IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v178y2024ics0148296324001425.html
   My bibliography  Save this article

The effect of subscriptions on customer engagement

Author

Listed:
  • Wu, Banggang
  • Guo, Gengxuan
  • Luo, Peng

Abstract

Subscription programs are commonly used in online content communities. These programs give subscribers to receive unlimited access to a large content library for a fixed monthly payment. In this study, we examine how subscription to an online community membership affects users’ engagement behavior in terms of their content generation and content consumption. Based on sunk cost fallacy theory, we find that subscriptions lead to large increases in users’ engagement behavior, including content consumption and content generation, by increasing their perceived lock-in. In addition, we find evidence that the positive effect of subscriptions on users’ engagement behavior is more pronounced for less engaged users than in highly engaged users. The implications of these findings for customer engagement, content generation, and customer targeting are then discussed herein.

Suggested Citation

  • Wu, Banggang & Guo, Gengxuan & Luo, Peng, 2024. "The effect of subscriptions on customer engagement," Journal of Business Research, Elsevier, vol. 178(C).
    • Handle: RePEc:eee:jbrese:v:178:y:2024:i:c:s0148296324001425
    DOI: 10.1016/j.jbusres.2024.114638
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296324001425
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2024.114638?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hannes Datta & George Knox & Bart J. Bronnenberg, 2018. "Changing Their Tune: How Consumers’ Adoption of Online Streaming Affects Music Consumption and Discovery," Marketing Science, INFORMS, vol. 37(1), pages 5-21, January.
    2. Kyle B. Murray & Gerald Hubl, 2007. "Explaining Cognitive Lock-In: The Role of Skill-Based Habits of Use in Consumer Choice," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 34(1), pages 77-88, March.
    3. Marius F. Niculescu & D. J. Wu, 2014. "Economics of Free Under Perpetual Licensing: Implications for the Software Industry," Information Systems Research, INFORMS, vol. 25(1), pages 173-199, March.
    4. Peng Luo & Kun Chen & Chong Wu & Yongli Li, 2018. "Exploring the social influence of multichannel access in an online health community," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 69(1), pages 98-109, January.
    5. Trogdon, Justin G. & Nonnemaker, James & Pais, Joanne, 2008. "Peer effects in adolescent overweight," Journal of Health Economics, Elsevier, vol. 27(5), pages 1388-1399, September.
    6. Joey van Angeren & Govert Vroom & Brian T. McCann & Ksenia Podoynitsyna & Fred Langerak, 2022. "Optimal distinctiveness across revenue models: Performance effects of differentiation of paid and free products in a mobile app market," Strategic Management Journal, Wiley Blackwell, vol. 43(10), pages 2066-2100, October.
    7. Yacheng Sun & Xiaojing Dong & Shelby McIntyre, 2017. "Motivation of User-Generated Content: Social Connectedness Moderates the Effects of Monetary Rewards," Marketing Science, INFORMS, vol. 36(3), pages 329-337, May.
    8. Oded Nov & Mor Naaman & Chen Ye, 2010. "Analysis of participation in an online photo‐sharing community: A multidimensional perspective," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 61(3), pages 555-566, March.
    9. Gordon Burtch & Yili Hong & Ravi Bapna & Vladas Griskevicius, 2018. "Stimulating Online Reviews by Combining Financial Incentives and Social Norms," Management Science, INFORMS, vol. 64(5), pages 2065-2082, May.
    10. Teck-Hua Ho & I. P. L. Png & Sadat Reza, 2018. "Sunk Cost Fallacy in Driving the World’s Costliest Cars," Management Science, INFORMS, vol. 64(4), pages 1761-1778, April.
    11. June-Young Kim & Ji-Yub (Jay) Kim & Anne S. Miner, 2009. "Organizational Learning from Extreme Performance Experience: The Impact of Success and Recovery Experience," Organization Science, INFORMS, vol. 20(6), pages 958-978, December.
    12. Joost Rietveld & Joe N. Ploog, 2022. "On top of the game? The double‐edged sword of incorporating social features into freemium products," Strategic Management Journal, Wiley Blackwell, vol. 43(6), pages 1182-1207, June.
    13. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    14. Cheng, Hsing Kenneth & Tang, Qian Candy, 2010. "Free trial or no free trial: Optimal software product design with network effects," European Journal of Operational Research, Elsevier, vol. 205(2), pages 437-447, September.
    15. Oded Nov & Mor Naaman & Chen Ye, 2010. "Analysis of participation in an online photo-sharing community: A multidimensional perspective," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 61(3), pages 555-566, March.
    16. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
    17. Marios Kokkodis & Theodoros Lappas & Sam Ransbotham, 2020. "From Lurkers to Workers: Predicting Voluntary Contribution and Community Welfare," Information Systems Research, INFORMS, vol. 31(2), pages 607-626, June.
    18. Gandhi, Mohina & Kar, Arpan Kumar, 2022. "How do Fortune firms build a social presence on social media platforms? Insights from multi-modal analytics," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    19. Dennis J. Zhang & Hengchen Dai & Lingxiu Dong & Qian Wu & Lifan Guo & Xiaofei Liu, 2019. "The Value of Pop-Up Stores on Retailing Platforms: Evidence from a Field Experiment with Alibaba," Management Science, INFORMS, vol. 65(11), pages 5142-5151, November.
    20. Anjana Susarla & Jeong-Ha Oh & Yong Tan, 2012. "Social Networks and the Diffusion of User-Generated Content: Evidence from YouTube," Information Systems Research, INFORMS, vol. 23(1), pages 23-41, March.
    21. Kaiquan Xu & Jason Chan & Anindya Ghose & Sang Pil Han, 2017. "Battle of the Channels: The Impact of Tablets on Digital Commerce," Management Science, INFORMS, vol. 63(5), pages 1469-1492, May.
    22. Gérard P. Cachon & Pnina Feldman, 2011. "Pricing Services Subject to Congestion: Charge Per-Use Fees or Sell Subscriptions?," Manufacturing & Service Operations Management, INFORMS, vol. 13(2), pages 244-260, June.
    23. Hollebeek, Linda D. & Glynn, Mark S. & Brodie, Roderick J., 2014. "Consumer Brand Engagement in Social Media: Conceptualization, Scale Development and Validation," Journal of Interactive Marketing, Elsevier, vol. 28(2), pages 149-165.
    24. Cao, Dongmei & Meadows, Maureen & Wong, Donna & Xia, Senmao, 2021. "Understanding consumers’ social media engagement behaviour: An examination of the moderation effect of social media context," Journal of Business Research, Elsevier, vol. 122(C), pages 835-846.
    25. Kevin J. Boudreau & Lars Bo Jeppesen & Milan Miric, 2022. "Competing on freemium: Digital competition with network effects," Strategic Management Journal, Wiley Blackwell, vol. 43(7), pages 1374-1401, July.
    26. Edward F. McQuarrie & Jessica Miller & Barbara J. Phillips, 2013. "The Megaphone Effect: Taste and Audience in Fashion Blogging," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 40(1), pages 136-158.
    27. Paulo B. Goes & Chenhui Guo & Mingfeng Lin, 2016. "Do Incentive Hierarchies Induce User Effort? Evidence from an Online Knowledge Exchange," Information Systems Research, INFORMS, vol. 27(3), pages 497-516, September.
    28. Jörg Claussen & Tobias Kretschmer & Philip Mayrhofer, 2013. "The Effects of Rewarding User Engagement: The Case of Facebook Apps," Information Systems Research, INFORMS, vol. 24(1), pages 186-200, March.
    29. Cassar, Gavin, 2014. "Industry and startup experience on entrepreneur forecast performance in new firms," Journal of Business Venturing, Elsevier, vol. 29(1), pages 137-151.
    30. Elliot, Statia & Li, Guoxin & Choi, Chris, 2013. "Understanding service quality in a virtual travel community environment," Journal of Business Research, Elsevier, vol. 66(8), pages 1153-1160.
    31. Arkes, Hal R. & Blumer, Catherine, 1985. "The psychology of sunk cost," Organizational Behavior and Human Decision Processes, Elsevier, vol. 35(1), pages 124-140, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lena Abou El-Komboz & Anna Kerkhof & Johannes Loh, 2023. "Platform Partnership Programs and Content Supply: Evidence from the YouTube “Adpocalypse”," CESifo Working Paper Series 10363, CESifo.
    2. Dandan Qiao & Shun-Yang Lee & Andrew B. Whinston & Qiang Wei, 2020. "Financial Incentives Dampen Altruism in Online Prosocial Contributions: A Study of Online Reviews," Information Systems Research, INFORMS, vol. 31(4), pages 1361-1375, December.
    3. Chenhui (Julian) Guo & Tae Hun Kim & Anjana Susarla & Vallabh Sambamurthy, 2020. "Understanding Content Contribution Behavior in a Geosegmented Mobile Virtual Community: The Context of Waze," Information Systems Research, INFORMS, vol. 31(4), pages 1398-1420, December.
    4. Hackinger, Julian, 2019. "Ignoring millions of Euros: Transfer fees and sunk costs in professional football," Journal of Economic Psychology, Elsevier, vol. 75(PB).
    5. Kawaljeet Kaur Kapoor & Kuttimani Tamilmani & Nripendra P. Rana & Pushp Patil & Yogesh K. Dwivedi & Sridhar Nerur, 2018. "Advances in Social Media Research: Past, Present and Future," Information Systems Frontiers, Springer, vol. 20(3), pages 531-558, June.
    6. Yue Jin & Yong Tan & Jinghua Huang, 2022. "Managing contributor performance in knowledge‐sharing communities: A dynamic perspective," Production and Operations Management, Production and Operations Management Society, vol. 31(11), pages 3945-3962, November.
    7. Neslin, Scott A., 2022. "The omnichannel continuum: Integrating online and offline channels along the customer journey," Journal of Retailing, Elsevier, vol. 98(1), pages 111-132.
    8. Jing Wang & Gen Li & Kai-Lung Hui, 2022. "Monetary Incentives and Knowledge Spillover: Evidence from a Natural Experiment," Management Science, INFORMS, vol. 68(5), pages 3549-3572, May.
    9. Irina Heimbach & Oliver Hinz, 2018. "The Impact of Sharing Mechanism Design on Content Sharing in Online Social Networks," Information Systems Research, INFORMS, vol. 29(3), pages 592-611, September.
    10. Florian Englmaier & Arno Schmöller, 2008. "Reserve Price Formation in Online Auctions," CESifo Working Paper Series 2374, CESifo.
    11. Puiu Andreea-Ionela, 2020. "Motivations of Young Consumers to Participate to Collaborative Consumption," Journal of Social and Economic Statistics, Sciendo, vol. 9(2), pages 43-55, December.
    12. Ronayne, David & Sgroi, Daniel & Tuckwell, Anthony, 2021. "Evaluating the sunk cost effect," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 318-327.
    13. Gneezy, Uri & Nelidov, Vadim & Offerman, Theo & van de Ven, Jeroen, 2023. "When opportunities backfire: Alternatives reduce perseverance and success in task completion," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 304-324.
    14. Duxbury, Darren, 2012. "Sunk costs and sunk benefits: A re-examination of re-investment decisions," The British Accounting Review, Elsevier, vol. 44(3), pages 144-156.
    15. Keasey, Kevin & Moon, Philip, 2000. "Sunk cost effects: a test of the importance of context," Economics Letters, Elsevier, vol. 66(1), pages 55-58, January.
    16. Xiaoyan Chen & Wei Geng, 2022. "Enroll now, pay later: optimal pricing and nudge efforts for massive-online-open-courses providers," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(2), pages 1003-1018, June.
    17. Myounggu Lee & Hye-jin Kim, 2024. "Exploring determinants of digital music success in South Korea," Electronic Commerce Research, Springer, vol. 24(3), pages 1659-1680, September.
    18. Englmaier, Florian & Schmöller, Arno, 2010. "Determinants and Effects of Reserve Prices in Hattrick Auctions," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 326, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    19. Yanqing Han & Zongming Zhang, 2018. "Impact of free sampling on product diffusion based on Bass model," Electronic Commerce Research, Springer, vol. 18(1), pages 125-141, March.
    20. Bietenbeck, Jan & Leibing, Andreas & Marcus, Jan & Weinhardt, Felix, 2023. "Tuition fees and educational attainment," European Economic Review, Elsevier, vol. 154(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:178:y:2024:i:c:s0148296324001425. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.