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Social Influence and Customer Referral Value

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  • Evangelos Xevelonakis

Abstract

Social media, big data and social influence are currently on everyoneʼs lips. But how do they affect customer value? Satisfied customers represent a major source of customer acquisition in many industries. Suppliers can reduce acquisition costs substantially by using "sales activities" of existing clients. However, if customers are dissatisfied, considerable loss of market share may result from negative word-ofmouth referrals. Social network analysis provides the basics to describe these networks, but how can we quantify customer referral value? In this contribution, we propose a method of determining the social influence of existing customers and of quantifying the economic value derived. Subsequently, we suggest a portfolio for identifying the most influential customers, based on the criteria of social influence and customer satisfaction. In a survey, we present empirical evidence of customer referral value being a crucial factor for boosting an enterprise’s profitability.

Suggested Citation

  • Evangelos Xevelonakis, 2016. "Social Influence and Customer Referral Value," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 2(1), pages 7-16, January.
    • Handle: RePEc:ate:journl:ajbev2i1-1
    DOI: =10.30958/ajbe.2-1-1
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    References listed on IDEAS

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    1. Brown, Jacqueline Johnson & Reingen, Peter H, 1987. "Social Ties and Word-of-Mouth Referral Behavior," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 14(3), pages 350-362, December.
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    Cited by:

    1. Maria Kubacka, 2020. "Review and Analysis of Selected Customer Value Measurement Methods (Przeglad i analiza wybranych metod pomiaru wartosci klienta)," Research Reports, University of Warsaw, Faculty of Management, vol. 1(32), pages 34-46.
    2. Galvão Meirinhos & Maximino Bessa & Carmem Leal & Márcio Sol & Amélia Carvalho & Rui Silva, 2022. "Municipal Executive Recommendation by Citizens: Who Is Most Significant?," Administrative Sciences, MDPI, vol. 12(3), pages 1-12, July.

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