Social Network Analysis (SNA) is a
powerful and crucial tool to detect social relationships between customers. It
is a useful tool to measure the number
of connections in different degree as well as in different characters, which is
quite important in profiles for the right person’s choice.
From many researches, we know most purchasing decisions
(70%) are a result of recommendations made by the customer’s close social
environment, less advertising or marketing campaigns.
The opinion leaders in social network are not the one
with most relationships to other customers, but the one who have strongest
influence in the social network. The influence is refer to purchase of a
specific products and influence on loyalty and churn. Studies have shown that
opinion leaders might influence from 10 to 100 other people belonging to their
social network at buying products specific recommended by the influencers.
The Problem/Challenge
Customers are always the most important factor in a successful business.
It is extremely important to know different customer segment and understand
customer behaviors.
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Who is the most influence
customer
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Who is the most
valuable customer
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How to acquire
loyalty customer
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How to improve lifetime
valuable customer
Data needed
To analyze the relationship between different customers, I want to know
the questions below:
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Which product
you bought in last month?
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Who influenced
you to buy this product?
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Will you plan to
buy other product in the coming month?
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What is the main
issue you care about, such as design, price, service…?
Measurements
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Use the network degree
to the influence question, we can figure out the one with highest degree refers
to the one with more influence, and work out the opinion leaders.
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Use the network
density to define the customer segmentation and customer features.
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Use the distance
analysis to know the influencer’s impact.
What SNA can help
The Social network analysis could help organizations to explore and
understand the social structure of their customer base. And are used widely in
retail industry to help following points:
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Optimizing
product marketing campaigns
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Concentrate on
customer segmentation
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Figure out
product recommendation
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Loyalty
programming management
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Help for churn
management
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Foresee the
trends and spot business opportunities
SNA is the solution to help marketing department to detect the
influencer, help selecting the influence customers for a particular product,
and help retailers clear about customer segmentation and their related
products. Finally reach the aim to stimulate the sales and increase revenue.
1 comment:
Good idea, and a good attempt at using SNA to help focus promotional efforts. You may not have realized this, but you're actually describing a 2-mode network: customers and their purchases, using their attributes to segment them.
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