Influence of Friends On Our Purchases<br />Consumer Behavior Experiment<br />Rags Srinivasan @pricingright<br />
Let Me First Thank These Great Folks<br />Hiten Shah<br />@hnshah<br />Chris Hopf<br />@pricing<br />LinkedIn Grp Members<...
Do We Know the Influence of Our Friends on Our Purchases?<br />There are many predictions and survey numbers<br />There ar...
Hypothesis: We Do Not Know<br />Biases in Measurements<br />It’s a guess<br />37% to 75%<br />Numbers reported based on su...
Experiment:  Test Low and High Anchors<br />There were two polls – respondents were randomly assigned to one<br />In a pre...
Population, Sampling and Tests<br />People on Twitter and LinkedIn<br />~75 responses received for each poll<br />Chi-Squa...
The Raw Responses are …<br />Low Anchor: 37%<br />High Anchor: 75%<br />These are so low and are ignored in the computatio...
Did a Chi-Square Test on Each Sample<br />For the responses to be statistically significant i.e., not just random, Chi-Squ...
Did a Crosstab Between Samples<br />For the responses to be statistically significant i.e., not just random, Chi-Square sh...
What are the Marketing Implications?<br />Coming soon …<br />Check out my other work on SlideShare<br />Rags Srinivasan<br...
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Influence Of Recommendations

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Influence Of Recommendations

  1. 1. Influence of Friends On Our Purchases<br />Consumer Behavior Experiment<br />Rags Srinivasan @pricingright<br />
  2. 2. Let Me First Thank These Great Folks<br />Hiten Shah<br />@hnshah<br />Chris Hopf<br />@pricing<br />LinkedIn Grp Members<br />@bouldernet<br />
  3. 3. Do We Know the Influence of Our Friends on Our Purchases?<br />There are many predictions and survey numbers<br />There are popular metrics asking if we would recommend products to friends<br />There is lot at stake – Marketing decisions are made on influence of friends<br />
  4. 4. Hypothesis: We Do Not Know<br />Biases in Measurements<br />It’s a guess<br />37% to 75%<br />Numbers reported based on surveys are suspect<br />Responses are subject to anchoring biases<br />
  5. 5. Experiment: Test Low and High Anchors<br />There were two polls – respondents were randomly assigned to one<br />In a previous survey it was found that people who are active in the social media reported 37% of their purchases are influenced by friends. Please state what percentage of your purchases are influenced by friends?<br />In a previous survey it was found that people who are active in the social media reported 75% of their purchases are influenced by friends. Please state what percentage of your purchases are influenced by friends?<br />
  6. 6. Population, Sampling and Tests<br />People on Twitter and LinkedIn<br />~75 responses received for each poll<br />Chi-Square test and Crosstab<br />
  7. 7. The Raw Responses are …<br />Low Anchor: 37%<br />High Anchor: 75%<br />These are so low and are ignored in the computation<br />
  8. 8. Did a Chi-Square Test on Each Sample<br />For the responses to be statistically significant i.e., not just random, Chi-Square should be greater than 6 (df = 2. p=0.05)<br />Low Anchor: 37%<br />High Anchor: 75%<br />Computed Chi-Square= 1.32<br />Computed Chi-Square=0.14<br />What does this mean? Responses are not statistically significant. Any recommendation metric reported are not dependable <br />
  9. 9. Did a Crosstab Between Samples<br />For the responses to be statistically significant i.e., not just random, Chi-Square should be greater than 6 (df = 2. p=0.05)<br />Computed Chi-Square= 0.57<br />What does this mean? Responses are not influenced by anchoring. It is just that people randomly pick between 0% to 50%<br />
  10. 10. What are the Marketing Implications?<br />Coming soon …<br />Check out my other work on SlideShare<br />Rags Srinivasan<br />http://iterativepath.wordpress.com<br />@pricingright<br />

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