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Improving customer retention for a social networking service

Kleiboer, Vincent (2015) Improving customer retention for a social networking service.

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Abstract:To evaluate the customer journey on social networks, the lifecycle of users on the network can be modelled by customer lifecycle models. A first mention in literature of a customer lifecycle was by Ford (1980). Although he didn’t use the term customer lifecycle specifically, he evaluated the customer relationship and how this changed over time. The fundamental work underlined the importance of establishing, understanding and developing the relationship with customers over time. In this research it is investigated what motivates users of social networking sites throughout the user lifecycle. This is done by using the AARRR-model to define the user lifecycle. This model cuts the user lifecycle in 5 stages: Acquisition, Activation, Retention, Referral and Revenues (McClure, 2007). Measuring the performance in each of these stages can measure the effects and steer the organizations continuous improvements. To help StructWeb, a social platform where this research is conducted, optimize their performance, the motivations of users in the first four of the five AARRR-steps are examined. The revenues step was left out of the scope, because it is reasoned that this is a logical result of active, retained users in combination with a revenue model. This makes the motivations of users important in the first 4 stages. Proposed revenue models for SNSs are advertisement, subscription and transaction models The literature study performed in this research presents what motivates users to start using a social network (acquisition), why they become active (activation), why they keep coming back (retention), and why they tell others (and share messages to others) (referral). The presented motivators for retention, usefulness and enjoyment, are tested by a quantitative analysis. This is done by comparing questionnaire data on how users experience the different motivators for retention on StructWeb, with their amount of clicks. This analysis could not confirm that enjoyment and usefulness are predictors of retention at StructWeb. The low number of respondents to the questionnaire (N=31) is expected to have a big influence on this. Although this research did not find enjoyment and usefulness as significant (at α=0.05) predictors of retention at, the results hint toward a positive relationship between enjoyment and retention quality with the relationship being significant at the 0,10 level. The motivations presented in the literature study in Chapter 2 form a valuable scientific foundation for the further scientific research into the AARRR model. Furthermore this literature study can be used as a basis for further quantitative analysis into the motivations of SNS users. Finally, the performed literature study formed the basis for the advice given to StructWeb to further improve their product, marketing campaigns, community management and organizational strategy.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:01 general works
Programme:Business Administration MSc (60644)
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