Co-experience Network Dynamics: Lessons from the Dance Floor.

Abstract

Experience and socialization are key factors in determining customer commitment and renewal decisions in the service sector. To analyse the combined effect of experience and socialization, in this paper we introduce the concept of co-experience networks. A new methodological approach, originally applied in the field of social ethology, is devised to study reality-mined co-experience networks. By analysing a network of health club members over four years, we find that long-experienced clients have a lower chance to renew their contracts. On the other hand, central members in the co-experience network are stable and tend to renew their memberships. Further, since the members of the same reference group align their levels of commitment, renewal decisions are clustered in a small-world network. These findings contribute to our understanding of social dynamics and localized conformity in customer decision-making that can be used to plan marketing strategies to improve customer retention.