Understanding Willingness to Pay for Social Network Sites

Abstract

The authors investigate how perceived customer value can be translated into economic returns for online social network sites (SNS). The (joint) impact of two value propositions, social capital and entitativity, is assessed. Perceived economic and social customer value are investigated as outcomes of these propositions. Two studies reveal that entitativity and social capital impact members' willingness to pay (WtP) membership fees, either directly or indirectly. Moreover, the predictive ability of perceived economic and social customer value regarding WtP depends on the type of membership and the type of social network. SNS providers are advised to emphasize the benefits their users actually take advantage of. While for professional SNS, it seems advisable to stress both social and economic value, particularly for premium members, in socially oriented SNS premium members seem to be driven more by social value. Other theoretical and managerial implications are discussed.

Relationship building through Facebook brand pages: the multifaceted roles of identification, satisfaction, and perceived relationship investment

“…Hence, they contribute to the perceived non-monetary social value of the FBP which in turn increases the attractiveness of the FBP (Vock et al, 2013).…”

“…Thus, FBP users may both contribute to and benefit from an important non-monetary social value through social support, intimacy, and friendship, which is acquired through communication and involvement with other FBP users (Vock, Dolen, & Ruyter, 2013). However, FBP users also contribute to social value through interaction, word of mouth, co-creation of brand meaning and network effects.…”

Why do teens spend real money in virtual worlds? A consumption values and developmental psychology perspective on virtual consumption

“…However, an environment where micro transactions and the freemium model are employed in parallel to collect revenue from users has not been explicitly investigated. In filling this gap, contribute to the scant research on the freemium revenue model (Vock et al, 2013) in the context of online social networking.…”

“…Prior research has examined users' willingness to pay for social network sites (Vock et al, 2013). However, an environment where micro transactions and the freemium model are employed in parallel to collect revenue from users has not been explicitly investigated.…”

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“…Business SNS member have the opportunity to present their human capital and social capital to a large audience, business social network sites provide the opportunity to identify individuals with special skills, knowledge or decision maker. The business SNS are professional networks for business issues (Vock et al 2013). The business SNS provides information and access to information which could be important for the business world e.g.…”