Start Date
10-12-2017 12:00 AM
Description
Are product updates—in terms of producers’ decision to add new features “over-the-air”—an effective means in stimulating greater product demand and appeal? Our difference-in-differences analyses of a matched sample of 17,247 mobile apps in Google Play over 24 weeks documents mixed consumer reactions. Whereas updates attracted new consumers, existing consumers rated an app 1.1% worse than before the update and compared to a control group of not updated apps. Why did existing consumers react negatively to updates? Our data provides little support that economic reasoning—i.e., direct costs or learning costs imposed by the update—underlies these reactions. Instead, negative reactions appear—at least to a certain degree— as a behavioral phenomenon, as consumer reviews show an increased density of affective vocabulary after an update. We discuss the plausibility of a producer-side trade-off when it comes to updates: updates may stimulate new demand but may alienate existing consumers.
Recommended Citation
Förderer, Jens and Heinzl, Armin, "Product Updates: Attracting New Consumers versus Alienating Existing Consumers" (2017). ICIS 2017 Proceedings. 2.
https://aisel.aisnet.org/icis2017/EBusiness/Presentations/2
Product Updates: Attracting New Consumers versus Alienating Existing Consumers
Are product updates—in terms of producers’ decision to add new features “over-the-air”—an effective means in stimulating greater product demand and appeal? Our difference-in-differences analyses of a matched sample of 17,247 mobile apps in Google Play over 24 weeks documents mixed consumer reactions. Whereas updates attracted new consumers, existing consumers rated an app 1.1% worse than before the update and compared to a control group of not updated apps. Why did existing consumers react negatively to updates? Our data provides little support that economic reasoning—i.e., direct costs or learning costs imposed by the update—underlies these reactions. Instead, negative reactions appear—at least to a certain degree— as a behavioral phenomenon, as consumer reviews show an increased density of affective vocabulary after an update. We discuss the plausibility of a producer-side trade-off when it comes to updates: updates may stimulate new demand but may alienate existing consumers.