DOI: https://doi.org/10.14710/dijb.7.1.2024.11-22

Increasing customer equity through customer relationships on social media

1Department of Management, Universitas Lampung, Indonesia

2Master of Management Study Program, Institut Informatika dan Bisnis Darmajaya, Indonesia

3Department of Management, Universitas Malahayati, Indonesia

Open Access Copyright 2024 Diponegoro International Journal of Business under http://creativecommons.org/licenses/by-sa/4.0.

Citation Format:
Abstract
This paper aims to propose and test a model of the influence of customer relationships on increasing customer equity, which has implications for consumer purchase intentions of retail products influenced by social media. We sent an online questionnaire to 476 respondents. Data analysis used the AMOS 24 structural equation modeling approach with the stages of measurement models and structural models of hypothesis testing. The study's results explain that the three factors forming a customer relationship can affect an increase in customer equity. Of the three dimensions, only brand equity can increase consumer purchase intentions. Meanwhile, value equity and relationship equity have negative results on purchase intention. Online sales through social media not only focus on the products offered but also require building brand equity, which determines consumer purchase intentions.
Fulltext View|Download
Keywords: social media; online sales; customer equity; customer relationship

Article Metrics:

Article Info
Section: Articles
Language : EN
Recent articles
Relationship of companies’ characteristics to foreign ownership: Studies on emerging market stock exchange in seven countries from ASEAN and Middle East The effect of asymmetric information and financial distress ratio on earnings management with corporate governance as moderating variables Examining the presence of the monday effect on the Indonesian Stock Exchange before and during the Covid-19 pandemic More recent articles
  1. Akerlof, G. A. (2017). The market for “lemons”: Quality uncertainty and the market mechanism. Decision Science, 84(3), 261–273. https://doi.org/10.1017/cbo9780511609381.002
  2. Ambler, T. (1997). How much of brand equity is explained by trust? Management Decision, 35(4), 283–292. https://doi.org/10.1108/00251749710169666
  3. Asano, G., Cheng, T. P. V., Rhodes, J., & Lok, P. (2019). The influence of online reviews and brand trust and customer equity: Consumer equity. Journal of Electronic Commerce in Organizations, 17(4), 30–43. https://doi.org/10.4018/JECO.2019100103
  4. Barry, T. E. (1987). The development of the hierarchy of effects: An historical perspective current issues and research in advertising. Current Issues and Research in Advertising, 10(1–2), 251–295
  5. Barry, T. E., & Howard, D. J. (1990). A Review and Critique of the Hierarchy of Effects in Advertising. International Journal of Advertising, 9(2), 121–135. https://doi.org/10.1080/02650487.1990.11107138
  6. Brock, J. K. U., & Zhou, J. Y. (2012). Customer intimacy. Journal of Business and Industrial Marketing, 27(5), 370–383. https://doi.org/10.1108/08858621211236043
  7. Byun, U., Jang, M., & Baek, H. (2023). The effect of YouTube comment interaction on video engagement: focusing on interactivity centralization and creators’ interactivity. Online Information Review, 47(6), 1083–1097
  8. Cambra-Fierro, J., Xuehui Gao, L., Melero-Polo, I., & Javier Sese, F. (2019). What drives consumers’ active participation in the online channel? Customer equity, experience quality, and relationship proneness. Electronic Commerce Research and Applications, 35(December 2018), 100855. https://doi.org/10.1016/j.elerap.2019.100855
  9. Chakraborty, U. (2019). The impact of source credible online reviews on purchase intention: The mediating roles of brand equity dimensions. Journal of Research in Interactive Marketing, 13(2), 142–161. https://doi.org/10.1108/JRIM-06-2018-0080
  10. CMO, S. (2022). Marketing in a Post-Covid Era. The CMO Survey. https://cmosurvey.org/results/september-2022/
  11. Cuong, P. H., Nguyen, O. D. Y., Ngo, L. V., & Nguyen, N. P. (2020). Not all experiential consumers are created equals: the interplay of customer equity drivers on brand loyalty. European Journal of Marketing, 54(9), 2257–2286. https://doi.org/10.1108/EJM-04-2018-0228
  12. Drollinger, T., & Comer, L. B. (2013). Salesperson’s listening ability as an antecedent to relationship selling. Journal of Business and Industrial Marketing, 28(1), 50–59. https://doi.org/10.1108/08858621311285714
  13. Du, R. Y., Netzer, O., Schweidel, D. A., & Mitra, D. (2021). Capturing Marketing Information to Fuel Growth. Journal of Marketing, 85(1), 163–183. https://doi.org/10.1177/0022242920969198
  14. Dwivedi, Y. K., Ismagilova, E., Rana, N. P., & Raman, R. (2021). Social Media Adoption, Usage And Impact In Business-To-Business (B2B) Context: A State-Of-The-Art Literature Review. Information Systems Frontiers. https://doi.org/10.1007/s10796-021-10106-y
  15. Febrian, A., Bangsawan, S., Ms, M., & Ahadiat, A. Y. I. (2021). Digital Content Marketing Strategy in Increasing Customer Engagement in Covid-19 Situation. International Journal of Pharmaceutical Research, 13(01), 4797–4805. https://doi.org/10.31838/ijpr/2021.13.01.684
  16. Fornell, C., & Larcker, D. F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18(1), 39. https://doi.org/10.2307/3151312
  17. Fouladi, S., Ekhlassi, A., & Sakhdari, K. (2021). Determining the factors affecting brand authenticity of startups in social media. Qualitative Market Research, 24(3), 396–419. https://doi.org/10.1108/QMR-04-2020-0048
  18. Gao, L., Melero-Polo, I., & Sese, F. J. (2020). Customer equity drivers, customer experience quality, and customer profitability in banking services: The moderating role of social influence. Journal of Service Research, 23(2), 174–193
  19. Gautam, V., & Sharma, V. (2017). The Mediating Role of Customer Relationship on the Social Media Marketing and Purchase Intention Relationship with Special Reference to Luxury Fashion Brands. Journal of Promotion Management, 23(6), 872–888. https://doi.org/10.1080/10496491.2017.1323262
  20. Greenhow, C., & Chapman, A. (2020). Social distancing meet social media: digital tools for connecting students, teachers, and citizens in an emergency. Information and Learning Science, 121(5–6), 331–342. https://doi.org/10.1108/ILS-04-2020-0134
  21. Grönroos, C. (2009). Marketing as promise management: Regaining customer management for marketing. Journal of Business and Industrial Marketing, 24(5), 351–359. https://doi.org/10.1108/08858620910966237
  22. Guha, S., Mandal, A., & Kujur, F. (2021). The social media marketing strategies and its implementation in promoting handicrafts products: a study with special reference to Eastern India. Journal of Research in Marketing and Entrepreneurship, 23(2), 339–364. https://doi.org/10.1108/JRME-07-2020-0097
  23. Hair, J., Black, W., Babin, B., & Anderson, R. (2010). Multivariate Data Analysis: A Global Perspective. In Multivariate Data Analysis: A Global Perspective
  24. Hair, J. F., Babin, B. J., & Krey, N. (2017). Covariance-Based Structural Equation Modeling in the Journal of Advertising: Review and Recommendations. Journal of Advertising, 46(1), 163–177. https://doi.org/10.1080/00913367.2017.1281777
  25. Herhausen, D., Miočević, D., Morgan, R. E., Kleijnen, M. H. P., Autry, C., Di Benedetto, A., Berthon, P., Chuang, F.-M., Eggert, A., Frambach, R., Hortoványi, L., Hudson, K., Hughes, M., Hughes, P., Koritos, C., Lindgreen, A., De Luca, L., Morgan, N., Robson, M., … Vorhies, D. (2020). The Digital Marketing Capabilities Gap: Empirical Evidence, Managerial Shortcomings, and Future Research Streams. In ndustrial Marketing Management (Vol. 90, Issue 1)
  26. Hess, J., & Story, J. (2005). Trust-based commitment: Multidimensional consumer-brand relationships. Journal of Consumer Marketing, 22(6), 313–322. https://doi.org/10.1108/07363760510623902
  27. Ho, M. H. W., & Chung, H. F. L. (2020). Customer engagement, customer equity and repurchase intention in mobile apps. Journal of Business Research, 121(July), 13–21. https://doi.org/10.1016/j.jbusres.2020.07.046
  28. Holehonnur, A., Raymond, M. A., Hopkins, C. D., & Fine, A. C. (2009). Examining the customer equity framework from a consumer perspective. Journal of Brand Management, 17(3), 165–180. https://doi.org/10.1057/bm.2009.21
  29. Hyun, S. S. (2009). Creating a model of customer equity for chain restaurant brand formation. International Journal of Hospitality Management, 28(4), 529–539. https://doi.org/10.1016/j.ijhm.2009.02.006
  30. Iacobucci, D. (2010). Structural equations modeling: Fit Indices, sample size, and advanced topics. Journal of Consumer Psychology, 20(1), 90–98. https://doi.org/10.1016/j.jcps.2009.09.003
  31. Itani, O. S., Goad, E. A., & Jaramillo, F. (2019). Building customer relationships while achieving sales performance results: Is listening the holy grail of sales? Journal of Business Research, 102(September), 120–130. https://doi.org/10.1016/j.jbusres.2019.04.048
  32. Javed, S., & Billah, U. I. (2022). Customer Engagement through Love and Trust: Building Brand Equity in the Retail Industry. The Retail and Marketing Review. https://journals.co.za/doi/abs/10.10520/ejc-irmr1_v18_n1_a3%0Ahttps://retailandmarketingreview.co.za/wp-content/uploads/2022/07/RMR18_1_25-41.pdf
  33. Jeon, S., & Kim, J. S. (2016). Effects of service failure on consumer responses across failure types: A moderating role of intimacy. Australasian Marketing Journal, 24(1), 46–53. https://doi.org/10.1016/j.ausmj.2015.12.004
  34. John, S., Larke, R., & Kilgour, M. (2018). Applications of social media for medical tourism marketing: an empirical analysis. Anatolia, 29(4), 553–565. https://doi.org/10.1080/13032917.2018.1473261
  35. Kim, A. J., & Ko, E. (2012). Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65(10), 1480–1486. https://doi.org/10.1016/j.jbusres.2011.10.014
  36. Kim, H., & Song, J. (2010). The quality of word-of-mouth in the online shopping mall. Journal of Research in Interactive Marketing, 4(4), 376–390. https://doi.org/10.1108/17505931011092844
  37. Kim, K. H., Ko, E., Kim, S. J., & Jiang, Q. (2021). Digital service innovation, customer engagement, and customer equity in AR marketing. Journal of Global Scholars of Marketing Science, 31(3), 453–466. https://doi.org/10.1080/21639159.2021.1923054
  38. Kim, W., Kim, H., & Hwang, J. (2020). Sustainable growth for the self-employed in the retail industry based on customer equity, customer satisfaction, and loyalty. Journal of Retailing and Consumer Services, 53(February 2019). https://doi.org/10.1016/j.jretconser.2019.101963
  39. Lemon, K., Rust, R., & Zeithml, V. (2001). What Drives Customer Equity A company’s current customers provide the most reliable source of future revenues and profits. Marketing Management, 10(1), 1–5. http://www.markenlexikon.com/d_texte/customer_equity_drivers_2001.pdf
  40. Li, F., Larimo, J., & Leonidou, L. C. (2021). Social media marketing strategy: definition, conceptualization, taxonomy, validation, and future agenda. Journal of the Academy of Marketing Science, 49(1), 51–70. https://doi.org/10.1007/s11747-020-00733-3
  41. Li, M. W., Teng, H. Y., & Chen, C. Y. (2020). Unlocking the customer engagement-brand loyalty relationship in tourism social media: The roles of brand attachment and customer trust. Journal of Hospitality and Tourism Management, 44(November 2019), 184–192. https://doi.org/10.1016/j.jhtm.2020.06.015
  42. Lim, H., & Childs, M. (2020). Visual storytelling on Instagram: branded photo narrative and the role of telepresence. Journal of Research in Interactive Marketing, 14(1), 33–50. https://doi.org/10.1108/JRIM-09-2018-0115
  43. Liu, H. Y., & Huang, S. Y. (2014). Fostering a customer-centric e-government through customer relationship management readiness assessment. International Journal of Business and Systems Research, 8(1), 51–71. https://doi.org/10.1504/IJBSR.2014.058008
  44. Luo, C. (2021). Analyzing the impact of social networks and social behavior on electronic business during COVID-19 pandemic. Information Processing and Management, 58(5), 102667. https://doi.org/10.1016/j.ipm.2021.102667
  45. Mainardes, E. W., & Cardoso, M. V. (2019). Effect of the use of social media in trust, loyalty and purchase intention in physical stores. International Review of Retail, Distribution and Consumer Research, 29(4), 456–477. https://doi.org/10.1080/09593969.2019.1583593
  46. Majeed, M., Owusu-Ansah, M., & Ashmond, A. A. (2021). The influence of social media on purchase intention: The mediating role of brand equity. Cogent Business and Management, 8(1). https://doi.org/10.1080/23311975.2021.1944008
  47. Masè, S., Cedrola, E., & Cohen-Cheminet, G. (2018). Is artification perceived by consumers of luxury products? The research relevance of a customer-based brand equity model. Journal of Global Fashion Marketing, 9(3), 223–236. https://doi.org/10.1080/20932685.2018.1463861
  48. Michel, S., Brown, S. W., & Gallan, A. S. (2008). An expanded and strategic view of discontinuous innovations: Deploying a service-dominant logic. Journal of the Academy of Marketing Science, 36(1), 54–66. https://doi.org/10.1007/s11747-007-0066-9
  49. Mitręga, M., & Choi, T. M. (2021). How small-and-medium transportation companies handle asymmetric customer relationships under COVID-19 pandemic: A multi-method study. Transportation Research Part E: Logistics and Transportation Review, 148(February). https://doi.org/10.1016/j.tre.2021.102249
  50. Morgan, R. M., & Hunt, S. D. (1994). The Commitment-Trust Theory of Relationship Marketing. Journal of Marketing, 58(July), 20–38. https://doi.org/10.1177/002224299405800302
  51. Mulia, D., Usman, H., & Parwanto, N. B. (2020). The role of customer intimacy in increasing Islamic bank customer loyalty in using e-banking and m-banking. Journal of Islamic Marketing, 12(6), 1097–1123. https://doi.org/10.1108/JIMA-09-2019-0190
  52. Nawi, N. B. C., Mamun, A. Al, Hayat, N., & Mohiuddin, M. (2022). Sustainable Customer Retention: A Study on Social Media Marketing Activities, Brand Equity and Smartphone Purchase Intention among Generation Y. Vision. https://doi.org/10.1177/09722629221096793
  53. Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A Conceptual Model of Service Quality and Its Implications for Future Research. Journal of Marketing, 49(4), 41. https://doi.org/10.2307/1251430
  54. Park, F. K., Doreen Chung, T. L., Gunn, F., & Rutherford, B. (2015). The role of listening in e-contact center customer relationship management. Journal of Services Marketing, 29(1), 49–58. https://doi.org/10.1108/JSM-02-2014-0063
  55. Park, K., & Jang, S. C. (Shawn). (2021). A study of value-relevance and reliability of intangible assets: What do we know from the restaurant industry? Journal of Hospitality and Tourism Management, 47(March), 104–113. https://doi.org/10.1016/j.jhtm.2021.03.002
  56. Qalati, S. A., Li, W., Ahmed, N., Mirani, M. A., & Khan, A. (2021). Examining The Factors Affecting SME Performance: The Mediating Role of Social Media Adoption. Sustainability, 13(1), 1–24. https://doi.org/10.3390/su13010075
  57. Roy, S. K., Paul, R., Quazi, A., & Nguyen, B. (2018). Developing a service value measurement scale in retail banking services: Evidence from India. International Journal of Bank Marketing, 36(4), 616–633. https://doi.org/10.1108/IJBM-03-2017-0055
  58. Rupeika-Apoga, R., & Petrovska, K. (2022). Barriers to Sustainable Digital Transformation in Micro-, Small-, and Medium-Sized Enterprises. Sustainability (Switzerland), 14(20). https://doi.org/10.3390/su142013558
  59. Saeed, M., & Binti Abdul Ghani Azmi, I. (2019). The nexus between customer equity and brand switching behaviour of millennial Muslim consumers. South Asian Journal of Business Studies, 8(1), 62–80. https://doi.org/10.1108/SAJBS-04-2018-0046
  60. Søderholm, W., Bertsch, G., Sawe, A., & Lee, D. (2018). Who Trusts Social Media? Computers in Human Behavior, 81 April, 303–315
  61. Stewart, M. C., & Arnold, C. L. (2017). Defining Social Listening: Recognizing an Emerging Dimension of Listening. International Journal of Listening, 32(2), 85–100. https://doi.org/10.1080/10904018.2017.1330656
  62. Tatar, Ş. B., & Eren-Erdoğmuş, İ. (2016). The effect of social media marketing on brand trust and brand loyalty for hotels. Information Technology and Tourism, 16(3), 249–263. https://doi.org/10.1007/s40558-015-0048-6
  63. Upadhyay, Y., Paul, J., & Baber, R. (2022). Effect of online social media marketing efforts on customer response. Journal of Consumer Behaviour, 21(3), 554–571. https://doi.org/10.1002/cb.2031
  64. Verma, P. (2020). The Effect of Brand Engagement and Brand Love upon Overall Brand Equity and Purchase Intention: A Moderated –Mediated Model. Journal of Promotion Management, 27(1), 103–132. https://doi.org/10.1080/10496491.2020.1809591
  65. Wang, H., Kim, K. H., Ko, E., & Liu, H. (2016). Relationship between service quality and customer equity in traditional markets. Journal of Business Research, 69(9), 3827–3834. https://doi.org/10.1016/j.jbusres.2016.04.007
  66. Wang, H., Ko, E., Woodside, A., & Yu, J. (2020). SNS marketing activities as a sustainable competitive advantage and traditional market equity. Journal of Business Research, 130(August 2019), 378–383. https://doi.org/10.1016/j.jbusres.2020.06.005
  67. Whan Park, C., Maclnnis, D. J., Priester, J., Eisingerich, A. B., & Lacobucci, D. (2010). Brand attachment and brand attitude strength: Conceptual and empirical differentiation of two critical brand equity drivers. Journal of Marketing, 74(6), 1–17. https://doi.org/10.1509/jmkg.74.6.1
  68. Yu, X., & Yuan, C. (2019). How consumers’ brand experience in social media can improve brand perception and customer equity. Asia Pacific Journal of Marketing and Logistics, 31(5), 1233–1251. https://doi.org/10.1108/APJML-01-2018-0034
  69. Yu, X., Yuan, C., Kim, J., & Wang, S. (2021). A new form of brand experience in online social networks: An empirical analysis. Journal of Business Research, 130(June 2019), 426–435. https://doi.org/10.1016/j.jbusres.2020.02.011
  70. Yuan, C. L., Kim, J., & Kim, S. J. (2016). Parasocial relationship effects on customer equity in the social media context. Journal of Business Research, 69(9), 3795–3803. https://doi.org/10.1016/j.jbusres.2015.12.071
  71. Yuan, C. L., Moon, H., Kim, K. H., & Wang, S. (2021). The influence of parasocial relationship in fashion web on customer equity. Journal of Business Research, 130(August), 610–617. https://doi.org/10.1016/j.jbusres.2019.08.039
  72. Zahoor, S. Z. (2022). Analysing the Effect of Social Media on Customer Equity: A Study of Fast-food Restaurants. Vision, November. https://doi.org/10.1177/09722629221107228
  73. Zhu, W., Mou, J., & Benyoucef, M. (2019). Exploring purchase intention in cross-border E-commerce: A three stage model. Journal of Retailing and Consumer Services, 51(May), 320–330. https://doi.org/10.1016/j.jretconser.2019.0

Last update:

No citation recorded.

Last update:

No citation recorded.