Abstract

     In the emerging retail market, e-tailers operating in developing economies have to cope with the rapid use of the Internet, new electronic purchasing methods and online selling platforms. However, e-tailers do not understand the effect patterns in which customer engagement on purchase intention and customer acquisition. From e-tailers’ perspective, this study explores how customer engagement behaviors are related to both purchase intention and customer acquisition. We obtained live streaming data in the mature e-tail live streaming market environment and found empirical evidence supporting the conceptual framework through regression model analysis. The analysis results show that the specific indicators of the customer engagement are not all positively related to customer purchase intention and customer acquisition, and it is worth noting that the influence of “like” behavior on customer acquisition is no statistical significance. This is expected to encourage e-tailers to rethink their focus on customer acquisition and sales enhancement digital strategies as they operate in emerging markets.

Introduction

     Live streaming e-commerce has become the fastest growing new form of e-commerce in the world in the last three years. According to data from T-mall in China, within 48h of the 618 shopping festival in 2021, the live streaming e-commerce transaction volume of brand stores increased by more than 100% compared to the same period last year, and the number of live broadcast rooms of stores with a transaction of more than 10 million yuan was more than twice that of the same period last year. “Improve business efficiency through Taobao Live” has been recognized by many brands. And many international brands have used Taobao Live to reach Chinese consumers. Live streaming e-commerce has also been widely concerned with consumers in its novel form of commodity display, affordable and convenient. According to the 47th Statistical Report on Internet Development in China (CINIC, 2021), as of December 2020, the scale of online streaming users in China has reached 388 million, and 66.2% of online consumers have bought live streaming merchandise. Live streaming provides customers with added value and additional channels for customer engagement, making it a popular shopping method among consumers. Whether from the perspective of consumers or e-tailers, live streaming will become the mainstream e-commerce mode, as consumers will not change once their shopping patterns are formed.

Conclusion

     At a broader level, this paper was motivated by the observation that e-tailers do not understand the effect patterns in which live streaming service on their benefit, i.e., purchase intention and customer acquisition. The notion of engaging is reflected by customer co-creative and interactive experiences (Vargo and Lusch, 2008), so we focus on the customer engagement in the context of live streaming.

     Based on the prior research and data availability, we firstly determined the customer engagement behavior indicators (customer visits, likes and comments) in the context of live streaming. Then, we revealed the relationship between these engagement behavior indicators and purchase intention and customer acquisition, respectively, through empirical analysis. Consistent with most studies, customer engagement has a positive effect on purchase intentions, but the degree of impact varies across engagement behaviors, and, for customer acquisition, some engagement behaviors even have a negative impact. Overall, the finding of this paper highlights the important point that different engagement behaviors may have different effects. The retail business may benefit more from studies segmenting these engagement behaviors. Of course, the lack of access to specific data measuring increased sales and increased customers is a major limitation of our study, and in the future, we hope to work with brands to obtain specific data to further validate the findings of this study. While the limitations of our study go beyond this, our findings provide some inspiration for future researchers in the areas of live streaming e-commerce, customer engagement, and relationship marketing.

1- Introduction

2- Literature review

3- Methodology

4- Findings

5- Discussion

6- Theoretical implications

7- Managerial implications

8- Limitations and future research

References

Abstract

Customers engaging with brands on social media is critical to social media managers; however, there is still a lack of in-depth studies on the drivers of consumers’ engagement with luxury brands. Drawing on 25 semi-structured interviews with customers following luxury brands in social media, this study explores what motivates customers to engage with luxury brands on social media. This research develops a theoretical framework for the motivations of customers’ cognitive, emotional and behavioral engagement with luxury brands. The study identifies 13 motivations grouped into six macro-dimensions: perceived content relevancy (brand news, post quality, and celebrity endorsement), brand-customer relationship (brand love, and brand ethereality), hedonic (entertainment), aesthetic (design appeal), socio-psychological (actual self-congruency, status signaling, and enhance and maintain face), brand equity (perceived brand quality), and technology factors (ease of use and convenience). This study helps marketing managers of luxury brands to understand how they can improve engagement with their customers.

Introduction

Through Social Media (SM), consumers are able to connect and interact with their favorite brands and share messages with friends, peers, and acquaintances. SM is thus transforming consumers from passive recipients of marketing communications to influencers and active creators by shifting some marketing power over brands to consumers (Berthon, Pitt, Plangger, & Shapiro, 2012). The proliferation and widespread use of SM platforms creates a whole new opportunity for firms, the content they generate on SM enhances customers’ spending, cross-buying, profitability and relationships (Kumar, Bezawada, Rishika, Janakiraman, & Kannan, 2016). After initial fears that SM could negatively affect their prestigious nature, luxury brands are increasingly using and investing in SM (Phan, Thomas, & Heine, 2011). Luxury brands use SM platforms to enhance brand attitude and loyalty (Kim & Lee, 2019). Estée Lauder attributed recent sales growth to a “creative approach to digital engagement, particularly across social media” (Deloitte, 2017). Luxury brands like Burberry, Tiffany, and Louis Vuitton have turned to SM and regularly share pictures and videos of fashion shows or photo shoots. According to McKinsey & Company (2018), the total global luxury market is worth €254 billion, 80% of which is influenced by digital technology, with online’s share of luxury sales expected to reach 20% by 2025. A report reveals that consumer engagement in digital environments will drive growth of luxury brands and retailers (BCG & Altagamma, 2019). Nowadays, luxury brands are sought, experienced, and purchased in very different ways than they were in the past; consumers, especially Millennials, expect efficient e-commerce websites, engaging and exciting interactions on SM, and multiple channels through which to interact with brands (Abtan, Barton, Bonelli, Gurzki, Mei-Pochtler, Pianon, & Tsusaka, 2016). Scholars have identified several benefits that SM can provide to marketers including: stimulating purchase intention, electronic wordof-mouth and loyalty (Lipsman, Mudd, Rich, & Bruich, 2012), positively affecting customer-product, customer-brand, customer-company and customer-other customers relationships (Laroche, Habibi, & Richard, 2013), and leading to improved brand performance, retailer performance, and consumer–retailer loyalty (Rapp, Beitelspacher, Grewal, & Hughes, 2013). SM can also enable firms to better understand their customers, improving relationships and loyalty (Barreda, Bilgihan, Nusair, & Okumus, 2015), as well as acting as a means for responding to customers’ complaints (Tsimonis & Dimitriadis, 2014). Moreover, using SM can enhance the credibility of marketing at a time when consumers are increasingly skeptical about traditional advertising; for instance the message of an engaged consumer is believed to be twenty-two times more persuasive than a marketer’s message (Goh, Heng, & Lin, 2013).

Scholars and practitioners have long acknowledged the importance of offering superior service quality in creating long-term bonds between customers and their brands. However, the importance of service quality as a tool to enhance customer engagement remains under-explored, as addressed in this study. Survey data collected from 395 luxury hotel guests were analyzed using structural equation modeling. The results reveal a positive effect of service quality on customer engagement, which consequently exerts a favorable impact on brand experience and repatronage intent. Our moderation analysis results reveal a stronger effect of the proposed relationships for women than men, thereby suggesting gender’s moderating role in the association between service quality, brand experience, and customer engagement. The paper concludes by outlining key theoretical and practical implications that arise from this research.

Introduction

In the last few decades, a shift has occurred from transactional-to relationship marketing, with the latter stressing the importance of longterm, value-laden customer interactions and relationships (Boulding et al., 2005; Rosenbaum et al., 2017; Thakur, 2018). In line with this shifting perspective, new concepts have emerged, including customer engagement (Vivek et al., 2014 Islam and Rahman, 2016a). With its core centering on customers’ cognitive, emotional, and behavioral investments in interactions (Hollebeek et al., 2019; Kumar et al., 2019), CE offers insight into the dynamics characterizing consumer/brand interactions that existing relational concepts, such as involvement or commitment, have failed to fully capture (Brodie et al., 2011). Consequently, CE has gained significant traction in the last decade, particularly in the service subsector given its centrality of customer/firm interactions that is also common to CE (Kumar and Pansari, 2016; Prentice and Loureiro, 2018). Correspondingly, leading firms such as Procter & Gamble, Starbucks, BMW, Louis Vuitton, Dell, and many others have incorporated CE in their strategic agenda (Manchanda et al., 2015; Islam et al., 2017). Given its interactive nature, CE is conducive to developing customer-based outcomes, including brand trust, attachment, and loyalty, thereby helping to differentiate firms and enhance sales, competitive advantage, and profitability (Brodie et al., 2013; Islam et al., 2018), thereby offering significant benefit for (service) managers Islam and Rahman, 2019. Based on these benefits, several studies have investigated CE in the hospitality sector that is characterized by high customer/firm interactivity (Ahn and Back, 2018; Rather et al., 2019; Rather and Hollebeek, 2019). In line with these developments, we explore the effect of service quality (SQ) on CE, which remains nebulous to date. Thus, while SQ was popularized through SERVQUAL from the 1980s (e.g. Parasuraman et al., 1988), its connection to CE remains tenuous. Enhanced understanding in this area would however be valuable in highlighting those service facets that are of particular value in engaging customers.

The study draws upon an existing conceptual model of customer engagement and examines how customer and firm based factors are related to customer engagement with a focus on the airline industry. Customer-based factors included in this study are brand experience and brand love; whereas firm-based factors are inflight service quality. The data were collected in one of European airports. The results show that customer-based factors are significantly related to customer engagement. In particular brand experience exerts significant direct and indirect effects on customer engagement. Whilst it does enhance passengers’ brand experience, particularly the service by flight attendants, inflight service quality has a minimal effect on customer engagement. The implications of the findings are offered for researchers and practitioners to conclude the paper.

Over the last decade customer engagement research has been popularising the marketing literature. The relative nascence has prompted researchers to delve into its conceptualisation and operationalisation of this concept (e.g. Brodie et al., 2011; Van Doorn et al., 2010; Verhoef et al., 2010). However, its popularity is mostly attributed to the supposedly outcomes for business organizations such as buyer-seller relationships (Sashi, 2012), customer purchase and loyalty behaviours (e.g. Prentice et al., 2018; Vivek et al., 2012). In addition to organizational outcomes, customer engagement likely produces positive customer-related and other social consequences (Van Doorn et al., 2010). These outcomes form impetus to investigate the drivers or antecedents of customer engagement. Van Doorn et al. (2010) proposed three broad categories of antecedents: customer, firm, and context-based factors. Exiting empirical research in this area is rather limited. Recently Prentice and colleagues (Prentice and Loureiro, 2017; Prentice et al., 2018) approached from customers’ perspective and examined how customers’ psychological desire, perceived benefits and social values influence their engagement with the brand and the organization. Prentice et al. (2018) contend that customer-based antecedents are more reflective of their genuine and volitional engagement, which leads to positive organizational outcomes (e.g. purchase and loyalty). On the other hand, to enhance and warrant customer engagement with a brand, it is also imperative for the brand organization to make deliberate marketing efforts such as providing quality services. Research to date has not provided empirical evidence on how customer and firm-based factors affect customer engagement respectively and conjunctively. Understanding this relationship would facilitate firms identifying more appropriate means to engage customers for optimal business outcomes for the brand organization. This study sheds light on this and approaches from both customers’ and firms’ perspective to understand their respective influence on customer engagement with a brand.

The rising impact of customer engagement is increasingly evident in business markets. This paper studies customer referencing as an important manifestation of engagement behavior in the business-to-business (B2B) context. To extend extant research, which has thus far examined referencing almost exclusively from the seller’s viewpoint, we study how referencing affects value creation in business networks. We explore resources contributed and gained though referencing and the resulting value outcomes for the entire reference triad (the seller, the reference customer, and the prospective buyer). Empirically, the paper draws on an extensive field study conducted in knowledge-intensive business service industries. The results explicate how customer referencing affects value creation within and beyond the triad, by i) enhancing or impairing actors’ internal processes; ii) strengthening or damaging relationships between the triad actors; and iii) facilitating exchange in their broader business network. The paper contributes to research on customer referencing by explicating its role in value creation on a network level. As one of the first studies on engagement in the B2B context, this paper contributes to the emerging actor engagement research by analyzing how influencing behavior operates in a business network. These insights can help firms to facilitate exchange in complex markets.

Introduction

The dominance of firm-controlled marketing has lessened in recent decades owing to the rising impact of customer-originated influence and advocacy, recently conceptualized as manifestations of customer engagement behavior, which refers to customers’ voluntary resource contributions to a firm’s marketing function beyond those core to the transaction (e.g., Harmeling, Moffett, Arnold, & Carlson, 2016; Jaakkola & Alexander, 2014; van Doorn et al., 2010). The influence of other customers is increasingly acknowledged as a key factor affecting purchase decisions in business-to-business (B2B) markets as well (e.g., Aarikka-Stenroos & Makkonen, 2014; Anderson & Wynstra, 2010). Today’s business markets are characterized by knowledge and service intensity, technological complexity, and increasing specialization (e.g., Jacob & Ulaga, 2008), which challenges both buyers’ and sellers’ attempts to present and assess the value potential of offerings (AarikkaStenroos & Jaakkola, 2012; Aarikka-Stenroos & Makkonen, 2014). Recent industry reports (Cespedes & Bova, 2015), as well as research on industrial marketing (Salminen & Möller, 2006; Terho & Jalkala, 2017), indicate that the use of customer references has become increasingly relevant for demonstrating the value of complex offerings, thereby facilitating business exchange. Customer referencing refers to a set of practices that enables sellers to provide evidence to prospective buyers to evaluate their performance potential on the basis of previous customer relationships (Salminen & Möller, 2006; Helm & Salminen, 2010; Aarikka-Stenroos, 2011).

1- Introduction

2- Theory and hypothesis

3- Method and analysis

4- Results

5- Discussion

References

Abstract

This study aims at understanding the role of customer engagement in writing online reviews by shoppers with specific focus on mobile devices for shopping. Mobile devices are becoming first screen for the customers and are being used by marketers to have interactive communication making it more suitable for building customer engagement. The research in this space however is in a very nascent stage. Current study is one of the first few empirical studies exploring the role of customer engagement in writing online reviews. The study explores mediating role of customer engagement in satisfaction – online review intention and trust – online review intention relationships. Further moderating role of trust and satisfaction levels in customer engagement – online review intention is explored. This study contributes to marketing literature in the space of customer engagement, online reviews and mobile shopping behaviour. Further, this study provides a framework to managers for motivating the customers in writing online reviews. Also recommendations for retailers in exploiting customer engagement on mobile platforms are provided to address merchants and advertisers for better management of a new technology.

Introduction

Online reviews are becoming increasingly important sources of information for shoppers impacting as much as 20–50% online purchase decisions (Mathwick and Mosteller, 2016). Potential shoppers often check online reviews posted by other customers who bought and used those products. Such reviews give them a glimpse of purchase and usage experience of other users. These reviews are considered to be more credible by shoppers as compared to seller promoted advertisements (Bickart and Schindler, 2001; Godes and Mayzlin, 2004). Researchers have found that shoppers specifically log on to online websites like Amozon.com to check reviews as part of their product evaluation journey (Bughin et al., 2010; Simonson and Rosen 2014). Online reviewers serve the role of information service provider for the potential shoppers by ‘‘shaping how customers serve themselves before, during, and after purchase’’ (Ostrom et al., 2015). Such reviews play crucial role in influencing shoppers’ choice of products, services (e.g, camera, airline, hotel) as well as retailer (e.g., Amazon.com, Makemytrip.com). Online reviews, therefore impact the business of several firms in a multi-sided platform like online marketplaces. Researchers recognize that by posting online reviews, customers derive great social value within the community (Balasubramanian and Mahajan, 2001). The act of reviewing is, therefore, being considered as one of the most influential expressions of customer engagement (Mathwick and Mosteller, 2016). Customer Engagement is a psychological state of mind that leads to frequent interaction with the focal object (e.g., a brand or a medium). Customer engagement is a long term relationship that arrives out of emotional as well as utilitarian motivational drivers. Emerging literature in the domain indicates that customer engagement may lead to several favourable outcomes for brands and firms beyond repurchase intentions. Among other things, these outcomes may include posting likes and reviews on online and social media. Customer engagement is a significant construct in online and social business environments (Brodie et al., 2013; Hollebeek et al., 2014) and may offer valuable insights in customers’ propensity to post online reviews. The act may be perceived by customers as making them influential in their relationships with the brands, and the online organisations.

Purpose – This paper aims to debate the technology-driven transformation of customer relationship management (CRM) into social CRM, which entails a shift from a transactional and automational solution to a customer experience management philosophy, reflecting high levels of customer empowerment. Design/methodology/approach – A literature review provides a critical analysis of the concept, tenets, aims and implementation approaches of social CRM. Arguments are summarised by developing a processbased framework for implementing social CRM. Findings – By adopting a value co-creation approach that recognises the technology-fostered customer empowerment, the social CRM highlights the need to immigrate from relationship management to relationship stewardship. In this vein, social CRM implementation should support and foster dialogue facilitation and customer engagement in co-creating customer experiences. To achieve these, five approaches for implementing social CRM are proposed: collecting, analysing and interpreting customer insight; monitoring and improving the performance of CRM; developing holistic and seamless personalised customer experiences; gamifying CRM and loyalty programmes; and nurturing community relationship management. Research limitations/implications – The five approaches to social CRM implementation are identified and validated based on current industry practices, theoretical arguments and anecdotal evidence of professionals’ perceptions about their outcomes. Future research is required to collect hard evidence showing the business and customer impacts of these approaches. Practical implications – Social CRM immigrates relationship management from a transactional to a customer experience mindset that treats customers as co-creators of value and demands the tourism and hospitality firms to exploit the affordances of information and communication technologies to collect and analyse customer data for better understanding the customer; develop customer touch points that do not only aim to sell but also primarily aim to enhance the customer interactions and experiences; consider and treat the customers and the customer communities as co-creators, brand ambassadors and stewards of relations; and motivate and enable customer participation into value co-creation processes for developing customer experiences and building relationships. Originality/value – Research in social CRM is emerging, but it mainly focusses on defining its scope and identifying the functionality and adoption of social CRM technology. The paper contributes to the literature by proposing five specific approaches and a process framework for implementing social CRM. Various directions for future research are also provided.

Introduction

Customer relationship management (CRM) has become a strategic imperative in tourism and hospitality, as it can address competition, create differentiation and provide enhanced customer value (Sigala, 2005; Sheth, 2017; Debnath et al., 2016). CRM is traditionally seen as a set of philosophies, strategies, systems and technologies that help firms to manage their customers’ transactions and relationships (Greenberg, 2010). Other CRM definitions (Bradshaw and Brash, 2001; Rababah et al., 2010) advocate the importance of CRM in assisting firms to enhance the efficient and effective use of their marketing budgets by allocating marketing expenses to the most profitable customers. Overall, by collecting and integrating customer information for personalising customer transactions, tourism and hospitality firms can exploit CRM for improving their customers’ relationship and satisfaction (Kasim and Minai, 2009; Wongsansukcharoen et al., 2015); identifying and retaining the most profitable customers and improving the profitability of less profitable customers (Wang and Feng, 2012; Wongsansukcharoen et al., 2015; Wu and Lu, 2012); and increasing business performance such as, customer lifetime value, customer satisfaction and retention and business profits (Lin and Su, 2003; Daghfous and Barkhi, 2009; Lo et al., 2010). Hence, a CRM strategy can help firms to maximise the value generated from their customers’ transactions over the customer lifetime duration. By being heavily enabled and supported by technology, CRM should keep up with technological advances and their implications on organisational operations, consumer behaviour and expectations. The CRM scope of technology has progressed from solely providing transactional and automational support to enhancing and transforming the customer experiences. The social media revolution has also empowered the customers to expect and also demand to actively participate, form and even “sell” their own experiences. However, research and practice have failed to provide concrete theoretical underpinnings and practical directions on how technology is transforming CRM.

 Introduction

Customer engagement (CE) is receiving increased attention, as engaged customers are less price sensitive, resist switching, actively participate in new product and service development and advocate for organizations (Hollebeek, Srivastava, & Chen, 2016). Further, new technologies, such as social media platforms and connected technologies, have led to the adoption of customer-centric strategies that build and sustain long-term organization-customer relationships (Verhoef, Reinartz, & Krafft, 2010), increasing the importance of customer interactions that co-create value (Ostrom et al., 2015), which can be termed customer engagement behaviors (CEBs). Given its importance, the Marketing Science Institute (2016) has included customer engagement as a key research priority in recent years. There has also been considerable effort to measure customer engagement and identify its antecedents and consequences (Hollebeek et al., 2016; Pansari & Kumar, 2016). However, there is little understanding of the types of CEBs customers display (Jaakkola & Alexander, 2014). These behavioral expressions are different manifestations of the same underlying construct (i.e. CEB). Our understanding of these behaviors is important and can be improved by identifying and examining their antecedents (Van Doorn et al., 2010), especially as organizations have limited understanding of the resources customers contribute to the value creation process (Hoyer, Chandy, Dorotic, Krafft, & Singh, 2010). Thus, the primary objective of this study was to examine the different types of CEBs suggested by Jaakkola and Alexander (2014) (i.e. augmenting CEB, co-developing CEB, influencing CEB and mobilizing CEB) and to identify their antecedents. Further, while most consumer studies have been undertaken in developed economies (Dekimpe, 2009; Maheswaran & Shavitt, 2000), Burgess and Steenkamp (2013) have recently argued developing markets are likely to provide important additional information. Consequently, this study was undertaken in developed and developing markets to see if this was the case in a CEB context. Traditionally, service fairness and trust have been considered strategic levers that organizations can use to create positive customer responses, such as loyalty and positive word-of-mouth (a form of CEB). While there is a connection between service fairness and trust (Roy, Devlin, & Sekhon, 2015), the psychological mechanisms through which fairness affects trust may be seen more clearly by using a two-dimensional conceptualization of trust (i.e. cognitive and affective trust) (Yang, Mossholder, & Peng, 2009). However, more research is needed into the relationship between fairness and this two-dimensional view of trust (Dirks & Ferrin, 2002). In particular, firms need to understand the role service fairness and trust play in influencing in customers’ extra role behaviors, as these roles have evolved in recent years and are not now limited to repurchase behavior or positive word-of-mouth. Today’s customers can also actively participate in co-production, co-creation and service delivery (Grönroos & Voima, 2013), which means it is important to expand our understanding of the CEBs related to these expanded roles. Further, as noted earlier, given the increasing importance of developing markets, it was seen as desirable to examine the relationship between service fairness and trust and their relationships with customer engagement behavior in developed and developing markets.

Extant research highlights novel opportunities in co-opting customers to co-create value through their participation in the brand experience. However, relatively little is known about how customer participation (CP) affects value creation and brand relationship performance outcomes in social media brand communities in the retailing sector. This study applies Service Dominant Logic and the consumption value theory to examine how retail customers derive value from CP in social media brand communities. Empirical results from 584 consumers confirm the CP influence on functional value, emotional value, relational value and entitativity value, which translate to brand relationship performance outcomes. The theoretical framework provides novel insights to marketing managers in understanding how CP can contribute to a retail brand’s value creation efforts, and how these value creating efforts contribute to brand building for retailers.

Introduction

Customer participation (CP) in brand experiences is gaining increasing attention in both academic and managerial practice as evidence suggests that customers and firms can achieve greater levels of value through CP (Payne et al., 2008; Payne et al., 2009; Merz et al., 2018). Findings from prior CP literature illustrate that enabling higher levels of CP benefits customers through improved quality, customised brand experiences, which allows customers to have more control over their brand experiences and stronger relational bonds (Yim et al., 2012; Chan et al., 2010). This in turn contributes value to the brand by reducing marketing costs, providing easy access to customers, improving the processes involved in acquisition of new customers, and improving customer retention and profitability (Auh et al., 2007; Payne et al., 2008, 2009; Merz et al., 2009, 2018). Digitalised platforms of engagement have since become integral for firms to facilitate CP to enable the co-creation of value with customers (Ramaswamy and Ozcan, 2016). In the retail consumer brand context, retailers globally continue to invest enormous resources in social media platforms to connect with customers through individual and communal processes that co-create value with customers (Carlson et al., 2017a). Studies examining participation in social media platforms confirm that engaged customers participate in idea generation and collaborative behaviours such as sharing knowledge and ideas to support the brand thus shaping their brand experiences (Alexander and Jaakkola, 2016; Carlson et al., 2018; Gong, 2018; Piyathasanan et al., 2017). Critical to the successful management of such CP in social media platforms for retailers is an understanding of how CP in an interactive, socially networked environment contributes to the creation of psychological benefits (i.e. perceived value) for customers, and to what extent this translates to (retail) brand relationship performance. The servicedominant (SD) logic literature considers customers as proactive cocreators rather than passive receivers of value and proactively encourages brands to be joint facilitators of the value co-creation process through the exchange of resources with customers (Payne et al., 2008; Merz et al., 2018). The notion of value co-creation in retail brand experiences is particularly salient among consumers of social media brand communities, as these communities are highly interactive and socially networked (Breidbach et al., 2014; De Vries and Carlson, 2014; Ramaswamy and Ozcan, 2016). For example, customers participate by providing information to the brand, jointly making decisions on product development opportunities and brand experience improvements, as well as generate content with other consumers (Gensler et al., 2013).

The exchange perspective (Bagozzi 1975) examines how customers and employees affect organizational performance. In exchange for goods and services that satisfy their needs, customers provide a firm with monetary and nonmonetary value. Monetary value accrues to the firm in the form of the price customers pay for the goods or services. Nonmonetary value accrues in the form of referrals and recommendations to others, positive reviews, and other behaviors that strengthen the firm’s ability to increase revenues from other customers (Van Doorn et al. 2010). Employees, in exchange for wages and benefits, provide value to the firm by creating products and performing services that satisfy customer needs (Payne and Webber 2006). In other words, firms are able to satisfy their customers’ needs based on the activities of their employees. A large number of studies separately measure the association of customer engagement and employee engagement with organizational performance. Regarding customer engagement, research shows several customer-related constructs that are positively associated with increased firm performance, including customer satisfaction (Anderson et al. 1994, 2000; Morgan and Rego 2006), customer commitment (Keiningham et al. 2015), customer-based brand equity (Rego et al. 2009), and  customer word of mouth (Chevalier and Mayzlin 2006). Similarly, employee-based constructs associated with firm performance include employee satisfaction (Harter et al. 2002), employee engagement (Saks 2006), and employee commitment (Arthur 1994). Surprisingly, however, very few studies show a direct impact of employee-based constructs on a firm’s financial performance. Some studies show that a firm’s financial performance affects job satisfaction among employees (e.g., Bagozzi 1980), and still others show that employee-related constructs are associated with firm performance through customer-related constructs (e.g., Evanschitzky et  al. 2012b; Homburg et al. 2009b). The latter set of studies suggests that employee engagement may be associated with firm performance only in the presence of customer engagement.

Brands globally are making substantial investments in social media brand communities to better engage with their customers to identify and facilitate co-created innovation opportunities (Kao et al., 2016; Hamilton et al., 2016; Uncles and Ngo, 2017). Studies across service environments indicate that an engaged customer actively participates in idea generation and collaborative behaviours such as sharing knowledge, ideas and preference information to support the brand (Alexander and Jaakkola, 2016; Gruner et al., 2014). Central to the successful management of such interactions is an understanding of what stimulates customer engagement behaviours (hereafter CEB) in a social media environment, which contributes to the innovation efforts of brands, and ultimately, enhanced value propositions to target audiences. Advancements in online services have enabled interactive “engagement platforms” to be constructed where consumers can exchange resources as well as co-create value (Ramaswamy, 2009; Breidbach et al., 2014). In this context, scholars have argued that the concept of CEB has brought about a new behavioural perspective. This perspective examines customers’ behavioural manifestations that have a brand focus, beyond purchase, resulting from motivational drivers that add value to the firm (Van Doorn et al., 2010; Groeger et al., 2016). Therefore, managers need to increasingly introduce practices to stimulate and encourage customers to participate in voluntary, discretionary, helpful behaviours toward the brand and other customers (Verleye et al., 2014). Such focus enables brands to unlock customer sharing behaviours such as increasing a customer’s propensity to provide feedback/innovative ideas, and collaborating and interacting with others in brand communities (Alexander and Jaakkola, 2016; Hollebeek et al., 2016). The increasing sophistication of online social networking services such as brand pages have enabled brands to transform passive observers to active participants and collaborators that generate new ideas (Jahn and Kunz, 2012; Hollebeek et al., 2016). Consumers are becoming pivotal authors of brand stories by sharing brand experiences via social media, linking consumers and brands (de Vries and Carlson, 2014). Although the notion of virtual communities is not new (Dholakia et al., 2004; Nambisan and Baron, 2009), the availability of powerful social networking tools makes it relatively easy to initiate conversations, gather and capture user-generated input rapidly from a large number of participants (Mount and Martinez, 2014). Understanding these processes are critical for achieving competitive advantage given advancements in social media monitoring and text analysis techniques that “listen” to, and capture, customer-generated content from brand pages for innovation purposes including product development and brand experience improvements (Moe and Schweidel, 2017; Schweidel and Moe, 2014). Despite the promise that social media holds and the value to be extracted by brands from it through text analysis, the expected positive results for engaging customers for innovation are frequently not realized in practice. For instance, Roberts and Piller (2016) suggest that although some companies are using social media to develop new insights that lead to successful innovations, many others simply do not know how to use social media for capturing innovation opportunities. Furthermore, they argue understanding website design characteristics that facilitate dialogue and conversations with customer innovators is important to encourage cooperation and idea sharing among consumers. Therefore, understanding the mechanisms by which social media managers can design such online services to facilitate voluntary innovation-related behaviours by consumers that benefit the brand and other customers, is critical.

Over the years, scholars have sought to test concepts and theories in consumer research and marketing strategies that are produced from the perspective of both developed and emerging markets, in order to discover the differences between them. Some of these efforts have helped deepen our comparative understanding of the two types of markets. More often than not, however, they present a limited perspective, failing to make theoretical advances and offering few implications for companies in other geographical and economic contexts. Such attempts blur our understanding of the true nature of, for example, emerging markets and the significant ways in which their market structures differ from those of developed markets. The authors of marketing and management concepts and theories are influenced by their environments, which are mostly developed markets. Mere replication of these markets, without proper contextual delineation, offers little that relates to the important contributions being made by emerging markets to the world’s economy (Sheth, 2011). The contribution this article makes is in empirically testing the relationship between the customer involvement capabilities of service firms and firm performance in these two different types of markets. This comparative perspective both expands the theoretical boundaries of the discipline of marketing and provides significant practical benefits and managerial implications for service firms and practitioners in both developed and emerging markets. This study argues that, given specific market constraints, the effect of customer involvement capability may not always be positive and that some boundary conditions may therefore better explain how involvement capability improves firm performance. This study investigates the direct effect of customer involvement capability on firm performance and the possible mediating role of innovation in two countries, the United Kingdom and Ghana. According to Maheswaran and Shavitt (2000) and Bagozzi (1994), cross-country research such as this can help to validate theoretical paradigms, enrich current theorization, and may even lead to new theories. The study enriches the theorization of the effect of involvement capability by explaining some boundary conditions which improve firm performance in different markets. The general customer/market orientation literature gives credence to the importance of customers in creating value for both the customer and the firm (see Appiah-Adu & Singh, 1998; Han, Kim, & Srivastava, 1998). There is an increasing role for customers in the production and delivery of service (Jaakkola & Alexander, 2014). Indeed, Carbonell, Rodríguez-Escudero, and Pujari (2009) argue that customer involvement in new service development greatly impact a firm’s fortunes. The customer participation and involvement literature shows that service firms are actively involving their customers in the production and delivery of service to co-create value (Gallan, Jarvis, Brown, & Bitner, 2013; Grönroos, 2008). In the concept of the joint sphere of the cocreation of value posited by Grönroos and Voima (2013), the customer has a double role: “co-producer of resources and processes with the firm; and value creator jointly with the firm” (p. 140). Customers are now being viewed as proactive co-creators, rather than as passive receivers of value (Chan, Yim, & Lam, 2010; Vargo & Lusch, 2004).