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Professor Jeonghye Choi School of Business, Yonsei University

Studies Show Social Interaction Is Bigger Motivator than Money for Sustained Purchase Behavior

Associate Professor Jeonghye Choi, School of Business, Yonsei University

Social interactions are significantly more effective than monetary rewards for sustained or repeated purchase behavior. 

Companies should target consumers’ social interactions to drive sustained or repeat purchase behavior. In a study of wellness program participants, researchers, including Jeonghye Choi, Associate Professor of Marketing at Yonsei University, found that social interactions had a greater effect than monetary incentives on the propensity of participants to maintain their exercise and health efforts.

The researchers used pedometers to monitor the steps taken by company participants while exercising and monitored their social interactions with peers from the same office or distant offices. The results showed that online interactions with distant out-of-office friends were a critical driver of participation. However, the researchers found that monetary incentives also encouraged repeat usage behavior even in the presence of social interactions, and ignoring monetary drivers may overstate the impact of social interactions.

Overall, social interactions are significantly more effective than monetary rewards when it comes to consumer engagement. “Our scenario analyses suggest that when both social interactions and monetary incentives coexist, the former may be sufficient for sustaining participation,” says Dr Choi.

They wanted to assess the influence of monetary incentives on sustained repeat behavior because, “several studies have shown that the positive relationship between monetary incentives and performance may fail to hold.”

For sustained consumer engagement in products such as fitness apps, marketers should focus on social interactions rather than monetary incentives. Image courtesy: Yanalya [Freepik.com].

Social interactions may have a different effect on repeat purchasing or continued usage behavior compared to one-time purchases, which is pertinent to different product contexts. For example, health and wellness products often require the long-term commitment of users, not just a single investment, to achieve the desired results. Determining how to secure that repeat commitment is useful for marketing purposes.

Although there are an overwhelming number of products and services that benefit from consumers’ repeat purchasing behavior, few studies provide insights on social effects in repeat decisions and the effectiveness of monetary incentives in the presence of social interactions.

The study showed that, over time, participants who were consistent users of pedometers valued the information obtained from social interactions. Additionally, participants who consistently used the pedometers were less motivated by monetary rewards.

The conclusion is that intense users of pedometers are interested in the health effects of the activity and are less influenced by the company’s marketing efforts.

The findings point to a different approach to marketing by businesses where investment in reward programs might be replaced by social platform strategies. The strategies should leverage informational influence rather than monetary influence particularly where repeat or sustained use is the goal.

Updated in July 2018
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More Information

  • Title of original article : Social Interactions and Monetary Incentives in Driving Consumer Repeat Behavior
  • Journal : Journal of Marketing Research
  • DOI : 10.1509/jmr.13.0482
  • Contact corresponding author : Jeonghye Choi ( jeonghye@yonsei.ac.kr )