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http://dx.doi.org/10.7737/JKORMS.2014.39.4.115

The Drivers of Customer Defection in Online Games across Customer Types : Evidence from Novice and Experienced Customers  

Son, Jungmin (Yonsei University, School of Business)
Jo, Wooyong (Yonsei University, School of Business)
Choi, Jeonghye (Yonsei University, School of Business)
Publication Information
Journal of the Korean Operations Research and Management Science Society / v.39, no.4, 2014 , pp. 115-136 More about this Journal
Abstract
The game industry has grown steadily and the online game has become one of the most attractive game segments for its remarkable growth. Customer management in the online game industry, however, has received little attention from the academic field. The purpose of this study is to analyze the drivers of customer defection in the online game setting and suggest not only theoretical but also managerial insights into increasing customer retention rates. Prior to empirical analysis, the authors hypothesized that 3 variables of interests (Learning, Playing, Achievement) would explain the customer defection according to preceeding researches. To demonstrate these hypotheses, the authors obtained data from one of the biggest game publishers in Korea, and the empirical analysis model was developed considering context of research settings. The results of analyses provide the following insights. First, the key behavioral variables of Learning, Playing, and Achievement play substantial roles in explaining the customer defection. Next, the effects of these variables vary between customer types: novice and experienced customers. The defection decisions by novice customers are predicted by all key behavioral variables and Playing serves as the most influential indicator of the defection decisions. However, experienced customers are influenced by Playing and Achievement, while Learning has no impact on the defection decisions. Finally, the authors investigated hypothetical customer retention strategies, using the empirical results. The market outcomes indicate that the customer retention strategies work well with novice customers and it is hard-to-impossible to prevent experienced customers from defection using their behavioral data. These findings together deliver several meaningful insights to management as follow. First, the management should support customers to get involved in Learning activities at the very first stage. Second, customer's Achievement and appropriate compensation for it would work as defection barriers. Last, to optimize the outcomes of firm's marketing investments, it is better to focus on retention of novice users not experienced ones.
Keywords
Online Game; Customer Retention; Customer Defection; Churn Analysis; Learning; Playing; Achievement;
Citations & Related Records
Times Cited By KSCI : 3  (Citation Analysis)
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