Social Media and its Effect on Consumer Loyalty

Abstract

Due to the increasing number of users and powerful Web-based tools available today on social networks such as Facebook, enterprises are strategically focusing on the marketing opportunities provided by social media. In fact, presence on a social network such as Facebook can provide the firm with a mechanism for gathering consumer information quickly on a wider segment of the population. This chapter investigates the effectiveness of the firm's presence on social networks and their effect on the firm and the consumer. It attempts to identify a possible linkage between a firm's presence on a social network and consumer loyalty by addressing critical elements useful for developing new and efficient strategies based on online channels. The data collected from 1,520 surveying Facebook users was analyzed using the Structural Equation Modelling (SEM) technique. The results suggest there is a strong relationship between the firm's presence on the social network and consumer loyalty, thus contributing to the sustained marketing strategies of “social commerce.” Hence, a page rich in content has a positive influence on consumer judgement and loyalty toward the firm with benefits for consumer-centric-oriented strategies.