Who influences the buying decisions of your customers? A study reveals the group you should be advertising to online.
Referrals from friends have a significant impact on typical buying behavior, an effect commonly known as social influence. Social influence is part of the reason so many marketers, as well as investors, get excited about the marketing potential within social media networks. However exciting the potential, marketers and investors still need to understand the relationship between social influence and online sales. What effect, if any, do friends have on one another’s buying decisions when engaging on a social network?
A study by Harvard Business School titled “Do Friends Influence Purchases in a Social Network?” addressed this question by using data gathered from a Korean social-media website called Cyworld. Cyworld contained a personal page format similar to Facebook and also allowed users to purchase virtual items to display on their pages through e-commerce. The study addressed the relationship between social influence and buying decisions between 208 randomly selected members in the study group. It also included the real impact on sales.
Do friends influence purchases on a social network?
The findings identified within the data set three main groups of users, which I refer to as the Normals, the Joneses, and the Hipsters. These findings are consistent with the middle-status conformity thesis, a sociological phenomenon that segments individuals into three groups on the basis of status within the community.
…to read this article in full, visit leading US small business resource, Inc.
