Examining the role of customer engagement in augmenting referral value

Abstract

PurposeThe purpose of this paper is to examine the impact of a customer engagement-enabling platform on a value captured by the firm and value acquired by the customer. It explores the relevance of relational and expertise value for customers during the engagement process so as to ensure positive referrals about the service provider.Design/methodology/approachUsing a sample of 482 students, the study examines the customer engagement efforts of professional institutes that provide training to prepare for the civil service examinations of the Union Public Service Commission. The survey is confined to central areas of New Delhi, India. Statistical techniques including confirmatory factor analysis and structural equation modelling are used to analyse the data, and reliability and validity tests are performed.FindingsThe findings reveal the indispensable role of service providers as creators of a meaningful effective learning process and of interpersonal relations with customers for generating more business through customer referrals.Research limitations/implicationsThe study validated the moderating role of relational value between customers’ expertise value and their referrals on the basis of motivation theory, which asserts that customers’ motivation to contribute to the organisation is driven by the individuals’ extrinsic relational need for belongingness, acceptance by like-minded individuals, and feedback, recognition and respect from employees of the organisation.Originality/valueThe study contributes to the existing literature by integrating the well-developed social exchange and motivation theory so as to investigate the factors that propel customers’ positive word of mouth for the service provider.