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J·BJon BishopIndependent growth marketer

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

Ravi Bapna, Akhmed Umyarov

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.

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