Social Networking Impact on Customer Loyalty: Facebook Case in Erbil-Iraq
Abstract and keywords
Abstract (English):
Nowadays, customers’ loyalty is a key to business achievement and due to vast changes in the marketing world, traditional methods are not enough to meet companies’ needs. Thus, this research investigates the effect of social networking on customer loyalty with a case study of Facebook. Customer loyalty is characterized as a commitment to re-purchase a particular product or service in the future, in spite of external influences. For this purpose, data were collected from 170 social media (Facebook) users in Erbil city by using simple random sampling. The study has found that experience with the product, emotional or rational attachment, promotional offers and information are important factors in terms of establishing customer loyalty on the internet and especially Facebook in the city of Erbil. Moreover, the customer loyalty in this case is very low. Since social media allows firms to engage directly with the end-consumer at a relatively low cost and with a higher level of efficiency, it’s particularly important for small business with limited marketing budgets.

Keywords:
Social networking, customer loyalty, Facebook, word-of-mouth, social factors
Text

Social Networking Impact on Customer Loyalty: Facebook Case in Erbil-Iraq

1. Introduction

 

Social media has empowered people to communicate with hundreds of people at once. Additionally, people have welcomed social networking sites as it allows them to connect and stay in contact with each other regardless of their geographic location and how busy they are in their lives. With the expanding utilization of web-based social media by people, businesses have also started focusing on social media to market and promote their products and services.

 

As people are moving their concentration from traditional advertisements and social networking has been considered as one of the most powerful marketing tools today (Mangold and Faulds, 2009). Therefore, organizations need to focus on the social networking sites to connect customers and increase the customer loyalty level. Facebook is one of the leading social networking sites and this media cannot be overlooked by marketers considering the quantity of time people spent on social networking websites and the quantity of dynamic clients it has.

 

Social media advertising is a new form of promoting that has created a lot of interest in the
traditional media as well. From the marketers’ point of view, web-based social networking can facilitate the marketing process: social media provides the demographics of users, a large mass of people with similar interests in the same place and it is also practically free of charge.

 

As it is commonly comprehended, social media have an impacted on societies as one of this current world’s phenomenon and as the most questionable applications in virtual groups and network. It should be said that the world is getting smaller with expanding popularity of social networks and may set up close relation between individuals.

 

Social networks empower consumers to use and take the benefits of the technology of the covered online social markets. Moreover, social media could have dramatic effects on marketing culture such as advertising, marketing strategies and purchasing habits (Gold Smith, 2006). Consumers usually trust their friends who like them are users than those who are dealing with marketing and selling products (Schindler, 2001).

 

Social networking is growing quickly around the world, has become a powerful force in shaping public opinions on virtually every aspect of commerce. Social networking implies word-of-mouth marketing, and has an expanding impact on clients' purchase decisions and in turn affects customer loyalty. Research by Nielsen Online (2009) focuses that 92% of the social networking users get influenced by the suggestions of the people they know in their online networks. In Carl’s (2005) clarification about peer-to-peer conversation, word-of-mouth recommendations are the most trusted forms of communication.

 

Among all the social networking sites, Facebook is the greatest, with more than 1.32 billion users. More than half of them log in on daily basis according to the official data of the company. The average Facebook user has approximately 130 friends, spend 55 minutes on the site per day and writes 25 comments per month. Every 60 seconds on Facebook 510,000 comments are posted, 293,000 statuses are updated, Users generate 4 million likes every minute, and 136,000 photos are transferred (Facebook, 2017).

 

Worthington et al. (2010) clarified the loyalty concept as a tri-dimensional system. This approach to loyalty is a combination of the customer’s thoughts (cognitive loyalty) and sentiments about a brand (attitudinal loyalty) about a brand, which are consequently expressed in actions (behavioral loyalty).

Brand loyalty can be conceptualized as the last dimension of consumer brand resonance symbolizing with a brand (Keller, 2008). As brands gain exclusive, positive, and prominent significance in the minds of a large number of consumers, they become irresistible and crucial, and win the loyalty of the consumers. Brand loyalty, in return, brings sales revenues, market share, profitability to the firms, and help them grow or at least maintain themselves in
the marketplace (Keller, 2008; Aaker, 1991; Kapferer, 1997).

Many previous researches shows the importance of social networking on loyalty. According to Reichheld and Schefter (2000), there are both economic and competitive elements that indicate that the value of loyalty is even greater on the web than in the physical world. Irem (2012) investigated the scope of customers who follow at least one brand on the social media in Turkey and the data were collected through the administration of a structured questionnaire with a sample of 338 people and tested via stepwise multiple regression analysis. The results of the study showed that brand loyalty of the customers is positively affected when the brand (1) offers advantageous campaigns, (2) offers relevant content, (3) offers popular contents, (4) appears on various platforms and offers applications on social media.

Safko and Brake (2009) define social media as activities, practices, and behaviors among groups of people who assemble online to share data, knowledge, and opinions using conversational media. As a powerful utilization of time and resources, social media marketing give companies’ better correspondence grounds with the buyers to build brand loyalty beyond traditional methods (Jackson, 2011; Akhtar, 2011).

Jafar et al. (2015) analyzed the effect of social media on brand loyalty. The obtained results show that social media has positive effects on customer-product, customer-brand, customer-company, customer-other customer’s relationships which in turn has a positive effect on brand trust, and brand trust has positive effects brand loyalty. They found that brand trust has a quite intermediate role in changing the effects of improved relationships in brand society to brand loyalty. According to Susanne and Hanna (2013), social media allows firms to engage directly with the end consumer  at  a  relatively  low  cost  and  with  a  higher  level  of  efficiency,  it  is  particularly  important for small online branded retailers with limited marketing and  budgets, The  study  has  found  that  gaining  trust  as  well  as  getting  customers  to  recommend a brand,  are two important factors  in terms of establishing customer loyalty on  the Internet. 

 

The aim of this paper is to concentrate on the latter mean of building brand loyalty, social media
marketing, defined as the
procedure that empowers individuals to promote their websites, products, or services through online social channels and take advantage of a substantially bigger group that may not have been available via traditional channels (Weinberg, 2009). More specifically, the paper tries to identify the impact of social media marketing on brand loyalty of the consumers.

 

2. Material and Methods

The objective of this study is to find the impact of social networking, especially Facebook on customer loyalty and to establish an appropriate research strategy for the given problem. The data were collected from 170 different respondents that were randomly selected in the Erbil province, by the use of a questionnaire survey. The questions were self-constructed and the questionnaire is divided into two parts; demographics and social characteristics and social factors. Descriptive statistics and frequency tables were used to analyze data.

 

3. Results and Discussion

Table 1 presents the socio-demographic characteristics and social characteristics of respondents in the study area. The results demonstrate that all the respondents had a Facebook account in Erbil- Northern Region of Iraq. According to the field survey, 60.0% of respondents were male; 40% of respondents are female. Five age groups were distinguished based on the literature reviewed. Young aged people between the age group of 21-25, 26- 30 and 30 – 35 were more dominant on Facebook by representing 14.7%, 25.9% and 18.8%, respectively. The age of 16 – 20 just had 8.8% and 31.8% of respondents were in the age group of 35+. On the other hands, 144 respondents (84.7%) were spend time on Facebook between 1-5 hours in a day. Time spend on Facebook between 6-10 hours had 10.0% and only 5.3% of respondents were spend time on Facebook between 11-15 hours. This result concludes that most of the respondents are young people who are still strong and full of energy to use social media especially Facebook and gain services and product through this company.

 

Table 1. Socio-demographic characteristics of respondents and using Facebook

Variables

Frequency

Percentage (%)

Gender of respondents

Male

102

60.0

Female

68

40.0

Total

170

100.0

Age group of respondents

16-20

15

8.8

21-25

25

14.7

26-30

44

25.9

31-35

32

18.8

+35

54

31.8

Total

170

100.0

Availability of Facebook account

Yes

170

100.0

No

0

0.0

Total

170

100.0

Spend time on Facebook

1-5

144

84.7

6-10

17

10.0

11-15

9

5.3

Total

170

100.0

 

Table 2 illustrates overall impact of social network. According to survey results, 71.8% of respondents logged into their Facebook everyday whereas 21 respondents (12.4%) and 24 respondents (14.1%) logged in every other day and once a week respectively in their Facebook accounts. The respondents who never logged into their Facebook account were negligible (1.8%). In addition 41.2% of respondents said that they rarely bookmarked, tagged or joined a company page on Facebook. Followed were 48 respondents (28.2%) who often bookmarked, tagged and joined a company page on Facebook. A very small percentage of people 14.1% always book-marked tagged and joined a company page and 16.5% never bookmarked, tagged and joined a company page on Facebook.

 

Table 2. Overall impact of social networking

Variables

 

Frequency

Percentage (%)

Login to Facebook

Everyday

122

71.8

Every other day

21

12.4

Once a week

24

14.1

Never

3

1.8

Total

170

100.0

Book-marked tagged and joined a company page

Always

24

14.1

Often

48

28.2

Rarely

70

41.2

Never

28

16.5

Total

170

100.0

 

 

The second phase of the survey intended to find the factors that motivate users to join a company page on Facebook and what describes the group behavior of the member. During the survey, questions were posed related to both social and economic factors. The sequence of the questions followed the logical and actual flow of customers’ loyalty towards a particular brand in case of a company page on Facebook. The first step was to check the factors that make the users like a company page on Facebook. The second step was to engage with the particular brand online and prove their loyalty towards that brand. The third step is to check the way these users use the functions of Facebook and if they contribute to the community or not.

 

Table 3 shows experience with the product in real was the most important factor for the 57 respondents (33.5%) to like or join a company page on Facebook. Another important factor, which influenced the decision of joining the company page, was to join people with an emotional or rational attachment as the user (25.9 %). Consistent purchases, common interest with the attachment with the fellow customers were the least decision making factors contributing only 14.7 %, 11.2 % and 14.7% respectively. Further 48 respondents (28.2%) said that the reason for their engagement with a brand on Facebook is their personal promotional offers. Followed were the product experiences, information, after sales services and communication with the fellow customers at 24.7%, 24.7%, 12.9% and 9.4%, respectively.

 

Table 3. Reasons to like or join and engagement company page

Variables

Frequency

Percentage (%)

‘Like’ or ‘Join’ a Company Page

Experience with the Product

57

33.5

Consistent Purchase

25

14.7

Emotional or Rational Attachment

44

25.9

Common Interest

19

11.2

Attachment with Fellow Customers

25

14.7

Total

170

100.0

Engagement 

Promotional Offers

48

28.2

Information

42

24.7

Experience with the Product

42

24.7

After Sales Service

22

12.9

Communication with the Fellow Customers

16

9.4

Total

170

100.0

 

 

Table 4 illustrates that the majority of the respondents use the social functions within Facebook at some point of time. Only 31 respondents (18.2%) said that they are passive and never contemplate to take part in the life of the group. Also a large group of respondents 55.3 % (94 respondents) used the social function rarely however nearly 26.3% respondents (12 + 33) said that they always or often contribute to the group activities on the company page. Moreover liking was the most popular social function among the respondents and contributed to 42.4% of the social activities on Facebook. Followed was ‘sharing’ and ‘suggesting’ the company page to the friends at 15.3% and 15.3% respectively. However commenting, posting on the profile, and subscribing to a company page were less popular social activities amongst the respondents and only contributed to 27% in total.

 

Table 4. Group activity and Social Functions

Variables

 

Frequency

Percentage (%)

Group

activity

Always

12

7.1

Often

33

19.4

Rarely

94

55.3

Never

31

18.2

Total

170

100.0

Social Functions

By sharing

26

15.3

By liking

72

42.4

By suggesting

26

15.3

By commenting

27

15.9

By posting on your profile

16

9.3

By subscribing to the company page

3

1.8

Total

170

100.0

 

 

Table 5 showed that almost all the respondents agreed to the fact that they share their positive experience about a brand at some point or the other; except the 68 respondents (40%) who said that they never share their positive experience within their online network. Also 4 respondents (2.4%) said that they always share their positive experience within their network, 31 respondents (18.2%) said that they often share their positive experience and 67 respondents (39.4%) said that they rarely share their responses. As well as except for the 82 respondents (48.2 %) who said that they never share their negative experience within their online network. 3 respondents (1.8%) said that they always share their negative experience within their network, 29 respondents (17.1%) said that they often share their negative experience and 59 respondents (34.7%) said that they rarely share their negative experience. On other hands almost all the respondents agreed to the fact that they recommend a particular brand at some point or the other; 66 respondents (38.8%) said they never recommend a particular brand within their online network. However 29 respondents (17.1%) said that they often recommend a particular brand to their Facebook network and 6 respondents said that they always recommend. Majority of respondents 69 respondents (40.6%) said that they rarely recommend a particular brand within their Facebook network

 

Table 5. Positive & negative word-of- mouth and recommend brand on Facebook

Variables

 

Frequency

Percentage (%)

Positive word-of-

mouth

Always

4

 2.4

Often

31

18.2

Rarely

67

39.4

Never

68

40.0

Total

170

100.0

negative word-of-

mouth

Always

3

1.8

Often

26

15.3

Rarely

59

34.7

Never

82

48.2

Total

170

100.0

Recommended brand

on Facebook

Always

6

3.5

Often

29

17.1

Rarely

69

40.6

Never

66

38.8

Total

170

100.0

 

.

Conclusion

Web-based social networking has empowered individuals to communicate with many individuals at once. Also, individuals have invited long range informal communication destinations as it enables them to cooperate and stay in contact with each other regardless of their geographic area and how busy they are in their lives. With the expanding utilization of online networking by individuals, organizations have additionally begun concentrating via web-based networking media to market and promote their products and services.

Facebook is one of the broadly utilized long ranges informal communication sites the world over. The quantity of users of social media is expanding with the passage of time however youths are more disposed towards utilizing of social media than individuals of different ages. In addition a large portion of the general population are logging their accounts once a day and therefore, it has urged organizations to utilize social networking to pass on their advertising messages too. Social networking sites are utilized for various purposes, one of them is that individuals do research and assemble data about the products and services.

Vollmer and Precourt (2008) have said that people research for product information on social networking websites and furthermore look for reviews of the products and buying decision is influenced by the information gathered from these websites. Moreover, Foux (2006) has said that people look to accumulate surveys and experiences from social networking websites before purchasing products and services and thus their purchasing choices are impacted by these reviews. This reflects that word of mouth is one of the most important tools to promote the products. Sernovitz (2008) has also claimed word of mouth is the best marketing tool and effective use of this tool can increase the profitability of the company but in our case in the Table 5 we can see that a huge number of respondents never or rarely share their positive or negative experience about a product in the social media. Furthermore, Bacher et al. (2009) has demonstrated that purchasing decision of 92% of the consumers are influenced by reading and knowing the experiences of others on social networking websites. With the passage of time, organizations have also started concentrating a lot on social networking websites. Most companies are keeping up Facebook fan pages that are joined by different people. Thus, through these pages organizations can easily share information with their fans or people who have joined these pages.

In the present day correspondence worldview as characterized by Bond (2010), clients can straightforwardly collaborate with the organization and organizations can directly specifically with the customers and social media has played an important role in this regard. There are distinctive variables that impact the level of customer loyal. Gommans et al. (2001) have defined a model in which they have explained the most important drivers that influence the loyalty of the customers. Value propositions, brand building, trust, website and technology and customer services are these five drivers that influence the customer loyalty with online businesses. As traditional businesses have also started their online operations, consequently it has been said that these organizations also need to follow these drivers in order to increase the customer loyalty. Customer services are one of the drivers as clarified by this model, social networking enables businesses to directly cooperate with the customers and accordingly it helps in increasing the customer loyalty. Additionally, organizations keep their potential customers informed about the product and its features and advantages, thus it makes it simpler for customers to know about the products and services and it also reduces the stress that people face in finding the product information and thus helps in increasing customer loyalty. It has been claimed by Silverman (2011) that the level of customer loyalty can be additionally expanded by communicating with the customers and by enabling fans to communicate with the organization's delegates directly on the fan page. In this way, as the representatives of the organization communicate with the potential as well as existing customers, there are higher chances that the queries of the customers are solved and it results in higher customer loyalty. In our case according to the results in tables (4) and (5), it’s obvious that the level of customer loyalty or the culture of customer loyalty is low in region due to many factors like, lake of companies’ main campus or their branches also their proper and special advertising in this area, lake of customer awareness, inaccessibility of the product for the customers easily and lake of means of buying and guarantee.

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