The Moderating Effect of Customer Engagement on the Brand Image – Brand Loyalty Relationship

Abstract

Customer engagement is one of todays key research issues and can be defined as first, a psychological process of the customer that leas to the formation of loyalty. Second, a customer's behavioral manifestation towards a brand or a firm, beyond purchase, resulting from motivational drivers and third, a psychological state that is characterized by a degree of vigor, dedication, absorption, and interaction. Customer engagement can take place in an offline or online environment whereas online customer engagement has gained increasing attention due to the rise of social networking sites. Especially social networking sites, namely facebook give companies the chance to engage their customers and potential customers to greater interaction. As empirical studies of customer engagement behaviour on social networking sites are still scarce, the contributions of this study are as follows: First, a conceptual model for the measurement of antecedents and consequences of customer engagement is introduced. Second, a set of measures to capture the antecedents, level of customer engagement and consequences is developed. Third, the moderating effect of customer engagement on the brand image – brand loyalty relationship is tested.The model has been empirically tested by collecting data on a facebook fan page of our students. First, a survey has been distributed to collect data about antecedents of customer engagement, second, by conducting an experiment on the fanpage, engagement behaviour has been monitored to avoid single source bias within the data. To estimate the main effects as well es testing the hypotheses, partial least squares was used. The study provides insights in two aspects: First, a model for explaining customer enagement behaviour on a facebook fan page is derived. Second, the analysis shows a significant moderating impact of customer engagement on the brand image – brand loyalty relationship. Thus, the results can give managers insights, how engagement behaviour leverages loyalty and therefore might have a measureable economic benefit for companies engaging on a social networking site.