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

39 Pages Posted: 17 Jul 2017 Last revised: 9 Aug 2017

Shuting Wang

Temple University

Brad N. Greenwood

University of Minnesota - Twin Cities - Carlson School of Management

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

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 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

Shuting Wang

Temple University ( email )

Philadelphia, PA 19122
United States

Brad Greenwood (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Paul Pavlou

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

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