Forging the Future of Work
The Impact of App Crashes on Consumer Engagement
Journal of Marketing
The authors develop and test a theoretical framework to examine the impact of app crashes on app engagement. The framework predicts that consumers increase engagement after encountering a single crash due to their need-for-closure and curiosity, yet reduce engagement after experiencing repeated and concentrated crashes, primarily because of frustration and perceived task unattainability; the recency of crashes moderates these effects. Field data analysis reveals that while a crash truncates a session and reduces content consumption, it increases page views in the following session. However, this increase in page views does not compensate for the loss during the crashed session. Frequent and more concentrated crashes curtail engagement. Three experiments in which crashes are exogenously manipulated in a different context support the validity and generalizability of these findings, confirm the proposed mediators, and demonstrate how to lessen the negative impact of repeated crashes with post-crash messages. The research adds new dimensions to the task pursuit literature and provides managers with a framework to quantify the economic impact of crashes, analyze content substitution behavior, and assess the bias of a transactional view of crash incidents. Additionally, it offers insights into targeted feature release to more tolerant users and strategic design of post-crash messages.
Savannah Wei Shi, Associate Professor of Marketing & J.C. Penney Research Professor, Leavey School of Business Santa Clara University
Seoungwoo Lee*, Assistant Professor, Yonsei School of Business, Yonsei University Seoul
Kirthi Kalyanam, L.J. Skaggs Distinguished Professor Leavey School of Business, Santa Clara University
Michel Wedel, PepsiCo Chaired Professor of Consumer Science, Robert H. Smith School of Business, University of Maryland
Transforming Products into Platforms: Unearthing New Avenues for Business Innovation
NIM Marketing Intelligence Review, October 2024
It is impossible for brands to ignore digital platform opportunities. Network effects are one of the strongest sources of power and defensibility ever invented and underlie some of the most valuable businesses in the world. Managers and entrepreneurs can leverage the power of platforms by adding some platform elements to their existing products or services, by distributing their brands via existing platforms or by developing their own new platforms. By using one’s own brands as platforms requires creativity but can help businesses unlock new value and build resilient ecosystems around their products. There are three key methods. The first is to invite third-party sellers to enhance existing products. Examples include selling advertising space around products or creating app stores to extend offers. The second is to connect one’s customers by enabling interactions among users to add value. Third, brands might reach out to customers’ customers by enhancing the end-user experience in a way that benefits both themselves and their direct customers. If thoughtfully implemented, any platform strategy will create self-reinforcing feedback loops sparking growth and keeping competitors at bay.
Andrei Hagiu, Associate Professor of Information System, Boston University; Bobby Zhou, Associate Professor of Marketing, University of Maryland
Marketplace Expansion Through Marquee Seller Adoption: Externalities and Reputation Implications
Management Science
In the race to establish themselves, many early-stage online marketplaces choose to accelerate their growth by adding marquee (established brand name) sellers. We study the implications of marquee seller entry on smaller, unbranded sellers in a marketplace when both unbranded sellers and marquee sellers can vary vertically across reputation (referred to as sellers’ quality). While recent literature has shown that higher-quality unbranded sellers fare better than their lower-quality peers, we posit that this may not hold for entrants of any quality. To this end, we collaborate with an online business-to-business platform and exploit the entry of two marquee sellers of vastly differing quality. Using a difference-in-difference-in-differences framework, we causally identify the effect. We find that while higher-quality unbranded seller revenues increase relative to low-quality unbranded sellers when the entrant is of superior quality (consistent with the literature), the effect is reversed when the entrant is of inferior quality. Further, unbranded sellers change their supply quantities such that the platform’s average supply quality shifts in the direction of entrant quality. Using a stylized theoretical model, we identify two mechanisms that drive our findings – (i) new buyers brought in by the entrant disproportionately favor unbranded sellers who are quality neighbors to the entrant, and (ii) the unbranded seller’s ability to adjust their supply quantities. Most notably, the choice of marquee sellers, examined through the lens of their externality on unbranded sellers, can foster or undermine the platform’s long-term growth objectives.
Wenchang Zhang (Kelly School of Business, Indiana University), Wedad Elmaghraby and Ashish Kabra (University of Maryland)