University of New York ( email )

One Bernard Baruch Way
New York, NY 10010
United States

Brad Greenwood (Contact Author)

George Mason University - George Mason University ( email )

VA 22030
United States

Paul A. Pavlou

University of Houston - C.T. Bauer College of Business

Houston, TX 77204-6021
United States

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