Impact of VIP Label Absence on User Subscriptions | Responsible Food Safety Incident Management

Abstract

Talk A:
In today’s competitive business environment, companies use innovative strategies like the freemium model to attract and retain customers. Traditional freemium models marked premium features with VIP labels, making it easy for users to differentiate between free and premium offerings. However, as hybrid freemium models combining feature and time limits have emerged, the significance of VIP labels has evolved. This study investigates how the absence of VIP labels affects user subscriptions for freemium platforms. Collaborating with a prominent photo-editing platform, a randomized field experiment showed that removing VIP labels can boost user subscriptions by 17% without adverse effects on refund requests or long-term engagement. The removal of VIP labels encourages users to explore more premium features, increasing subscription likelihood. Additionally, the impact of removing VIP labels varies across countries, dependent on cultural uncertainty avoidance levels and regional GDP per capita. These findings emphasize the need for platforms to adapt their designs to align with evolving business models and technology.

Talk B:
Food safety incidents present serious risks to public health and can lead to significant fallout for involved companies. Therefore, it is imperative to enact responsible food safety management strategies to mitigate negative sentiments and restore stakeholder trust. This study examines the stock market reactions of firms within food-related sectors in the aftermath of food safety incidents. More crucially, it explores whether the adoption of responsible food safety management strategies – namely timeliness, transparency, and taking action – can alleviate the negative market response. We gather data on food safety incidents from listed Chinese firms and conduct an event study analysis. We observe significant negative stock market reactions following a food safety incident. Daily abnormal returns within a 21-day time window are utilized for a difference-in-difference analysis. The findings reveal that a firm’s response could alleviate the negative impact, with responses that are timely, transparent, and include concrete actions being preferred. Moreover, we investigate adjustments made by firms in their management systems and supply chains following food safety incidents, considering these as a long-term responsible management strategy. The findings contribute to our understanding of product safety and crisis management by demonstrating that responsible incident management can help alleviate adverse consequences.