Social influence in first-time and upgrade adoption

Abstract

Abstract The effects of social influence on product adoption have been documented for new products and first-time adoptions. Few investigated whether social influence plays an important role in upgrade adoption. Unlike first-time adoption, consumers have gained product experience, so their perceived risks and uncertainty were less than in first-time adoption. To study the roles that social influence plays in first-time versus upgrade adoption, we implemented two experiments. Study 1 involved a lab experiment on whether social influence works in upgrade adoption. Study 2 implemented a field study to identify the effects of peer adoption of virtual goods, with 897,765 participants: 28,730 first-time adopters and 15,056 upgraders. The results offer four findings. First, the results show that social influence affected consumer upgrade decisions. Second, there were different effects of social influence in upgrade adoption: informative influence decays and normative influence rises from first-time to upgrade adoption. Third, the influential adopters (and upgraders) vary across the stages. Well-connected adopters exerted stronger influence than less-connected ones in first-time adoption, and upgraders with higher homophily relative to non-upgraders exerted influence in upgrade adoption. Fourth, the susceptibility to influence of non-adopters (non-upgraders) also varied in the different stages. Less-connected non-adopters were more susceptible in their first-time adoption, while non-upgraders with higher reciprocity were more susceptible in their upgrade decision. These results extend our understanding of social influence, especially in different adoption contexts. This research also can help marketers identify influential adopters to facilitate online marketing campaigns.