Social Media and Customer Equity
‘ The influence of Facebook and Twitter usage on
the drivers of Customer Equity and Customer
Equity itself’
Student: K.K.M. Hurenkamp Student number:10679774
Supervisor: Dhr. drs. Ing.A.C.J. Meulemans Second supervisor: Prof. Dr. J. Tettero
Acknowledgements
I would like to use this opportunity to thank some people. First I would like to thank my thesis supervisor Drs. Ing. A.C. J. Meulemans for guiding me through the process of writing this thesis. The meetings were inspirational, motivational and most of all enthusiastic. I would like to thank the participants of this research as well. Without your participation I would not have succeeded. Further I want to thank my study mates for all the time they joined me in the library and for the many coffees and lunches we enjoyed together. And finally I would like to thank my parents for supporting me during all years I studied.
Thank you,
Abstract
Nowadays people spend more time on online social platforms like Facebook and Twitter and an increasing amount of companies and organizations are using social media as well. This thesis examined if the use of social media by service companies, celebrities and brands/products is an effective marketing strategy. To measure the effectiveness the Customer Equity framework of Rust et al (2001) was used. Customer Equity has three drivers; Retention, Brand and Value Equity.
This thesis will examine the influence of Twitter and Facebook usage by service companies, brands/products and celebrities on Customer Equity and its drivers. 163 participants filled in an online questionnaire and the results showed higher means of Customer, Brand, Value and Retention Equity. Independent t-tests showed significant changes between the Facebook and Twitter group compared to the control group whereby the respondents who use Twitter score each driver highest. Meaning that the respondents who are following companies, brands/products and celebrities on Twitter and Facebook score the drivers of Customer Equity higher compared to those who aren’t following people online.
Key words: Social Influence, Social media, Facebook, Twitter, Customer Equity, celebrities, brands/products, service companies.
Index
1. INTRODUCTION ... 5
2. LITERATURE REVIEW ... 7
2.1 SOCIAL INFLUENCE AND MARKETING TOOLS ... 7
2.2 SOCIAL MEDIA AND ITS INFLUENCE ... 8
2.1.1 Facebook ... 10
2.1.2. Twitter ... 11
2.3 SOCIAL INFLUENCE THROUGH FACEBOOK AND TWITTER ... 12
2.3.1 Knowing and liking ... 12
2.3.2 Social Proof ... 12 2.3.3 Repeated contact ... 13 2.4 CUSTOMER EQUITY ... 13 2.3.1. Value Equity ... 14 2.3.2 Brand Equity ... 15 2.3.3. Retention Equity ... 16
3. THE CONCEPTUAL FRAMEWORK ... 19
3.1 SERVICE COMPANIES-‐ THE ‘SOCIAL’ REVOLUTION OF KLM. ... 20
3.2. BRANDS/PRODUCTS BEING ‘SOCIAL’ ... 23
3.3 GETTING TO ‘KNOW’ YOUR HEROES ... 25
4.4 A SHORT RECAP ... 27
4 RESEARCH CONCEPT AND METHOD ... 29
4.1 RESEARCH DESIGN ... 29
4.2 RESEARCH CONCEPT AND QUESTIONNAIRE ... 30
4.2.1 Value Equity ... 30
4.2.2 Brand Equity ... 30
4.2.3. Retention Equity ... 31
4.4 RESEARCH QUESTION AND SURVEY DESIGN ... 31
4.5 DATA COLLECTION AND SAMPLE ... 32
4.5 Data analysis ... 32
5. RESULTS ... 34
5.1 DEMOGRAPHIC STATISTICS OF SAMPLE ... 34
5.2 RELIABILITY ANALYSIS ... 36
5.3 CUSTOMER EQUITY ANALYSIS ... 37
5.3.1 Service companies ... 38
5.3.2 Brands/products ... 41
5.3.3 Celebrities ... 44
5.3.4 Customer Equity between branches ... 48
5.4 SOME OTHER STATISTICS ... 48
6. DISCUSSION AND CONCLUSION ... 50
7. LIMITATIONS AND FURTHER RESEARCH ... 52
REFERENCES ... 54
1. Introduction
If one takes a look around when sitting on the train, on the bus or while waiting in line at Starbucks, one sees almost everybody staring at their phones. Not only are people texting or calling, they are also checking online social platforms. Updates about daily activities are posted 24/7. Photographs of a cup of coffee or new shoes are everyday images on Facebook. We ‘like’ the photograph of the cup of coffee that a friend posted and post a reaction containing a picture of our own fresh coffee; It is almost the same as actually drinking the coffee together. Events are not the only things shared on the net; Opinions about almost everything are shared on Facebook, Twitter, and other social platforms. People also tweet about bad service in restaurants or about political discussions.
Our social network no longer consists only of the people surrounding us; it has extended to online platforms. Online, we can see opinions and updates from our ‘friends’ and their friends as well. Our social network has therefore become broader. We see updates of friends from our past and from people we met during a holiday. These online ‘friends’ do not have to actually be good friends of ours, yet we know what their interests are and what they are doing at any given moment. People are (unconsciously) influenced by their environment, but does are they also influenced by online social environment?
The era of social media is flourishing, affecting not only individuals, but business as well. Most brands, products or companies own a Facebook page or a Twitter account. Businesses want to literally ‘connect’ to their customers and consumers. Social media enables information to travel faster than ever before. Also from a business perspective, using social media for advertising is cheaper compared to old-fashioned ways of advertising, like using posters and flyers. Companies use social media accounts to create awareness, and keep people informed about facts and special events. Many people are active users of Facebook and Twitter and check these pages multiple times each day, meaning that posts shared by companies can be read multiple times each day as well. The use of social media offers a lot of possibilities for companies to connect with their customers. Further, companies can learn about their customers by reading their opinions about services or products, which they can then use to improve their services or products. Sometimes a Facebook or Twitter post is so popular that it gets a lot of ‘likes’ or is shared many times. But does the popularity of a post actually contribute to the success of a company?
The goal of this research is to investigate whether it is useful for businesses to use Facebook and Twitter as a marketing strategy. The success of a strategy can be measured in a lot of
ways. For example, one can measure for increase in profits or examine whether more people using a certain product. Morgan (2012) tried to explain the challenge and struggle of academics and managers to understand and delineate the role of marketing in explaining business performance differences between firms. Rust, Lemon and Zeithalm (2004) argue that the focus of organizations has moved from the products/services to the customers. This focus on customers requires a new approach whereby the value of customers is managed; this is referred to as Customer Equity. This approach focuses on the profitability of customers because it is a reliable indicator of future revenues (Rust et al., 2004). There are three drivers behind Customer Equity: Value Equity, Brand Equity and Retention Equity. The framework of Customer Equity (and the drivers behind Customer Equity) is relevant in creating an effective marketing strategy for a company because it focuses on maximizing the assets of customers (Hogan, Lemon and Rust, 2002). When the drivers are analysed, the company can see how the drivers score in relation to each other and where improvement is possible or needed.
This thesis examines the influence of Facebook and Twitter use on Customer Equity, using the Customer Equity framework of Rust, Zeithaml and Lemon (2001). They define Customer Equity as “the total of the discounted lifetime values summed over all of the firm’s current and potential customers” (p.109). Since there are many different kinds of companies who use Facebook and Twitter as part of their strategy, this framework is applied to three different types of companies: service companies, brands/products and celebrities. The following research question will be examined within this thesis:
“How and to what degree can the use of Twitter and Facebook influence Customer Equity?”
The thesis starts with a literature review about social influence, social media and Customer Equity. The second chapter will introduce the conceptual framework. It will also highlight the three different branches that can be used to examine the possible relation between Twitter and Facebook, which are brands/products, companies who offer services and celebrities. Then, the research concept and method will be discussed. The third chapter includes the results. The thesis will finish with a conclusion, discussion and summation of limitations.
2. Literature review
2.1 Social Influence and marketing tools
As stated above, the focus of marketing strategies has become customer-centered instead of product-centered. A lot of marketing tools are based on influencing the public in a way that makes them want to purchase a product or service from an organisation. The successful use of these tools leads to purchases, donations and concessions by those who are influenced (Cialdini, 2009, p.XII), which leads to higher profits for the organisation. Influencing the public is described as ‘social influence’.
There are a lot of theories about how individuals and groups are influenced subconsciously. Many marketing strategies are based on these theories. Ethologists and psychologists argue that fixed-action patterns are triggered by a single feature of relevant information in a specific situation (Cialdini, 2009, p.16). This single feature is often trustworthy and can be very valuable because it allows an individual to decide on a correct course of action without having to analyse all of the information in a situation carefully (Cialdini, 2009, p.16). Gigerenzer and Goldstein state that reacting in an automatic way is an efficient form of behaviour or simply necessary; We need shortcuts to save energy, time and mental capacity (as cited in Cialdini, 2009, p.7). Kahneman, Slovic and Tversky (1982) state that we use a number of mental shortcuts in everyday decision-making and they call these shortcuts ‘judgemental heuristics’ (p.3). The downside of automatic response lies in its vulnerability to making mistakes; only reacting based on a single part of the information can lead to errors (Cialdini, 2009, p.16). Since these mental shortcuts form a foundation of marketing campaigns and strategies, a few examples relevant to this thesis will be explained.
Cialdini (2009, p.142) argues that we prefer to say ‘yes’ to people we know and like. We automatically see them as more trustworthy compared to strangers. Nonetheless, this simple rule is being used by strangers in hundreds of ways to get us to comply with their requests (Cialdini, 2009, p.142). Favourable people and familiar everyday situations are used in advertising to increase likeability and familiarity. The social bond seems to be twice as likely to determine product purchase than a preference for the product itself (Frenzen & Davis, 1990).
As explained above, there are many theories about social influence and many of them form the foundation of marketing strategies. Social proof is another example. When people see
other (similar) people wanting a specific product, they think this product must be good (Cialdini, 2009, p.146). Social proof principle states that people determine what is correct by finding out what other people think is correct. Social proof can be linked to behaviour as well. Lun, Sinclair, Whitchurch and Glenn (2007) argue that behaviour in a specific situation is seen as correct if we see other people act in a similar way.
Further, we tend to be more favourably disposed toward the things with which we have had contact (Fang, Singh & Ahluwalia, 2007). Researchers proved this by showing ads of a camera. The more frequently the ad appeared, the more the participants liked the camera, even though they were not aware of seeing the ads for it. Therefore, the number of times we have been exposed to something in the past, influences our attitude toward something or somebody.
Once we take a stand or make a choice, personal and interpersonal pressures are encountered to behave consistently with that commitment (Knox & Inkster, 1968). Fazio, Blascovich and Driscoll (1992) argued that this is because these pressures will cause us to respond in ways that justify earlier decisions. It is a way we convince ourselves that the choice we made was the right one, therefore we feel better about our decision.
These examples are just a few of many theories about social influence that are used in marketing and sales. When we take a serious look at these theories, they can be connected with social media.
2.2 Social Media and its influence
We are all familiar with old-fashioned (offline) ways of advertising. Every day, we see posters on the street, and commercials on television and in newspapers, advertising (new) products or services. Advertisements are everywhere. Now, people spend time on the Internet, and therefore advertisements have expanded to the Internet, as well. The Internet offers marketers a lot of possibilities. Products are offered to possible customers/consumers through pop-ups, advertisements on the screen, links and through a lot of other visual techniques. The traditional web has transformed into more of a social environment, called Web 2.0, which introduced the possibility for people to interact and share/build content online (Lai & Turban 2008). They argue that one of the biggest differences between the traditional web and Web 2.0 is that the content is user-generated and that there is a bigger cooperation between the users. Mueller, Hutter, Fueller and Matzler (2011) state that Web 2.0 has made it easier for
users to connect with each other. Gruzd, Wellman & Takhteyev (2011) say that Web 2.0 applications have facilitated social media (like e-mail, Twitter and Facebook), and have made it possible for individuals to interact with each other without needing physical meetings. It seems like social media has changed the social interactions between people and companies (Ellison, Steinfield and Lampe, 2007).
Now that social media is becoming omnipresent, a lot of new communication paths are available to the users of online (social) media (Katona, Zubcsek, & Savary, 2011). According to these auteurs, network data provides the possibility of discovering how each individual social connection influences a person’s decision-making process, which makes it possible to measure the online (social) influence of a person. Cooke and Buckley (2008) see social media as ‘the future of market research’; Market research is important to companies because it provides information about the needs, feelings or thoughts of customers/consumers.
An increasing number of companies are using online platforms to connect with customers and to invest in advertisement through social media. Consumer involvement through social media seems to be an important factor in marketing (Park, Lee & Han, 2007). Companies use social media as platforms to connect with their customers by providing online customer care, like answering questions and offering online services. The Internet has become a place where people connect with each other and where they expand their (social) network. People can find all sorts of information about products on the web and consumers can share their experiences online. Evans argues that the main idea of social media is that it is participative: the audience is assumed to be part of the creative process or force that generates content. It is a collaborative process by which information is created, shared, altered and destroyed (as cited by Chatuverdi & Chatuverdi, 2011).
Ridings and Gefen (2004) state that online communities provide opportunities to organisations to have better customer relationship management systems, which is why it is not surprising that over the past years more companies/organizations have been investing in social media policies. Social media increase brand popularity (de Vries, Gensler & Leeflang, 2012), facilitate word-of-mouth communication (Chen, Fay & Wang, 2011), and increase sales (Agnihotri, Kothandaraman, Kashyap & Singh, 2012) and even trust (Hawkings &Vel, 2013). Wu, Cheng and Chung (2010) argue that communication through social media reveals shared values amongst individuals and can lead to a positive impact on trust; Ultimately, it is trust that affects the intention to buy (Hajli, 2014).
Social media is hard for companies and brands to ignore; it enables (literal) connections between companies and their customers, and these connections are valuable for marketing
departments. Many marketing strategies are based on connecting with the customers and persuading them to buy products. Evans argues that social media is an effective guidepost and can be used to gather valuable information about how a product, service or brand is perceived in the marketplace (as cited in Chatuverdi & Chatuvedi, 2011, p. 23). The following sections will focus mainly on Facebook and Twitter because these two online platforms seem to be widely used.
2.1.1 Facebook
Facebook is an online platform that is used by people worldwide. It was created in 2004 and has grown enormously ever since. In September 2014, the official site of Facebook pronounced that more than 864 million people use Facebook daily and this amount is growing every day. Facebook users present themselves in an online profile and they connect with other people by becoming ‘friends’. Research suggests that Facebook users engage in searching for people with whom they have an offline connection more than they search for strangers to meet (Ellison, Steinfield & Lampe, 2007). It seems that people see their profile more or less as ‘private’. When people are ‘friends’ (connected), it’s possible to post comments on each other’s pages and view pictures and information on each other’s profiles. They are able to see if people share hobbies or interests or whether a person is in a relationship. They are also able to join virtual groups (public or private), such as groups formed by former classmates and groups based on specific interests. There are also groups aimed at providing support for people in similar situations; For example, there are groups specifically for students where students ask each other questions about exams and share summaries with each other. These groups are quite interactive. Facebook has evolved over time and is no longer used only by ‘ordinary’. Famous people, restaurants, festivals, companies and even brands own Facebook pages/profiles and these pages/profiles enable Facebook users to literally connect with their favourite celebrities, restaurants, etc. without personally knowing the person or company. Facebook users ‘like’ and ‘follow’ these pages to see updates, news facts, photos or other messages about their favourite brands. People see information and updates related only to the people, pages and groups that they choose to follow on Facebook. Facebook is designed so that users see information about the people and companies that they follow. Is it possible that people are influenced by this information? Is this truly of any help in a marketing strategy for a company? These are questions that this thesis will address.
2.1.2. Twitter
Twitter was launched in 2006 and, like Facebook, is an online platform where people can create an online profile, and send and read posts about activities, opinions and news. However, it differs from Facebook and other social media platforms. Members of Twitter follow others or are followed. It is possible to follow any other user without being ‘followed’ back; the relationship does not have to be reciprocal. Kwak, lee, Park and Moon (2010) describe Twitter as a micro-blogging service. Java, Song, Finin and Tseng (2007) describe micro-blogging as a new form of communication with which users can describe their current status in short posts distributed as instant messages through mobile phones, email or the Web. Only 140 characters per post can be used, so members have to be brief in their expression. The messages sent through Twitter are called ‘tweets’. Users receive tweets from those whom the user is following. People can ‘retweet’ a message to spread this information to their own followers. In this way, the information can be easily spread beyond the immediate network of followers of the author of the original tweet (Kwak et al. 2010). We can see Twitter as a platform where short news updates can be shared easily and therefore reach an endless amount of people, fast.
Twitter has become a success because of its ability to efficiently provide information about certain events, like the US Airways plane crash on the Hudson (Kwak. et al. 2010). At the time of the crash, people needed current, relevant information and updates about the situation. Twitter made this possible. Updates could be shared online and people did not have to wait for news broadcasts, papers or online articles. The sharing of information through Twitter is not limited to ‘professionals’, like journalists; anyone who has information can share it on Twitter.
As with Facebook, not only individuals are using Twitter. Companies, brands, the government and other institutions use Twitter, as well. Like Facebook, Twitter can be used for private and for business purposes. Since people only see the tweets of the companies/persons whom they are ‘following’ and Twitter is used for short updates about activities, opinions, activities etc., discussions on Twitter can increase the relevance of a certain subjects. People can agree or disagree with people or companies whom they are following but could this in the end affect their opinion about a specific company or person?
2.3 Social influence through Facebook and Twitter
In the following section, the concepts of social influence, social media, Facebook and Twitter are further explained and linked theoretically.
2.3.1 Knowing and liking
On Facebook, most people who are connected with each other know their ‘friends’ offline as well, whereas on Twitter it is possible to follow someone without being followed back. Both platforms enable enlarging the social network of a user (reflexive or not). Cialdini (2009, p. 144) argues that we prefer to say ‘yes’ to people we know and like because, compared to strangers, we see them as more trustworthy. We can know a lot of people online and like them as well. The principle about knowing and liking is relevant to online marketing strategies, as well. Frenzen and Davis (1990) argue that a social bond is twice as likely to determine product purchase than is the preference for the product itself. If companies create a Facebook or Twitter profiles, they can connect socially with customers and this can possibly increase the social bond and feeling of knowing. The company can become part of the social network of a person and therefore will not be seen as a stranger anymore.
2.3.2 Social Proof
We tend to base what we believe to be true or correct behaviour on how we see others (similar to us) acting (Lun, Sinclair, Whitchurch and Glenn, 2007). When we see people like ourselves wanting a certain product, we think this product must be good and we want the product as well (Cialdini, 2009, p.148). Since Facebook and Twitter are platforms where people can share opinions and photographs, and update their statuses constantly, when users of Facebook and Twitter open these platforms, they are confronted with the behaviour of the people in their network. The principle of social proof suggests a possibility for companies to exploit social media. If the principle of social proof applies to social media, then the behaviour of people can be manipulated online. When our ‘friends’ share photos with products, for example, we may think (unconsciously) that these products must be good because our ‘friends’ use them.
2.3.3 Repeated contact
Fang, Singh and Ahluwalia (2007) argue that we favour things we have had contact with in the past. They proved this theory with an experiment where photo ads were showed repeatedly. According to Cialdini (2009), one’s attitude towards a person or thing is positively influenced by the amount of one’s exposure to the person or thing (p.152). This theory can be applied to Twitter and Facebook. When a post appears repeatedly, it can influence people’s behaviour and beliefs. A company or brand could place an advertisement on Facebook every day and it would theoretically increase people’s attitude towards what is being advertised.
2.4 Customer Equity
While it is theoretically possible for companies to manipulate consumer behaviour through online platforms, it has not been proven that the use of online platforms is necessary for the success of a company. While the amount of ‘likes’ or ‘followers’ of a page are indicators of the page’s success, it is not direct proof of the overall success of the company itself. This thesis will examine the effect of social media using the Customer Equity model of Rust et al (2001, p.9).
As explained in the article by Rust et al. (2004), marketing theory and practice have become increasingly customer-centred over the past 40 years and the focus on short-term transactions has shifted to a more long-term customer-relationship focus. This customer-centred viewpoint is reflected in the concepts and metrics that are the drivers of marketing management. As cited by Rust et al (2004), Bolton and Drew (1991) argue that these metrics include Customer Equity.
The Customer Equity of a company can be defined mostly as the value of the customer relations of a specific company (Blattberg & Deighton, 1996). Rust, Zeithaml and Lemon (2001) extend this definition into the following; they state that “the value of a customer is not only the current profit of a customer but, the value of a customer/consumer are all the net earnings that an organisation can realise over time with a person” (p.4). Therefore, an organisation could benefit by increasing Customer Equity. Further, it would be very beneficial if effective social media use affected the Customer Equity of a company. Therefore, the possible influence of social media (Twitter and Facebook) on Customer Equity will be examined in this thesis.
The shift to customer-centred thinking implies a customer-based strategy instead of a product-based strategy. This is why Rust et al. (2001, p.9) argue that the strategic opportunities of a firm can be best viewed in terms of opportunities for improving the drivers behind Customer Equity. There are three drivers of Customer Equity: Value Equity, Brand Equity and Retention Equity (figure 2.1). Each driver can be analysed by using certain questions in the form of a questionnaire. When a company knows which of these have the most influence on the company or organisation (figure 2.2), it can focus on the most important component to increase Customer Equity (Rust, et al 2001, p.8). Hence, it is important to examine the influence of social media on each of these drivers individually. In the following sections, each driver will be explained.
2.3.1. Value Equity
Value Equity can be broken down into three forces: value perception, perception of quality and comfort (Rust et al., 2001 p. 8). People are influenced by perceptions of quality, price and comfort (figure 2.3). These perceptions can be judged as cognitive, objective or relational (Rust et al., 2001, p. 8). Is it possible that social media influences the customers/consumers perception of these forces? Rust et al. (2001, p. 95) argue that several pricing strategies and sales can help in attracting customers and thereby increase the sales rates. Only perceived quality can influence value equity, therefore actual quality can be ignored when making an overview regarding value equity and customer equity (Rust, et al., 2001, p.98). Comfort is
value equity
brand equity
retention equity
Figure 2.2 Relative importance of the driving forces in a branch
Custom er Equity Value Equity Brand Equity Retention Equity
Figure 2.1 Customer equity and the driving forces
judged on the basis of different factors: location, ease of use and availability (Rust, et al., 2001, p.101).
2.3.2 Brand Equity
Brand Equity is the Customer Equity defined as the subjective appreciation of the brand. There are three drivers behind Brand Equity (figure 2.4). Brands can evoke emotional, subjective or irrational feelings (Rust, et al., 2001 p.105). For example, one can think of a specific brand as typically Dutch. According to Aaker (1991) Brand Equity can be divided into five categories: name awareness, brand loyalty, brand awareness, perceived quality, brand associations, in addition to perceived quality and other proprietary brand assets, like patents, trademarks, channels, relationships etc. (as cited in Bauer, Stokburger-‐Sauer and Exler, 2008). When Brand Equity is thusly defined, Manara and Roquilly (2011) state that social media can provide a great opportunity for learning more about how the brand is defined and how its values grows.
Multiple studies by various authors argue that social media could be easily used for analyzing conversations and exchanges of consumers’ experiences with and opinions about a specific brand (Godes & Mayzlin, 2004; Chevalier & Mayzlin, 2006; Trusov, Bucklin & Pauwels, 2009). In 2010, MyYearbook did a survey that revealed an interesting fact; 81% of all the respondents of the survey claimed to have had recommendations from friends and followers on social media regarding a product and the purchase of the product. 74% of these respondents were convinced that these recommendations had influenced them (Silverstone, 2010; Manara & Roquilly, 2011). Therefore, this could imply Brand Equity is sensitive to the influence of social media. Social media can affect Brand Equity positively or negatively,
Value equity Quality
Price
Comfort
Figure 2.3 driving forces behind value equity
depending on customers’ perceptions and what they share on social media. According to Mencarelli and Puhl, a serious depreciation in Brand Equity could be caused by harmful remarks about a brand (as cited in Manara & Roquilly, 2011). Thus, previous research indicates that social media networks affect Brand Equity.
2.3.3. Retention Equity
The third driver of Customer Equity is Retention Equity, which is formed through five drivers (Rust et al. 2001, p. 128) (figure 2.5). Companies could use a strategy that focuses on people that choose the company repeatedly. Retention programs or strategies can increase the chance of repeated purchases by customers/consumers at a specific company or organisation (Rust, et al., 2001, p.123).
People can build a relationship with an organisation or company that increases customer equity because of loyalty. Retention behaviour indicates to a brand or organization that customers are behaving loyally (Rust et al., 2001 p.123). Knowledge about customer retention offers companies information about the possible return of a customer.
Figure 2.4: driving forces behind Brand Equity
Brand Equity Brand knowledge of a customer Attitude of a customer towards a brand Attitude of a customer regarding ethics of a brand
According to Czepiel and Gilmore (1987) there are two types of loyalty: attitudinal loyalty and behavioural loyalty. They define behavioural loyalty as repeated patronage. Customers/consumers may engage in repeat patronage for reasons of service, convenience, high switching costs and conveniences. This repeated patronage does not necessarily indicate an emotional attachment to the brand or service provider. However, attitudinal loyalty does signify an emotional attachment. Czepiel and Gilmore (1987) define attitudinal loyalty as the desire to maintain a relationship with a particular supplier, product or brand. Hawkings and Vel’s research (2013) looks into the possibility that social media could influence trust and therefore customer loyalty (figure 2.6). They state that social media could be used to generate attitudinal loyalty, but not behavioural loyalty (Hawkings & Vel., 2013).
Figure 2.6: Social media and Drives of loyalty (Hawkins,K., Vel,P, 2013)
Figure 2.6 driving forces behind retention equity
Retention Equity Loyalty programs Special recognition and treatment programs Affinity programs Community building programs Increasing knowledge programs
Besides loyalty programs, there are four other actions that a company/organization can take to increase the chance that a customer will return. These programs are as follows: special recognition and treatment programs, affinity programs, community building programs and programs that increase knowledge. Which of these programs is most effective depends upon the nature of the product or service (Rust, et al., 2001, p.143).
Many marketing tools are based on influencing people subconsciously. The success of strategies used by companies can be measured using the Customer Equity framework of Rust et al. By exploring the drivers of Customer Equity and Customer Equity itself, companies can measure the value of customers. If a company knows that one of the drivers does not score well, investment in this driver would be less valuable than investment in one that scores well. Since many marketing tools (compared to Facebook and Twitter usage) are expensive or time consuming, it is interesting for companies to know how and to what degree the use of Twitter and Facebook could effect changes in Customer Equity.
3. The Conceptual Framework
In this section, the research question and the definitions of Social Media and Customer Equity are explicated and a conceptual framework is introduced (figure 3.1). As explained in chapters one and two, the (possible) relationships of Facebook and Twitter to Customer Equity are central to this thesis.
There are many marketing tools that can be used by companies to advertise. Television commercials, radio commercials and posters are still very popular and widely used. Compared to offline advertisement, the use of the Internet has several advantages. The Internet is associated with quantifiable actions; the amount of hits and click-throughs of a message or banner can be measured (Murphy, 1996). Another technological innovation is the ability to target advertisement messages to users (Bergemann and Bonatti, 2011). Both are innovations that are not possible when using offline advertisement. With the popularity of the Internet and its endless possibilities, social media has become an interesting marketing tool especially because social media is cheaper overall than offline advertising. When a company wants to post a message, it does not necessarily require paying money.
As mentioned above, Customer Equity has three drivers and the possible relationship of Facebook and Twitter to each of these drivers will be examined (figure 3.1).
The top 10 Facebook pages in the Netherlands (based on amount of local fans) are represented by different types of companies: airlines, brands, online shops, fast-food restaurants, network
providers, etc. (http://www.socialbakers.com/resources/reports/regional/netherlands/2014/november/,
retrieved in November 2014) The way social media is used varies enormously from company to company, not only because of the budget of different firms, but also because they simply offer different products. Is social media working better for one company than for another and is the effect of social media greater for a specific sector? To answer these questions, this thesis will research the influence of Twitter and Facebook usage for three kinds of companies/organizations: companies that sell/offer a service, brands/products and celebrities (figure 3.2).
Figure 3.2. Conceptual framework regarding hypothesises
3.1 Service companies- the ‘social’ revolution of KLM.
When it comes to service companies, branding plays a special role. Strong brands increase the trust of customers when it comes to buying intangible products (Berry, 2000). Strong brands allow customers to understand and visualize intangible products and to reduce feelings of risk when buying these services (Berry, 2000). In the top 10 Facebook and Twitter pages/accounts, there are a few companies listed that offer services to the
consumers/customers and not actual products. In fact, according to the site Socialbakers, 4 out of the top 5 most popular Facebook brands are all companies who offer services: KLM, Vodafone, KPN and T-Mobile (retrieved in November 2014). The top 5 fastest growing Twitter accounts of brands are also represented mainly by service companies: Post NL, KLM, Rabobank, ING and Zilvere Kruis (Socialbakers, retrieved in November 2014). What is it that makes these ‘service companies’ so popular on Twitter and Facebook? Compared to other Facebook pages of brands and organizations, KLM seems to post the same kind of information repeatedly, like (fun) facts, pictures and news updates; However, KLM is the fastest growing Facebook in the Netherlands and is considered a true pioneer in the use of social media. What is it that makes their social media pages so successful?
In April 2010, the volcanic ash cloud in Iceland caused a cancellation of flights across Western Europe for six days. This triggered a flood of Facebook posts and tweets of people asking for help. Although KLM worked with social media already, the amount of questions and complaints left an impression on CEO Peter Hartman and affected the way he ran the company (Dayon, 2011). Shortly after the ash cloud, he declared social media the centre of KLM’s customer service. The social media team was now responsible for resolving complaints (Dayon, 2011). He decided that posts on Twitter and Facebook needed to be answered within two hours and now a social media team answers questions and offers services 24/7 in many different languages (Dayon, 2011). The number of people who are following KLM on Facebook and Twitter is still growing, which indicates that their use of social media is successful. It seems that offering customer service through Twitter and Facebook is one of the reasons for their success. The other service companies in the top 5 use social media for customer service as well. Therefore, it seems that these service companies benefit from their Facebook and Twitter usage. However, can this be measured in Customer Equity as well?
The following hypotheses will be tested to answer these questions.
H1(a) The use of Facebook increases the Customer Equity of Service Companies H1(b): The use of Twitter increases the Customer Equity of Service Companies
Since there are multiple drivers behind Customer Equity and the value of each of these drivers depends on the company/product, each of these drivers will be looked into separately (figure 3.3).
The first driver that this paper will address is Value Equity. Comfort, price and quality are the main forces behind Value Equity. What could the use of Twitter and Facebook of a service company possibly affect? The use of customer service by KLM is a clear example of a service that could affect customers’ comfort because of the ease of use of Social Media and the fast reactions of the social media team. It could also be seen as detrimental to comfort because the question could be addressed publically. Also, people who do not use Facebook or Twitter could feel alienated. Therefore, could there be a possible effect of the use of Twitter and Facebook on Value Equity?
H1.1 (a): The use of Facebook increases the Value Equity of service companies H1.1 (b): The use of Twitter increases the Value Equity of service companies
The second driver that will be addressed is Brand Equity. What indicates a link between social media and Brand Equity in service companies? As stated above, Brand Equity is the subjective appreciation of the brand and it can be divided into five categories. Manara and Roquilly (2011) state that social media could provide a great opportunity for learning more about how the brand is defined and how value grows. Therefore, online customer service could be used for analysing the opinions and values of customers and it could affect customers as well.
H1.2 (a): The use of Facebook increases the Brand Equity of service companies H1.2 (b): The use of Twitter increases the Brand Equity of service companies
The third driver that will be addressed is Retention Equity. As stated above, Retention Equity is the repeated purchase of goods or services by customers at a specific company/organisation (Rust et al., 2001, p.143). Therefore, if the use of Twitter and Facebook influences the repeated behaviour, there is a link. Yet, how could this be at a service company? Online services could increase knowledge about a company. Also, when customers share experiences on the web (either positive or negative), companies know what they have to change or what their customers value the most. Therefore, when customers get a response from the company, this could make the relationship between customers and the company stronger, which could increase the retention rate of customers.
H1.3 (b): The use of Twitter increases the Retention Equity of service companies
3.2. Brands/products being ‘social’
The most popular brand pages in the Netherlands (besides the service companies) are pages about clothes, electronics, food and/or beverages; McDonalds, Heineken, Samsung and SneakerDristrict are popular pages, for example. When it comes to packaged goods compared to services, the product is the primary brand and not the company (Berry, 2000). The labels of products can be used for branding and people can actually ‘experience’ the product tangibly. But could brands/products benefit from the use of social media as well (Twitter and Facebook)?
Heineken will be used as an example. Heineken is a famous and popular Dutch beer brand. When you visit their Facebook page, it is full of fun facts and campaigns. People post pictures of themselves with bottles of Heineken, react using posts with their opinions and/or questions and they ‘like’ new posters/updates. The great number of followers indicates that Heineken has a popular Facebook page and Twitter account, yet does this also affect the Customer Equity of Heineken? Since this thesis endeavours to test the hypotheses not only for Heineken but also for similar brands, the following hypotheses will be tested (figure 3.4):
Service companies Facebook Twitter Value Equity Brand Equity Retention Equity Customer Equity (H1.a) Value Equity Brand Equity Retention Equity Customer Equity (H1.b) H 1.2(a) H 1.1(a) H 1.3(a) H 1.2 (b) H 1.1 (b) H 1.3 (b)
H2(a): The use of Facebook increases the Customer Equity of brands H2(b): The use of Twitter increases the Customer Equity of brands
Is it possible that the perception of quality, comfort and price is affected by the use of Twitter and Facebook and therefore affect the Value Equity of a company? These three factors seem to have nothing to do with a Facebook page or the tweets of a company. However, it is possible that customers rate the Value Equity of these companies higher because they perceive it to be higher. The following hypothesis will be tested.
H2.1 (a): The use of Facebook increases the Value Equity of brands/products H2.1 (b): The use of Twitter increases the Value Equity of brands/products
Further, there could be a link between the use of Twitter and Facebook and Brand Equity. Brand Equity was explained above as a subjective appreciation of a brand. Could the ‘subjective appreciation’ be influenced by the use of social media? As mentioned above, the brand pages and tweets contain a lot of information that could increase customers’ knowledge. It is possible that tweets and Facebook posts influence customers’ attitudes towards brands and their ethics. When this is the case, there could be a link between social media and Brand Equity.
H2.2 (a): The use of Facebook increases the Brand Equity of brands/products H2.2 (b): The use of Twitter increases the Brand Equity of brands/products
Retention Equity has already been discussed and the concept of loyalty as a form of Retention Equity has already been introduced. Mattila (2001) considers an emotional bond as an important aspect of driving loyalty and it can be created by a two-way exchange between a consumer and a service provider. Both Facebook and Twitter are making this two-way exchange possible. Therefore, is it possible that the followers of brands/products on Facebook and Twitter are more emotionally connected to these brands and therefore increase the Retention Equity of these brands?
H2.3 (a): The use of Facebook increases the Retention Equity of brands/products H2.3 (b): The use of Twitter increases the Retention Equity of brands/products
3.3 Getting to ‘know’ your heroes
Facebook started as a page for college students and evolved into a network that is connecting people worldwide. More and more people tweet or post about their personal experiences in daily life online. People share many aspects of their lives, like their location, opinions, pictures of nights out, etc. Everyone, including famous people, can share almost everything on Twitter and Facebook. Therefore, it is not surprising that the Facebook pages and Twitter accounts of famous people, like Doutzen Kroes, Robin van Persie and Martin Garrix, have more followers compared to the average person’s Facebook page or Twitter account. While for packaged goods, the product is the primary brand, and with services, the company is the primary brand (Berry, 2000), what is the primary brand when it comes to celebrities? Some celebrity accounts are fast-growing and these famous people, like DJ’s for example, are brands in themselves. When a famous person is considered a brand and a fan a customer, Customer Equity can be measured. When you visit the page of a famous soccer player, for example, you can find posts about matches, pictures of training sessions and personal family Figure 3.4. Conceptual framework of brands/products
Brands/ products Facebook Twitter Value Equity Brand Equity Retention Equity Customer Equity (H2.a) Value Equity Brand Equity Retention Equity Customer Equity (H2.b) H2.1(a) H2.3(a) H2.2(a) H2.1(b) H2.2(b) H2.3(b)
pictures as well. It seems that the Facebook pages and Twitter accounts of famous people function as interactive fan pages. People can experience a certain feeling of connectivity with celebrities. They can recognize themselves in their ‘hero’ because they share hobbies or opinions. Burger, Messian, Patel, del Prado and Anderson (2004) argue that we like people who are similar to us more than we like strangers, a phenomenon they call the similarity principle. Facebook and Twitter possibly increase the likeability and feeling of similarity between celebrities and their fans. This could be used as a marketing strategy to influence Customer Equity. Also, celebrities could benefit from participating in online discussions in fan communities, which could help to promote their work (Baym, 2007). Can these famous people influence their own Customer Equity by tweeting and posting on Twitter and Facebook (figure 3.5)?
H3(a): The use of Facebook increases the Customer Equity of celebrities. H3(b): The use of Twitter increases the Customer Equity of celebrities.
First, Value Equity will be explored. Do the factors of quality, price and comfort matter when we look at celebrities as a brand? And if they do, could this be influenced by the use of social media? This thesis will test the following hypothesizes:
H3.1 (a): The use of Facebook increases the Value Equity of celebrities. H3.1 (b): The use of Twitter increases the Value Equity of celebrities.
Second, the effect of Facebook and Twitter on the Brand Equity of a famous person will be examined. Fans can feel socially connected with a celebrity because the personal pictures or tone of voice in specific tweets can make these famous people more accessible. Fans see what these celebrities are doing and can react and sometimes even get a reaction from the celebrity. Therefore, Facebook and Twitter may increase customer knowledge of the brand (celebrity) and they could influence the customer’s attitude towards the celebrity. Thus, it is possible that the use of social media can increase the Brand Equity of celebrities.
H3.2 (a): The use of Facebook increases the Brand Equity of celebrities. H3.2 (b): The use of Twitter increases the Brand Equity of celebrities.
Third, the possible link between social media use and Retention Equity will be explored. Retention is a form of loyalty. When is a fan a loyal one? Can it be considered high Retention Equity when a fan of a famous DJ buys all of his tracks and concert tickets? And if this is the case, what could social media do to increase the retention rate? When we look at loyalty as a subject of Retention Equity, the feeling of personal connectivity with a celebrity can be affected by the famous person’s personal posts and Tweets. Affinity could also be influenced by personal messages since followers can agree or disagree with the celebrity. It is therefore possible that the use of Facebook and Twitter by a celebrity can affect Retention Equity. To answer these questions, the following hypothesizes will be tested:
H3.3 (a): The use of Facebook increases the Retention Equity of celebrities. H3.3 (b): The use of Twitter increases the Retention Equity of celebrities.
4.4 A short recap
The main purpose of this thesis is to investigate whether the use of social media (Twitter and Facebook) can be of any influence on the Customer Equity of organisations/companies. Social media is a widely understood and broad concept, therefore this thesis focuses mainly on Twitter and Facebook. Twitter and Facebook are the main foci because they are both easy
Celebrities Facebook Twitter Value Equity Brand Equity Retention Equity Customer Equity (H3.a) Value Equity Brand Equity Retention Equity Customer Equity (H3.b) H3.1(a) H3.2(a) H3.3(a) H3.1(b) H3.2(b) H3.1(b)
to use and well-integrated into modern society. The definition of Customer Equity in this thesis is as follows: “the value of a customer is not only the current profit of a customer but, the value of a customer/consumer are all the net earnings that an organisation can realise over time with a person” (Rust, et al. 2001, p.5). The way organizations are using social media differs enormously. It is possible that for some companies, Customer Equity can be influenced by the social media usage of their customers, while for other organizations, social media has no effect at all on Customer Equity. Therefore, this thesis looks into the possible effects of social media on three different types of organisations: service companies, brands and celebrities.
4 Research concept and method
4.1 Research design
This thesis is an explanatory type of research because the possible relationship between Facebook/Twitter and Customer Equity is examined (Lewis & Saunders, 2012, p.137). There are several possibilities and strategies for performing this research; a quantitative style of research is used in this thesis and an online survey is also used to conduct data. An online questionnaire is used because it is fast, anonymous, people can be reached easily and the data can be easily used in statistical software like SPSS 22. A large sample size is important to increase reliability. Rust et al. (2001, p.153) state that a good representation of Customer Equity must be based on a minimum quota of 100-1000 respondents. Therefore, this research must have at least 300 respondents (3 test groups) to provide a good representation. Since this amount of respondents is difficult to collect, a minimum sample size of 90 is used (30 respondents per test group). The questionnaire is sent by email and is posted on Facebook. Since the entire population is not available, this thesis is based on non-probability sampling (Lewis and Saunders, 2012, p. 134).
The survey starts with some basic background questions about the respondents. After these questions are answered, the survey starts. Since this thesis examines the possible effect of Facebook and Twitter on the Customer Equity of three types of businesses, the surveys consist of three parts. The first part is about service companies. The respondents are asked to choose a service company and answer the questions related to this company. The second part is focused on specific product brands, and the respondents choose a specific brand/product that he or she is following on Facebook/Twitter. In the third part, the respondents are asked to choose a celebrity whom they follow on Facebook/Twitter. If the respondents are not following any kind of company, celebrity or brand, they can move on to the last part of the questionnaire and answer the questions that are not related to social media (control group). All questions are in Dutch.
To increase the reliability of the research, a 5-point Likert scale is used. Compared to a scale with even numbers, a 5- point Likert scale does not mandate that the respondents choose a side because they can answer ‘neutral’. Therefore, the reliability of the research increases. However, if respondents answer ‘neutral’ multiple times, this could also be a downside.
4.2 Research concept and questionnaire
As stated above, Customer Equity has three drivers: Value, Brand and Retention Equity. To measure Customer Equity, each driver has to be measured by asking specific questions. Since this thesis focuses on the Customer Equity of products, service companies and celebrities, each question is adapted in such a way that it answers the questions measuring the drivers of each branch.
4.2.1 Value Equity
The driving forces behind Value Equity are quality, price and comfort. To examine how the respondents score the Value Equity of the three different branches, several questions relating the drivers of Value Equity had to be answered, meaning that questions about price, quality and comfort had to be asked. Since this thesis examines the Value Equity of three types of companies: service companies, brand/products and celebrities, there were a few differences in the questionnaire. The price quality question for celebrities is different in a question that compares a celebrity to another celebrity. The question about increasing value for money after Facebook or Twitter usage was formed in a question asking about how much more fun the celebrity became when he or she used Facebook or Twitter. The questions in the actual questionnaire were in Dutch.
4.2.2 Brand Equity
The three driving forces behind Brand Equity are the brand knowledge of a customer, attitude towards a brand and the attitude of a customer regarding the ethics of a brand. To measure how the respondents score the Brand Equity of service companies, brands/products and celebrities questions relating to these drivers had to be asked. There are several questions based on each driver, which in total measure the score on that specific driver (Rust et al, 2001, p.145).
4.2.3. Retention Equity
The five driving forces behind Retention Equity are loyalty programs, special recognition and treatment programs, affinity programs, community building programs and knowledge building programs. Respondents had to answer questions relating these driving forces to score the Retention Equity of service companies, brands/products and celebrities. One or more questions per driver had to be asked to measure the scores on Retention Equity of each branch from this research. One important difference between the questions about the service companies or products is that the questions about celebrities are more personal. Compared to the questions about the drivers of Retention Equity concerning the product or service companies, the questions about the celebrity were from person to person and therefore more interpersonal.
4.4 Research question and survey design
The main research question in this thesis is: How and to what degree can the use of Twitter and Facebook influence Customer Equity?
In this research, an online questionnaire is used to collect the data, which is needed to answer this research question. In the first part of the survey, demographic questions about the respondents, like age and gender, are asked. Afterwards, respondents have to answer a question that asks whether or not they use Facebook or Twitter. The surveys consist of three parts and the questions concern service companies, brands/products and celebrities. At the beginning of each part, respondents have to answer an open question where they have to write down a company, brand or person that they keep in mind while they are answering the next questions. The following questions are based on the Customer Equity model of Rust et al. (2001) and concern the drivers behind Customer Equity: Value Equity, Brand Equity and Retention Equity.
Since this thesis examines the possible influence of Facebook and Twitter on the drivers of Customer Equity for three different branches (service companies, brands/products and celebrities), the questionnaire contains three parts.
If respondents do not use Facebook or Twitter or if they only use it for personal use and not for following companies, brands or celebrities, then they answer the basic questions. These ‘basic’ questions are not related to Facebook or Twitter. This group of respondents is used as the control group. If people use Facebook or Twitter, they answer the same questions, but they relate their responses to Facebook or Twitter usage.
4.5 Data collection and sample
Before the online survey was sent to the respondents, a small pilot study was sent to a small group of ten people to test whether the questions were clear. Afterwards, the link to the questionnaire was shared on Facebook, sent by email and through WhatsApp to collect as many respondents as possible. The message that included the link to the survey contained a short introduction about the research, it’s duration and the questions. Since the questions in the survey were in Dutch, the respondents were Dutch. 61,3% of the respondents were female and the majority of the respondents were students (66,9 %). The research was non-probability sampling because not all of the population could be reached (Lewis and Saunders, 2012). A total of 163 respondents completed the survey.
4.5 Data analysis
After importing the data in SPSS 22, the possible missing values had to be checked. Since the survey had to be completed to upload the results, there were no missing values. The first part of the questionnaire concerned questions about gender, age, education and current employment. To get a picture of the respondents, these demographic statistics had to be analysed first. The results are presented in several histograms and a pie chart.
After analysing the demographic statistics, a reliability analysis had to be done. To test the reliability of the scales, the Cronbach’s alpha had to be tested. For this test, the reliability and the internal consistency of the scale can be checked (Cronbach, 1951).
After the reliability was tested, a Customer Equity analysis had to be performed. Rust et al. (2001) state that values can be used to measure Customer Equity means. Since this research focuses on the Customer Equity of three different branches (service companies,
brands/products and celebrities), the drivers of each group were measured separately for the three test groups (Facebook followers, Twitter followers and the control group). The results of these customer analyses are presented in several histograms.
After the Customer Equity analyses for service companies, brands/products and celebrities were performed, several independent t-tests had to be done to test if the measured values differed significantly from each other.
5. Results
In the following chapter, the results of the data collected by the questionnaires are presented. First, the statistics of the sample are given; Second, the reliability analysis is presented, followed by the Customer Equity analyses; and finally, the independent t-tests are presented.
5.1 Demographic statistics of sample
In the following section, the demographic statistics are presented. 163 respondents filled out the questionnaire. Figure 5.1 shows the percentage of females and males that filled out the questionnaire. In total, 61,3% of the respondents were female and 38,7% were male. The group of 15-25 year-old respondents was the biggest, with a percentage of 61,3, followed by the group of 26-35 year-olds, with a percentage of 24,5 (figure 5.2).
The largest part of the respondents is still studying (66,9%) and more employees than employers filled in the questionnaire (figure 5.3). The 7 people (4,3%) that filled in ‘other’ concern respondents who are looking for a job and independent contractors. Finally, 78,5% of the respondents have some level of higher education, with the highest level of education being university (figure 5.4). The two respondents (1,2%) who filled in ‘other’ were dropouts from high school. 38,7% 61,3%
Gender
Male Female 61,3% 24,5% 4,9% 3,7% 4,9% 0,6% 0 20 40 60 80 100 120 15-‐25 26-‐35 36-‐45 46-‐55 56-‐65 66-‐75 R esp on d en tsAge
Figure 5.2. Distribution of age Figure 5.1. Distribution of gender
After the questions about age, gender, education and employment, the respondents were asked if they use social media. A percentage of 77,3 claimed to use social media (figure 5.5).
After these demographic overview questions, the questionnaire was divided into three parts. The first part concerned questions regarding service companies; the second part concerned the products/brands; the third part concerned celebrities. Since this research is focused on the channels that are used by the respondents, each part starts with questions about the channel they use to follow service companies, products/brands or celebrities. The percentages per section are presented below (figure 5.6 to 5.8).
77,3% 22,7%
Social media usage
Use Social media Aren't using Social mediaFigure 5.5. Distribution social media use/non use 22,7% 30,7% 23,9% 22,7%
Service companies
Follow on Twitter Follow on FacebookUse social media however does not follow a service companie online Control group
Figure 5.6. Distribution social media groups service companies 3,7% 1,2% 15,3% 78,5% 1,2% 0 20 40 60 80 100 120 140 R esp on d en ts
Education
Figure 5.4. Distribution of education 66,9% 4,3% 24,5% 4,3% 0 20 40 60 80 100 120
Student Employer Employee Other
R esp on d en ts
Current Employment
Figure 5.5, 5.6, 5.7 and 5.8 above indicate that overall, more people use Facebook to follow service companies, products and celebrities online compared to the other options. Unfortunately, there are people who use social media but they are not using it to follow one of the three options (service companies, brands/products or celebs) online.
5.2 Reliability analysis
To test the reliability of the scales the Cronbach’s alpha is used. With this test, the reliability and the internal consistency can be measured. The score of the test can be between 0 and 1. A score of at least 0.7 is preferred because this indicates that the scale is reliable (Cronbach, 1951).
This research uses three questionnaires: one concerning the respondents who do not use social media and the second and third concerning those respondents who are following service companies, brands/products or celebrities on Facebook or Twitter. Thus, the reliability had to be checked for each part separately. Since the questions concern the drivers of Customer Equity, each part also had to be checked separately (Table 1).
Every section has at least a value of 0.711 or higher, and only the questionnaire regarding the control group about celebrities has a score of 0.325. Even when questions were deleted, the score did not and could not increase, meaning that the scale of this questionnaire is not reliable and that there is a low internal consistency.
25,8% 25,8% 25,8%
22,7%
Celebrities
Follow on Twitter
Follow on Facebook
Use social media however does not follow a service companie online Control group
Figure 5.8. Distribution social media groups Celebrities 22,7% 33,1% 21,5% 22,7%
Brands/products
Follow on Twitter
Follow on Facebook
Use social media however does not follow a service companie online Control group
Figure 5.7. Distribution social media groups
Table 1
Cronbach’s Alpha’s of questionnaires
Facebook Twitter Control Group
Cronbach’s Alpha N of Items Cronbach’s Alpha N of Items Cronbach’s Alpha N of Items Service Companies Value Equity 0.770 4 0.754 4 0.745 3 Brand Equity 0.833 11 0.801 11 0.735 10 Retention Equity 0.890 8 0.874 8 0.532 8 Brands/products Value Equity 0.748 4 0.746 4 0.809 3 Brand Equity 0.758 11 0.852 11 0.778 9 Retention Equity 0.822 7 0.89 7 0.773 8 Celebrities Value Equity 0.783 3 0.711 3 0.325* 2 Brand Equity 0.850 11 0.787 11 0.836 10 Retention Equity 0.935 10 0.949 10 0.783 10
Note. 0.325* is below 0.7 and therefore the scale of that part of the questionnaire is not reliable and consistent.
5.3 Customer Equity Analysis
In the following section, the results of the drivers of Value, Brand and Retention Equity are presented separately for service companies, brands/products and celebrities.
