The Value Of Revenue Leaders In Diffusion Process For A New Product

The analysis of social network is a hot topic for decades. In numerous studies, the most common implication is the innovation diffusion process for a new product. Academics and managers accelerate adoption to improve income by targeting seeds. Usually, they tend to focus first on people who have stronger influence than others, labeled "opinion leaders". Differently, we highlight the benefit of revenue leaders with high lifetime value. Different seeds represent different strategies in innovation diffusion process. How to make it more effective is very important for companies, which also enriches the content of related studies.On the basis of review related research, we explore the process of value creation by revenue leaders. We use an agent-based model to simulate the innovation diffusion of social networks, and then we get various values of revenue leaders and opinion leaders with different seed size. We assume that the total value of seeds is made up of direct value and social value, and the social value is related to network assortativity. Assortativity is embodied by the consistency tendency of consumer behavior in a same group. We compare means to verify the related hypothesis by creating the social network of telecom consumers.We use the results of innovation diffusion processes to contrast revenue leaders and opinion leaders, getting some conclusions. First, the direct value of revenue leaders is higher than opinion leaders, and the social value of opinion leaders is higher than revenue leaders. But social value decreases with seed size, and this decrease is more significant for opinion leaders than revenue leaders. It is because of the saturation effect in social networks. Individual networks are overlapped with each other, so it makes the effect of diffusion process weaken. Thus, we consider that two main factors which affect the total value of seeds are the distribution of CLV and the seed size. At the same time, we discover that the high total value of revenue leaders is because of accelerating adoption of a new product and the higher-than-average value created by accelerating adoption of potential customers who have a similar high CLV. The latter phenomenon is driven by network assortativity. We use the actual data to verify the related theories, and then put forward that some element of members has a significant degree of positive autocorrelation in a same social network.