the power of social networks and how they shape consumer behavior - celcom axiata

Insight Valley Asia 2013 | May 16 & 17 | Bangkok, Thailand | www.insightvalley.com

Insight Valley Asia 2013 | May 16 & 17 | Bangkok, Thailand | www.insightvalley.com

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The Power Of Social Networks And How They Shape Consumer Behavior

George Chua, Vice President, Customer Analytics, Celcom Axiata Berhad

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Let’s begin with a fun exercise

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Category BMI range (kg/m2)

Very severely underweight less than 15.0

Severely underweight from 15.0 to 16.0

Underweight from 16.0 to 18.5

Normal (healthy weight) from 18.5 to 25

Overweight from 25 to 30

Obese Class I (Moderately obese)

from 30 to 35

Obese Class II (Severely obese) from 35 to 40

Obese Class III (Very severely obese)

over 40

Does obesity spread from person to person?

Nicholas A. Christakis MD, PhD. & James H. Fowler PhD.

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Our friends, our friends’ friends and our friends’ friends’ friends can make us fat

4 Source: The Spread of Obesity in a Large Social Network over 32 Years, Nicholas A. Christakis, M.D., Ph.D., M.P.H., and James H. Fowler, Ph.D., N Engl J Med 2007; 357:370-379 July 26, 2007

Christakis & Fowler also found that social networks have clusters of happy and unhappy people within them that reach out to three degrees of

separation

• A person's happiness is related to the happiness of their friends, their friends’ friends, and their friends’ friends’ friends

• In fact, each additional happy friend increases a person's probability of being happy by about 9%

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Unhappy people and happy people tend to cluster in separate groups

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Source: Christakis, N. A., & Fowler, J. H. (2009). Connected: The surprising power of our social networks and how they shape our lives. New York: Little, Brown and Company.

Studies done at a Malaysian mobile operator found that subscribers who are in a community of churners have greater likelihood of churn

• For a post-paid subscriber who is in a community of churners, the likelihood of churn is about 12.7%, which is 3 higher than a random post-paid subscriber

• The churn likelihood of a prepaid subscriber who is in a community of churners is over 1.9 times higher than a random prepaid subscriber.

• Churn contagion is stronger in the community of post-paid subscribers than prepaid subscribers.

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3.9% 7.0%

8.8% 6.1%

0%

5%

10%

15%

Postpaid churn Prepaid churn (Celcom

definition)

Background churn Community lift

A subscriber’s community influence his churn likelihood through influencers

Jun-11

Jul-11

Aug-11

Sep-11

Source: Social network analysis on churners between Jun-11 & Sep-11 and their call graphs in May-11

Influencers are also far more value than the average subscriber

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y = 1881.4x + 36.507 R² = 0.0827

-MYR 100

MYR 0

MYR 100

MYR 200

MYR 300

MYR 400

MYR 500

MYR 600

0.000 0.020 0.040 0.060 0.080 0.100 0.120 0.140

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l Rev

enu

e In

Th

e M

on

th O

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Eigenvector Centrality Of Churners In June-11

Source: Social network analysis on churners between Jun-11 & Sep-11 and their call graphs in May-11

Time evolution of the iPhone adoption network

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Notes: One node represents one subscriber. Node color: represents iPhone model: red=2G, green=iPhone 3G, yellow=3GS

14% of people trust ads, 78% of

people trust consumer recommendations!

Nielsen Global Trust in Advertising Survey

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Implications for the marketer

1. Because people can influence one another through 3 degrees, social contagion can spread through society with great speed.

2. The key to harnessing the effects of social contagion, is to identify and influence the influencer.

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Four steps of influencer marketing

1. Identify and profile* the influencers by measuring their degree of influence.

2. Identify and profile the influencees who are socially connected to the influencer.

3. Ask yourself: a) What economic and emotional value can I provide to both the influencer and influencees? b) How can I help the influencer to pass on this value?

4. Design a marketing campaign based on your answers to 3.

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Notes: *Profile here refers to demographic, behavioral and psychological profiles.

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2

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Case study on influencer marketing: Dunkin’ Donuts

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Case study on influencer marketing: Gatorade

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Insight Valley Asia 2013 | May 16 & 17 | Bangkok, Thailand | www.insightvalley.com

Thank you to our sponsor & partners!

Gold Sponsor

Supported by

Organised by

Insight Valley Asia 2013 | May 16 & 17 | Bangkok, Thailand | www.insightvalley.com