New Research from NYU Stern Shows How Marketers Can Boost High-Quality Customer Referrals to Drive Growth
— May 8, 2019
Study analyzes the impact of push notifications in the ridesharing market to uncover consumer insights when it comes to referrals
In their paper titled, “Empirical Analysis of Referrals in Ride-Sharing,” the authors find that marketers can determine customers’ likelihood of delivering high-quality referrals based on cues from the customer’s usage of the platform. Examining 52 weeks of data---a total of 9,726,741 week-rider observations---the authors analyzed customer’s experience level on the platform (measured by number of past rides), current usage intensity (measured by number of rides in the same week) and the length of inactivity.
Their findings include:
- The probability of a customer making a referral in a given week decreases with the experience level, increases with the current usage intensity, and decreases with the length of the inactivity period.
- More experienced customers deliver higher quality referrals than less experienced customers.
- Customers who were themselves referred are more likely to make a referral in the future.
- Sending push notifications to remind users about the referral program on a weekend resulted in a 46.5% increase in the probability of making a referral.
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