Does social media affect performance in e-commerce business? The role of customer management

Abstract

Technological innovation can help a business gain maximum profits. Previous studies have proven that social media is vital for improving performance, but research gaps remain. This research aims to examine the influence of social media on enhancing performance and analyze the moderating role of customer management. The unit of analysis in this research is micro-scale e-commerce businesses in Indonesia. This business is exciting to study because most households in Indonesia depend on this business for their livelihood. This business has also saved the Indonesian economy from recession. The data used in this research is secondary data totalling 11,077 units and was processed using the STATA 17 application. Because the dependent variable in this research is dichotomous, this research uses binary logistic regression analysis. The research results show that social media has a positive effect on performance. However, customer management was unable to moderate the relationship. These findings support the Resource-Based View theory by highlighting the importance of technological innovation in the form of social media, which can be built in such a way as to achieve sustainable competitive advantage and ultimately increase performance. Practically, this research can be a reference for entrepreneurs to optimize the use of social media and improve customer management so that maximum profits can be realized.