Do friends influence purchases on social networks? Yes, but that’s not always good for the seller.
While 40% of social network users were found to be positively impacted by the purchases of their friends, 12% avoided the purchasing patterns of their peers, according to a recent Harvard Working Knowledge Paper by Raghuram Iyengar, Sangman Han, and Sunil Gupta.
Why? Apparently because the 12% group, labeled “high status users” in the report, wanted to be different from – not just up with – the Joneses. And when you can watch the Joneses over the back fence of Friendfeed, you get a good idea of what not to buy. Low status users (48% of the universe) were shown to be unswayed by peer purchases one way or another.
So, credit unions that want to market in social networks should beware that while some friends might be swayed into adopting new financial institutions and products in social networks, not all can. Still, 40% vs. 12% ain’t bad.
For more on social networking and credit unions, download this free report.
Two caveats: The data set used in the study comes from Cyworld, a popular Korean site, so the findings may not be perfectly descriptive of American consumers. Also, the study examines purchases of items like online wallpapers and music, both of which are decidedly not financial products.
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