Referrals · Randomized field experiment in a social network
Do Your Online Friends Make You Pay? A Randomized Field Experiment on Peer Influence in Online Social Networks
Management Science · 2015
Summary
An adopting friend increased the odds of buying the paid service by more than 60% in the study.
For your marketing
Possible founder application
If paid adoption is socially visible in your product, measure peer exposure as a possible conversion mechanism. Avoid assuming that adding a referral prompt reproduces the network effect studied here.
Reported result
What the study found
An adopting friend increased the odds of buying the paid service by more than 60% in the study. Relative influence was stronger for users with fewer friends.
Research question
What the authors investigated
Does a friend's adoption of a paid service causally affect another user's decision to pay?
Design
Randomized field experiment that exogenously induced adoption of a paid service among users in a large online social network; results were checked with several statistical approaches.
Sample and setting
The general population of users on a large social network with a freemium service; the publisher abstract does not state the sample size.
Scope and transfer
Limitations to keep in view
One freemium social network and paid feature. Network structure and visible peer adoption are central to the mechanism and may be absent in many SaaS products.
Research sources
INFORMS publisher abstract retrieved with Firecrawl; detailed sample and full methods were not available in the abstract.