Modeling Customer Equity: The Roles of Social Networking Sites, Trust, and Brand Equity

The popularity of social networking sites (SNSs), especially Facebook and Twitter has grown tremendously in the past few years. Internet World Stats (2012) reports that more than 835 and 140 million are active users of Facebook and Twitter, respectively. Particularly in the Asia-Pacific region, 240 million online users visited SNSs in 2010, accounting for 50 percent of online population (Baird and Parasnis 2011). These online platforms have transformed online consumer behavior which creates potential opportunities for firms to advertise their products to better serve existing customers and attract new ones. SNSs allow brands to interact with consumers, thereby gathering a major stage in e-commerce (Boveda-Lambie and Hair 2012). Recognizing this trend, marketers have invested considerable resources on SNSs by setting up their brand profile page in generating awareness and interest, and ultimately product purchase. Among various industries, the apparel is the fastest-growing segment in e-commerce (eMarketer 2012). Leveraging SNSs has become a major strategic communication vehicle for apparel brands in hope of enhancing brand equity and ultimately customer equity. Specifically, many fast fashion brands with zero advertising expenditure policy (i.e., Zara, H&M) have been relying on SNSs as a means of effectively communicating with their targets. However, while taking advantage of the interactivity that SNSs deliver, whether or not SNSs engagement can influence customer loyalty remains unanswered, how to use SNSs to establish customer relationship has received the least research attention (Baird and Parasnis 2011). McKnight et al. (2002) indicates that consumer engagement in vendor’s website, as a result of trust, could influence adoption of products. However, the effect of consumer engagement in SNSs on their intended behavior has not been thoroughly investigated (Gummerus et al. 2012). To date, very few studies have examined the role of SNSs that drive consumers to interact with firms’ marketing effort on these online platforms that may have different effects on their subsequent cognitive and behavioral decision-making outcomes.