Summary: Among various channels marketers use to acquire customers, one channel that has not been examined in depth is peer-to-peer gifts. Specifically, we compare peer-to-peer sampling— where a current customer gifts a subscription to a friend who is not yet a customer – and business sampling, a well-established channel. We label the former “social sampling”.
We examine this using a rich dataset from the publishing industry. We apply mixture of multivariate Poisson model to jointly analyze the number of renewals of magazine subscriptions by customers acquired through these channels, and to identify customer segments.
Our most important finding is that social sampling is much more effective in acquiring customers that are likely to renew their subscriptions more times than those acquired through business to consumer sampling or any other acquisition channel used by the publisher.
Conference: INFORMS Marketing Science Conference, Rice University, Houston, TX, June 2011.