The Impact of Social Media on Brand Loyalty: Achieving “E-Trust” Through Engagement

The Impact of Social Media on Brand Loyalty: Achieving “E-Trust” Through Engagement

DOI: 10.4018/978-1-5225-5143-0.ch007

Abstract

Companies are always looking for different ways to increase their profits, and they often find themselves searching for new customers to grow their business. Acquiring new customers costs more than trying to encourage current ones to repurchase. This is the value of customer loyalty. In this chapter, the concept of brand loyalty is explored along with elements that influence it. In order to achieve loyalty, firms need to increase brand engagement to build deeper relationships with their customers. In previous chapters, the role of social media in brand engagement was explored, and as a result, the role of social media in creating brand royalty is explored in this chapter.
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Introduction

Since its inception, the concept of customer loyalty and zero defection has been a challenge for managers (Reichheld & Sasser, 1990). It has never been as important as it is now, as consumers are asking for higher quality in their products and services. Different items such as brand image have an impact on customer loyalty (Antheunis, Valkenburg, & Peter, 2010; Kandampully & Suhartanto, 2000). Having a high quality product does not guarantee customer loyalty, and companies who seek it should focus on creating unique values for their. The advent of internet and social media have been a tremendous help for managers in this area, as it can provide the infrastructure needed to maintain long-term relationships with valuable customers (Craig, 2007; Zineldin, 2006).

Social media platforms such as twitter and Facebook have changed the landscape of marketing and communication by empowering consumers (Aladwani, 2014; Smith, 2009; Cheung, Chiu, & Lee, 2011). Media consumption habits of consumers have changed as these platforms become more popular, and the value of social media in the context of communication now far exceeds that of their traditional counterparts. Social media marketing (SMM) is regarded as a crucial part of marketing strategy of companies, as marketers can use social media to build valuable relationships with customers and improve brand awareness. Marketers can observe customer behavior on social media as well, which can lead to higher quality products and services. They can also gather demographic and behavioral data to improve their targeted efforts in marketing and improve efficiency in the process, which is important for smaller companies (Chen, Lu, Wang, Zhao, & Li, 2013; Choi & Bazarova, 2015, Krasnova, Spiekermann, Koroleva, & Hildebrand, 2010; Tutel, 2008). Social media can be used for reaching new consumers as well as maintaining relationships and engaging with current customers (Lim, Hwang, Kim, & Biocca, 2015; Luo, Zhang, & Liu, 2015; Mohammadi, 2015; Oztaysi, Sezgin, & Ozok, 2011; Palmer & Koenig-Lewis, 2009).

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