Economical user-generated content (UGC) marketing for online stores based on a fine-grained joint model of the consumer purchase decision process

Abstract

User-generated content (UGC) is influential in reducing customer perceived risk and determining online store sales. E-sellers spend huge costs and efforts to improve UGC for it serves as a convenient and persuasive alternative for marketing and advertising purposes. Considering that consumers may set lower and/or upper limits (i.e., psychological thresholds) in which the good is expected to be, and purchase decisions are considered as a multi-stage decision process, yet models in previous research cannot uncover this decision-making process. Therefore, exploring the impact of UGC at each decision-making stage and detecting the psychological thresholds on various aspects of UGC (i.e., the fine-grained effects of UGC) contribute to optimizing the UGC with the best cost to boost sales. To this end, a fine-grained joint two-stage decision model, zero-inflated negative binomial regression (ZINB-P) model is proposed to support economical UGC marketing. Specifically, we compile a factors system composed of various types of aggregate-level statistics of UGC, which can impact risk perception. Afterward, change point analysis is used to find multi-level consumer psychological thresholds on UGC factors and consumers’ risk perception model is constructed to measure purchasing probabilities in the first decision-making stage. On the basis of consumers’ risk perception model, the ZINB-P model is built to fully capture the fine-grained effects of UGC factors on each stage of the consumer purchase decision. It integrates two stages of consumer decision: the consumer risk perception and non-compensatory choice in the first stage, and the second compensatory stage. A genetic algorithm is constructed to jointly estimate the parameters in ZINB-P model. Finally, an experiment on a kind of fresh produce from Taobao.com evidences the precision of our model. We demonstrate how our model can provide with economical UGC marketing strategies using a decision support table, in which some scenarios are identified. E-sellers can use this table to find the scenarios they are located in and identify the critical UGC factors that impede the sales in each scenario, and thus economical UGC marketing strategies can be obtained by improving these critical UGC factors.