Converting Consumer Engagement on Social Media Platforms to Store Visits, Purchases and Enhanced Profitability

30 May 2017 08:22

(updated: 30 May 2017 08:32)

Converting Consumer Engagement on Social Media Platforms to Store Visits, Purchases and Enhanced Profitability

Read new CSI blog by Birgit A.A. Solem and Linda Hollebeek.

Internet-based sales have been subject to substantial growth over the last two decades, including the rise of e-commerce, e-tailing, and social commerce (i.e. sales via social media, such as Instagram, Pinterest, etc.).

Social media are thus of high importance for retailers in terms of developing and nurturing consumer engagement (Sasser et al. 2014; Jahn & Kunz 2012), as Hollebeek and Solem (2017) highlight in their forthcoming book chapter titled ‘The Consumer Engagement/Return on Social Media Engagement Interface’ to be published in Contemporary Issues in Social Media Marketing (edited by B. Rishi and S. Bandyopadhay).

Drawing on Internet-based technologies, social media offer interactive engagement platforms (Breidbach et al. 2014) that facilitate one-on-one, one-to-many and many-to-many communications and consumer participation in communities and networks of  interest (Baumöl et al. 2016; Baethge et al. 2016). Kaplan and Haenlein (2010) identify two major benefits of social media marketing, including: (i) the ability to reach global audiences instantly and at relatively low cost; and (ii) the capacity to influence consumer motivation and behavior (Hollebeek and Solem 2017). Following Hollebeek et al. (2016), we define social media-based consumer engagement as “a consumer’s cognitive, emotional, and behavioral investments into interactions with a particular brand on social media.” In this conceptualization, consumers’ latent cognitive and emotional brand-related investments can be observed through their visible behavioral investments termed ‘activation’ (Hollebeek et al. 2014, Solem & Pedersen, 2016b).

References:

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Baumöl, U., Hollebeek, L., & Jung, R. (2016). Dynamics of customer interaction on social media platforms. Electronic Markets, 26(3), 199-202.

F. Breidbach, C., Brodie, R., & Hollebeek, L. (2014). Beyond virtuality: from engagement platforms to engagement ecosystems. Managing Service Quality, 24(6), 592-611.

Buhalis, D., & Mamalakis, E. (2015). Social media return on investment and performance evaluation in the hotel industry context. In Information and Communication Technologies in Tourism 2015 (pp. 241-253). Springer International Publishing.

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Hollebeek, L. D., Glynn, M. S., & Brodie, R. J. (2014). Consumer brand engagement in social media: Conceptualization, scale development and validation. Journal of interactive marketing, 28(2), 149-165.

Hollebeek, L. D., Conduit, J., & Brodie, R. J. (2016). Strategic drivers, anticipated and unanticipated outcomes of customer engagement.

Hollebeek, L. & Solem, B. (2017), The Consumer Engagement/Return on Social Media Engagement Interface: Development of a Conceptual Model, In: Rishi, B. & Bandyopadhay, S. (Eds.), Contemporary Issues in Social Media Marketing, London: Routledge.

Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co-creation: a service system perspective. Journal of Service Research, 17(3), 247-261.

Jahn, B., & Kunz, W. (2012). How to transform consumers into fans of your brand. Journal of Service Management, 23(3), 344-361.

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Solem, B. A. A., & Pedersen, P. E. (2016). The effects of regulatory fit on customer brand engagement: an experimental study of service brand activities in social media. Journal of Marketing Management, 32(5-6), 445-468.

Solem, B. A. A., & Pedersen, P. E. (2016). The role of customer brand engagement in social media: conceptualisation, measurement, antecedents and outcomes. International Journal of Internet Marketing and Advertising, 10(4), 223-254.

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Consumers’ behavioral investments in social media-based brand interactions usually occur outside of (or beyond) exchange or purchase situations (Van Doorn et al. 2010; Solem & Pedersen 2016a). Jaakkola and Alexander (2014) propose the following types of consumers’ behavioral investments:

(i)            Augmenting behavior: Consumer contributions of resources (e.g. knowledge, skills, and time) that directly add to the focal firm’s offering (e.g. sharing brand knowledge on social media);

(ii)           Codeveloping behavior: Consumer resource contributions to facilitate the firm’s development of its offering (e.g. contributions to new product or service development);

(iii)          Influencing behavior: Consumer resource contributions to affect other friends’ perceptions, preferences, or knowledge about the firm (e.g. through opinion leaders’ social media posts or blogs that gains likes, comments and shares); and

(iv)          Mobilizing behavior: Consumer resource contributions to motivate other stakeholders’ actions toward the firm (e.g. via brand recommendations that may stimulate others to purchase a brand).

In addition to the importance of fostering consumers’ behavioral engagement, we also draw attention to how online consumer engagement drives offline engagement, including consumer visits to physical stores and purchases. In the chapter, we argue for the importance of examining non-financial (e.g. word of mouth), as well as financial (e.g. sales, shareholder value) effects accruing from social media-based consumer engagement. In particular, we introduce the term ‘Return on Social Media Engagement’ (ROSME), which describes the relationship between the profitability level gained from the firms’ investments made into marketing activities and events for the purpose of engaging consumers (Buhalis & Mamalakis 2015; Friedlob & Plewa 1996). Managerial adoption of ROSME thus facilitates the development of enhanced accountability of firm-based investments in social media marketing.

We expect consumers’ online social media behaviors to link strongly to offline brand-related engagement behaviors (Hanna et al. 2011; Gummerus et al. 2012; Laroche et al. 2013). Correspondingly, we ask the following question: To what extent will consumers’ online engagement have a positive association with retailers’ offline ROSME?

For traditional brick-and-mortar retailers, (radical) technological changes (including e-tailing) are typically considered a major threat to their business. A critical question to the management of those physical stores includes: How can social media platforms, including Facebook store profiles, event pages, communities, Instagram profiles, YouTube videos, etc. be utilized to route an increased flow of consumer traffic to their physical stores?

We believe that the attainment of high levels of consumer engagement will help convert consumers from purely visiting online consumer touchpoints, to considering and/or visiting brick-and-mortar touchpoints; thereby contributing to firms’ ROSME.

Results from eleven pop-up stores (e.g., car dealer, local grocery store, organic cosmetic, jeweller, ladies’ wear, brewery, etc.), in one of Norway’s towns indicate that it is challenging to increase store visits and sales from favorable online consumer engagement (i.e. likes, comments and shares) alone. Each of the examined pop-up stores communicated their daily pop-up shop programs either on their Facebook store profiles (containing organic and sponsored posts), pop-up event pages, or through a pop-up community, generating significant likes, comments and shares. However, the analyses shows that even where online consumer engagement is high, mobilizing these consumers to visit the shop as the next step of their customer journey appeared testing. While the more “open” Facebook store and event pages could not document engagement effects on store visits, the pop-up community was the only platform that was documenting significant store visit effects. These results indicate that consumers are more supportive when they are self-elected members of communities rather than following a firm or a brand on more “open” Facebook store profiles or event pages. Thus, for retailers it seems easier to mobilize existing and loyal consumers to visit their store through community activities rather than influence and convince new and potential consumers through social media marketing. However, further research is needed to better understand the development, and conversion, of online into offline consumer engagement and sales increases.

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