Modeling Customer Equity: The Roles of Social Networking Sites, Trust, and Brand Equity
The popularity of social networking sites (SNSs), especially Facebook and Twitter has grown tremendously in the past few years. Internet World Stats (2012) reports that more than 835 and 140 million are active users of Facebook and Twitter, respectively.
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tant component of successful relationship marketing (Arnett and Badrinarayanan 2005). A substantial empirical study indicates the impact of relationship marketing on behavioral loyalty. That is, consumers engage in relational marketing can lead to greater marketing efficiency, such as customer retention and commitment to the brand (Sheth and Parvatiyar 1995). Successful relationship marketing can influence purchase intention (Mittal et al. 1999) and improve customer loyalty, and firm performance through stronger relational bonds (Wulf et al. 2001). Perceived Benefits of SNSs and Trust toward SNSs SNSs are applications that enable users (both individuals and brands) to creating their profiles and connecting to others by sending instant message (Kaplan and Haenlein 2010). Previous studies indicated that consumers tend to engage in SNSs communities because of perceived benefits (i.e., practical, social, and entertainment) derived from SNSs (Gummerus et al. 2012). Practical benefits refer to information obtained from engaging in the SNSs communities. That is, SNSs have been used by consumers to gain recommendations, reviews and opinions from friends or the collective social community. Consumers interact with brand’s SNS because they believe the SNS is the right channel to use to get the benefit they seek such as specific information (Baird and Parasnis 2011). SNS community thus becomes a channel for customer feedback, which lead to practical benefits (Gummerus et al. 2012). In addition, consumers can achieve social benefits by interacting with the firm or other SNS users and gain entertainment benefits (i.e., relaxation, fun) through their participation on SNSs (Gummerus et al. 2012). According to Zucker (1986), trust is defined as an individual’s perceptions of the institutional environment (i.e., the Internet) that stems from embedded social practices, as well as the perceptions resulting from past and expected future exchanges. Luo (2002) indicates that social cues (i.e., consumer behaviors in the community) can influence trust by showing one’s trustworthiness and commitment to the social exchange. Existing research found that consumers are likely to use information obtained from their engagement in SNSs community to infer their trust toward SNSs (McKnight et al. 2002). Likewise, it is expected that consumers may not only evaluate the value of practical benefits, but also social and entertainment benefits derived from their engagement in SNSs to infer their trust toward SNSs. Therefore, H1: Perceived benefits of SNSs will influence trust toward SNSs. Trust towards SNSs and Brand Equity McKnight et al. (2002) found that consumers who trust the vendor’s website are also likely to display high degree of trust towards a specific vendor. Furthermore, consumers’ perceived competency, benevolence, and integrity of the vendor could result in a secure willingness to depend on the vendor (McKnight et al. 2002). Simply stated, trust towards the website is likely to enhance firm’s positive image, which consequently results in con
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