ContentServer

Social media is likely to be relevant for companies and brands as part of their overall communications and marketing strategies, and for some it is also an opportunity to build a relationship that could lead to attitudinal loyalty, assuming that it is also able to deliver on trust and satisfaction in the absence of transactional opportunities from which these would be stimulated. What seems apparent is that social media can play an important role in brand advocacy, word of mouth, and relationship building.

Attitude towards social networking sites

Again, limited research can be found to determine consumer attitudes towards social networking sites. However, from what is available, there appears to be a definite group of consumers who actively seek to connect with brands on a communication level. In a recent study of consumers who actively use social media as a channel for communication, 32.5% felt neglected or ignored, and 27.1% stated that if ignored they would cease doing business with the company. Interestingly, in this study, 32.4% are overall dissatisfied with the way that companies currently use social media to “communicate with customers”. Only 8% were extremely satisfied. (Conversocial, 2011). With regard to advertising only “22% of consumers had a positive attitude towards social media advertising” (Taylor, Lewin & Strutton, 2011).

Given this, it can be surmised that, in light of other findings in this paper, in general, consumers are positive towards social media and brands or organisations, however they are now more fastidious when it comes to brands communicating through this medium. The above research shows that for brands that do choose to engage with consumers on social media networks, more effort should be applied to ensure the engagement is on the terms of the consumers. In other words, providers should not take advantage of the medium to inundate consumers with marketing messages or advertising and must live up to their perceived promise of communications by indeed making it two-way.

User attitudes towards brands online appear to be positive and open to opportunities, especially as a communications or customer service channel. Based on this, attention can now be turned to more specifically to Social Media as a loyalty generation tool.

Social media and loyalty

Earlier discussion has shown that customer loyalty can be generated if the key loyalty drivers are present and supportive of customer satisfaction, trust, and emotional bonding, as depicted in Figure 2.

If a loyalty activity delivers these successfully, then customer loyalty creation has potential. Traditional loyalty activities, which include such things as point-based or recognition-based “programmes”, are developed around these three drivers (among others), and hence have a high propensity to create the desired loyalty by design, and their effectiveness is measured against their ability to deliver on these.

However, taking this further into the non-traditional arena, if social media are to be effective, they must also be able to support the development of these key loyalty drivers.

Referencing Figure 2, satisfaction and trust can be built via activities designed to delight the customer, create value for the customer, and build a relationship through the appropriate level of investment. Trust and satisfaction then lead to an emotional bond over time, which is the basis for attitudinal loyalty. It is important to note that behavioural loyalty could be created on the basis of satisfaction and trust alone, without the need for an emotional attachment.

Satisfaction

Building a satisfying experience is considered a key component of developing an environment that can lead to loyalty. Interactions between a service provider and a customer can be considered “satisfying” if the end result meets the customer’s expectations with regard to value, quality, and service levels. A series of satisfying encounters will often lead to loyalty as a result of building trust, with this potentially developing into an emotional bond (see Figure 2), and then to loyalty.

Traditional loyalty activities aim to deliver satisfying encounters through engaging with customers one-to-one and implementing initiatives specifically designed to ensure extra value and superior customer service is received. Attention to detail and a deeper understanding of the customer will allow the service provider to meet the needs of the customers effectively and consistently throughout the duration of the relationship, and with the intention of improving on this over time.

For social media to contribute to or create the right environment from which loyalty can develop, it must therefore be able to deliver a series of satisfying encounters with consistency and reliability. Noting social media’s characteristics, customer interactions with the service provider would be limited to the key usage functions of this medium, namely to keep up to date with product news and updates, to manage customer service enquiries, and to be associated with favourable brands. Relationship building in this regard would be limited in opportunity, particularly when outside of a purchase transaction whereby the service provider has the opportunity to deliver value, quality, and sales-associated customer service interactions.

Figure 2 Social media and drivers of loyalty

Proposition 1: Social media can contribute to the building of loyalty if it can deliver a series of satisfying encounters with the consumer.

Trust

Trust has been defined “as a consumer’s confident beliefs that he or she can rely on the seller to deliver Promised services” (Agustin & Singh, 2005, p. 97). Without trust, customers are likely to cease to transact with a particular service provider, however, when trust is present, customers will be more inclined to reward a service provider with their loyalty (Agustin & Singh, 2005, p. 97). For this reason, it is considered essential to the creation and maintenance of loyalty, and goes hand-in-hand with satisfaction and the creation of an emotional bond.

Trust can be generated by the provider through matching expectations with delivery, through employing fairness and equity when transacting with customers (Boles, Johnson & Barksdale, 2000), and through other means such as word of mouth. Traditional loyalty activities aid the development of trust by building on the trust already created during the customer-service provider encounter and building and maintaining the resulting on-going relationship, deepening the trust through continual relationship maintenance, benefits delivery, and service over and above the standard in order to recognise the value of the customer to the firm.

Building trust from a social media perspective would rely on the media’s ability to deliver equitability and fairness, and to deliver on promises in a way that customers can rely on, over and above merely creating “satisfying encounters”. The nature of social media as a socially interactive tool as opposed to a delivery channel would both aid and hamper it’s ability to meet these objectives from a loyalty view. To aid, social media would have the ability to proactively and reactively address negative PR, as well as to address specific one-to-one communication needs. However, its usage in ensuring that service or product delivery is met is limited.

Proposition 2: Social media can build loyalty through the development of trust when created through two-way communications, and where equitability and fairness is shown.

Emotional Bond

As discussed above, an emotional bond can be derived in part by achieving consumer trust and satisfaction. An emotional bond is considered an important aspect of driving loyalty (Mattila, 2001, p. 92) and can be created through a two-way exchange, over time, between a consumer and a service provider, and in addition to trust and satisfaction, can be achieved through such things as understanding personal preferences, as well as a high level of personalisation to customise the relationship and service delivery (Mattila, 2001, p. 92).

Traditional forms of loyalty activities are designed to deliver a high degree of personalisation through communications and other benefits that keep the consumer engaged with the brand. This is possible through one- to-one communications with personalised messages based on behavioural details and preference information collected by the service provider. The

138The Marketing Review, 2013, Vol. 13, No. 2

emotional bonding then often results when customers receive benefits as a result of building a long-term relationship, as well as reducing their risk (real or perceived) of doing business by engaging with someone they already know and trust (Mattila, 2001, p. 92).

For social media to enable the same development of an emotional bond, similar factors as above would need to be present. Repeated exposure to the relationship would be required, via purchase transactions or other interactions with the provider. This on-going relationship would strengthen as trust builds as a result of successful interactions, and also as a result of any special benefits and personalisation the consumer may receive. If social media can orchestrate such a relationship, then its ability to engender loyalty may increase accordingly.

Proposition 3: Social media has a potential to build emotional bonds through its ability to create an on-going relationship with the consumer, by understanding their personal preferences, and by keeping them engaged with the brand through one-to-one communications.

Conclusion

Whilst research has shown a definite increase in individual and company engagement in social media, its impact in respect to generating loyalty appears to be unsubstantiated to date. Hence, this paper looked at the two primary types of loyalty, behavioural and attitudinal, in an attempt to link social media characteristics and consumer usage to determine its role in loyalty generation.

An investigation of the primary loyalty drivers of delighting the customer, providing superior value, and demonstrating an investment in the relationship showed that a product or service provider could stimulate loyalty by generating satisfaction and trust through these drivers. Once satisfaction and trust have been established, an emotional bond can be created, leading to the desired loyalty.

Propositions have been put forward to simply state that if social media were able to follow the same process then it too could potentially generate loyalty. However, social media has certain limitations that could hamper its success in this regard.

First, in the generation of satisfaction, it was posited that social media could contribute to the building of loyalty if a series of satisfying encounters with the consumer could be delivered. However, consumer interactions with social media appear to be limited to brand association and communication, and not to transactional encounters in the traditional sense of offline or online shopping. This limits the breadth of encounter opportunities from which social media can create satisfying experiences.

Second, social media is again limited in its ability to generate trust through transactional encounters and must rely on its communicative nature through which to build this. In other words, trust would need to be built from a series of satisfying brand-communication encounters instead of transactional encounters.

Finally, the essential element of an emotional bond creation was looked at and a suggestion put forward that an on-going relationship built via the online environment afforded by social media could contribute to loyalty, even in the absence of transactional encounters. By its nature, social media is a two-way communication tool and hence building the relationship with the consumer would in fact be possible.

Given the above, it seems possible but inconclusive that social media could be used to generate attitudinal loyalty by virtue of its communicative nature, however using social media in the development of behavioural loyalty, on the other hand appears not to be supported to the same extent given the absence of transactional encounters.

References

Ad Age (2011, May 16). The Demographics of Social Media. Retrieved January 10, 2012, from www.adage.com: http://adage.com/article/adagestat/demographics- facebook-linkedin-myspace-twitter/227569/

Agustin, C., & Singh, J. (2005). Curvilinear Effects of Consumer Loyalty - Determinants in Relational Exchanges. Journal of Marketing Research, 42(1), 96-108.

Anderson, E.W., Fornell, C., & Lehmann, D.R. (1994). Customer Satisfaction, Marketshare and Profitability: Findings from Sweden. Journal of Marketing, 58(3), 53-66.

Anderson, R.E., & Srinivasan, S.S. (2003). E-Satisfaction and E-Loyalty: A Contingency Framework. Psychology & Marketing, 20(2), 123-128.

Arthur, C. (2012, May 15). Twitter now has 10m users in UK. Retrieved from The Guardian: http://www.guardian.co.uk/technology/2012/may/15/twitter-uk- users-10m

Bennett, S. (2012, Jan 23). The Numbers Just Keep On Getting Bigger: Social Media And The Internet 2011 [STATISTICS]. Retrieved from Media Bistro: http://www. mediabistro.com/alltwitter/social-media-internet-2011_b17881

Bitner, M.J., & Hubbert, A.R. (1994). Encounter satisfaction versus oerall satisfaction versus quality. In R.T. Rust & R.L. Oliver, Service Quality: New directions in theory and practice (pp. 72-94). Thousand Oaks: Sage Publications Inc.

Boles, J.S., Johnson, J.T., & Barksdale, J.H. (2000). How Salespeople Build Quality Relationships: Journal of Business Research, 48(1), 75-81.

Bowen, J.T., & Shiang-Lih, C. (2001). The relationship between customer loyalty andcustomer satisfaction. International Journal of Contemporary Hospitality Management, 13(5), 213-217.

Boyd, D.M., & Ellison, N.B. (2007). Social Network Sites: Definition, History, and Scholarship. Journal of Computer-Mediated Communication, 13(1), 210-230.

Brown, G.H. (1952). Brand Loyalty - Fact or Fiction? Advertising Age, 23, 53-55. Cone Communications (2010). 2010 Consumer New Media Study. Retrieved from

www.coneinc.com: http://www.coneinc.com/news/request.php?id=3425 Conversocial (2011, December 12). The Consequences of Ignoring Your Customers

- A Survey of Consumer Expectations for Customer Service on Social Media Platforms. Retrieved January 11, 2012, from www.conversocial.com: http:// www.conversocial.com/resources#research-papers

Czepiel, J.A., & Gimore, R. (1987). Exploring the Concept of Loyalty in Services. In J.A. Czepiel, C.A. Congram & J. Shanahan, The Services Challenge: Integrating for Competitive Advantage (pp. 91-94). Chicago: American Marketing Association.

Day, G.S. (1969). A two-dimensional concept of brand loyalty. Journal of Advertising Research, 9, 29-36.

140The Marketing Review, 2013, Vol. 13, No. 2

De Wulf, K., Oderkerken-Schroeder, G., & Iacobucci, D. (2001). Investments in Consumer Relationships: A cross-country and cross-industry exploration. Journal of Marketing, 65, 33-50.

East, R., Harris, P., Lomax, W., Willson, G., & Hammond, K. (1998). Customer defection from supermarkets. In J. W. Alba & J.W. Hutchinson, Advances in Consumer Research (pp. 507-512). Provo, Utah: Association for Consumer Research.

Fornell, C. (1992). A national customer satisfaction barometer: the swedish experience.

Journal of Marketing, 56(1), 6-21.

Hamilton, J. (2010). Be Social-Media Pro. Wards Dealer Business, 44(8), 4.

Harnack, L. (2012, February 15). New Media Marketing. Mass Transit Mag, Retrieved from http://www.masstransitmag.com/article/10219100/new-media-marketing Jacoby, J., & Chestnut, R.W. (1978). Brand Loyalty: Measurement and Management.

New York: Wiley.

Kaplan, A.M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, 53(1), 59-68.

Kim, D.J., Ferrin, D.L., & Rao, H.H. (2009). Trust And Satisfaction, Two Stepping Stones For Successful E-Commerce Relationships: A Longitudinal Exploration.

Information Systems Research, 20(2), 237-257.

Kuehn, A. (1962). Consumer brand choice as a learning process. Journal of Advertising Research, 2(December), 10-17.

Lee, J., Lee, J., & Feick, L. (2001). The impact of switching costs on the consumer satisfaction-loyalty link: Mobile phone service in France. Journal of Services Marketing, 15(1), 35-48.

Lipstein, B. (1959). The dynamics of Brand Loyalty and Brand Switching. Fifth Annual Conference of the Advertising Research Federation (pp. 101-108). New York: Advertising Research Federation.

Mangold, W.G., & Faulds, D.J. (2009). Social media: The new hybrid element of the promotion mix. Business Horizons, 52(4), 357-365.

Mattila, A.S. (2001). The Impact of Relationship Type on Customer Loyalty in a Context of Service Failures. Journal of Service Research, 4(2), 91-101.

McKnight, D.H., Choudhury, V., & Kacmar, C. (2002). The impact of initial consumer trust on intentions to transact with a web site: a trust building model. Journal of Strategic Information Systems, 11(3-4), 297-323.

Nelson, C.C. (1996). An empirical examination of switching costs investments in business-to-business marketing relationships. The Journal of Business and Industrial Marketing, 11(6), 38-60.

Nguyen, T.H., Sherif, J.S., & Newby, M. (2007). Strategies for successful CRM implementation. Information Management & Computer Security, 15(2), 102115.

Oliver, R.L. (1999). Whence customer loyalty? Journal of Marketing, 63(Special Issue), 33-44.

Online Marketing Trends (2011, March 29). MySpace V Facebook - Who’s Winning and Why? Retrieved January 10, 2012 from http://www.onlinemarketing-trends. com/2011/03/myspace-vs-facebook-who-is-winning-and.html

Parasuraman, A., & Grewal, D. (2000). The impact of technology on the quality-value- loyalty chain: A research agenda. Journal of Academic Marketing Science, 28(1), 168-174.

Park, C.W., & Macinnis, D.J. (2006, June). What’s In and What’s Out: Questions on the Boundaries of the Attitude Construct. Journal of Consumer Research Inc, 33, 16-18.

Park, C.W., Macinnis, D.J., & Priester, J. (2006, December). Beyond Attitudes: Attachment and consumer behaviour. Seoul National Journal, 12(2), 3-36.

Ray, J.S. (2011, April 8). Facebook: A Case Study of Strategic Leadership. Zurich: Swiss Management Center Learning Center. Retrieved from SSRN: http://ssrn. com/abstract=2103975 or http://dx.doi.org/10.2139/ssrn.2103975

Reichheld, F., & Sasser, W.E. (1990, September/October). Zero defections: quality comes to services. Harvard Business Review, 68(5), 105-111.

Rust, R.T., & Zahorik, A.J. (1993). Customer Satisfaction, Customer Retention and Market Share. Journal of Retailing, 69(2), 193-215.

Shankar, V., Smith, A.K., & Rangaswamy, A. (2003). Customer Satisfaction and Loyalty in Online and Offline Environments. International Journal of Research in Marketing, 20(2), 153-175.

Taylor, D.G., Lewin, J.E., & Strutton, D. (2011). Friends, Fans, and Followers: Do Ads Work on Social Networks? Journal of Advertising Research, 51(1), 258-275.

About the Authors and Correspondence

Kerrie Hawkins has worked within advertising and marketing agencies for 19 years, specialising in loyalty marketing for the last seven. She has experience working across loyalty programs in both the Australian and Middle East markets. Kerrie holds a masters degree in International Business from the University of Wollongong in Dubai to complement her passion for working within the loyalty field. Special interest areas include social media influence on consumer loyalty, as well as understanding the true nature of loyalty and what is really behind a company’s desire to ceate it.

Kerrie Hawkins, Independent Analyst - Social Media, Dubai, UAE

Prakash Vel is an Associate Professor with the University of Wollongong in Dubai (UOWD) in the Faculty of Business and Management. He has 21 years of experience in academics and industry, put together, in marketing. His industry and academic career spans across India, Bahrain, Singapore, Malaysia, Dubai and Kuwait. In offering his services as an academic at the degree and masters levels, he has supervised around 200 research projects, done in different industries. He has been an active consultant and a trainer for more than 16 clients in India, Singapore and Malaysia, Kuwait and Dubai which include domestic and multinational companies. He has authored a book on marketing research and has also been a freelance marketing researcher with Taylor Nelson Sofres (UK), Synovate Research (Malaysia) and YouGovSiraj (Dubai). His areas of academic research include consumer behaviour, marketing of services and strategic marketing and he has presented his research papers in international conferences in USA, Spain, Italy, France, Finalnd, Austria, Switzerland, United Kingdom, Hungary, Germany and other countries. He has published his papers in more than 15 international journals. He is a member of the Chartered Institute of Marketing, UK.

Corresponding author: Dr Prakash Vel, Associate Professor, University of Wollongong in Dubai, Block 15, Knowledge Village, P O Box 20183, UAE

E prakashvel@hotmail.com

© of Marketing Review is the property of Westburn Publishers Ltd or its licensors and its content may not be copied or e-mailed to multiple sites or posted to a listserv without first obtaining the copyright holder's express written permission. However, users may print, download, or e-mail articles for individual, non-commercial use only. This article has been reproduced by EBSCO under license from Westburn Publishers Ltd.