Conceptualizing the Dynamic and Iterative Nature of ...

43th European Marketing Academy Conference (EMAC), 2014, Valencia, Spain

Conceptualizing the Dynamic and Iterative Nature of Customer Engagement Julia A. Fehrer*, University of Bayreuth Herbert Woratschek, University of Bayreuth Claas Christian Germelmann, University of Bayreuth

Abstract Along with the perspective shift in marketing theory towards a Service-Dominant (S-D) logic and the change in consumer behavior, due to new media, the Customer Engagement (CE) concept is gaining increasing levels of scholarly interest. However, a lack of empirical scrutiny exists in the current literature, regarding the dynamic and iterative nature of the CE concept. The present paper identifies relational concepts, which were used as antecedents and/or consequences of CE. The findings outline critical differences underpinning the nomological network analysis of CE. Thus it contributes to the theoretical development of CE and provides tangible implications for empirical research. Keywords:

Customer Engagement, antecedents and consequences, dynamic processes

Track:

Marketing Theory and New Paradigms

1. Introduction In 2013 more than 1.15 billion users worldwide are logged in the most prominent social network, Facebook.com (Socialbakers, 2013). Social media have become part of every-day life and are heavily used by all strata of the population, regardless of educational background, or income (Vor dem Esche & Hennig-Thurau, 2013). This development has changed the interaction between individuals significantly and moved the customer-firm interactions towards a new behavioral scheme. Due to the technological innovations of the last decade, the boundaries between producers and customers are getting more and more blurred (HennigThurau et al., 2010). Customers act as resource integrators (Vargo & Lusch, 2004; 2011). They communicate via Youtube about brands, write referrals on travel portals, help other customers to solve their software problems online and share all of this with their friends on Facebook.com and Twitter.com. Firms are increasingly recognizing the importance of this new customer behavior, but are yet to have fully adapted to this change in society (Vor dem Esche & Hennig-Thurau, 2013), probably also due to the fact that it cannot be mapped with established business models and corporate strategies (Hennig-Thurau et al., 2010). New marketing theories and concepts are required to provide guidelines to understand and handle the new phenomena of customer behavior and its influence on firm performance. In the academic service and marketing literature a new perspective of a Service-Dominant (S-D) logic (Vargo & Lusch, 2004) is becoming increasingly widespread in the last decade. Within 10 foundational premises (FPs) a perspective shift from product centric marketing theories towards a service centric approach was launched (Vargo & Lusch, 2008), including a new understanding of “co-creation” and “resource integration” (Vargo &Lusch, 2004; 2008; 2011). Service in the context of the S-D logic means the application of operant resources (knowledge and skills) and is the fundamental basis of exchange (FP 1). These operant resources are provided by all market players or so called actors, such as firms, competitors, suppliers and customers (FP 9). Following this logic all actors, especially customers are cocreators of value (FP 6) (Vargo & Lusch, 2004; 2008). In this sense the S-D logic offers a general marketing-theoretical framework to investigate the new phenomenon of interactive customer behavior in virtual environments. To operationalize this relatively abstract framework, Brodie et al. (2011c) suggest the introduction of Customer Engagement (CE) as a basis for empirical research. This concept provides a concrete, actionable approach aligned with business practice. CE describes the two-way interactive, co-creative experiences between customers and firms, consisting of cognitive, emotional and behavioral dimensions (Brodie, Hollebeek, Juric & Ilic, 2011a; Brodie, Hollebeek & Smith, 2011c; Gambetti & Graffigna, 2010; Hollebeek, 2010, 2013; Vivek, Sharon & Morgan, 2012). In addition CE has emerged as a key concept affecting firm profitability, with a focused view on behavioral manifestations beyond product purchase, such as online recommendations, helping other customers, blogging and co-producing new products (e.g. Hoyer, Chandy, Dorotic, Krafft & Singh, 2010; Kumar, Aksoy, Donkers, Venkatesan, Wiesel & Tillmanns, 2010; Van Doorn et al, 2010). In order to gain further insights how CE and specific relational concepts (e. g. involvement and satisfaction) work together in virtual environments, this paper identifies the key antecedents and consequences of CE, based on a systematic literature review. The findings outline critical disagreements and subsequent alternative causality-relationships as well as critical differences underpinning the nomological network analysis of CE. The illustrated contrasts will provide the basis for stimulating an important debate about theoretical foundations and provide a new lens on empirical research in this area.

2. Stable and dynamic roles of relational concepts in the nomological network of CE 2.1 Research approach To obtain indicators for building a construct including the proposed dynamic and iterative nature of CE, the current academic marketing and service literature was reviewed in terms of CE and its antecedents and consequences. In a multistep review procedure, overall 413 research studies were found by using the search query "Customer Engagement" OR "Consumer Engagement" OR "Brand Engagement" in three of the largest databases for academic literature: jstor.com, sciencedirect.com and ebsco.com. After a qualitative review, including the proof of journal and content quality, 127 studies were categorized as relevant for CE research in general, and 23 studies were identified dealing with antecedents and consequences of the concept. Studies working with a CE reflective understanding, without explicitly mentioning it, were included in the present investigation. A Total of 57 different antecedents and 52 consequences could be identified. To ensure a strong evidence of a cause-effect relationship, variables mentioned in less than two different studies were removed from further analysis. Following this premise 12 relational concepts could be extracted: Satisfaction, trust, involvement, word of mouth, commitment, loyalty, customer value, interaction, identification, identity, hedonism, and product innovation. Some of these concepts could be assigned to a stable role within the cause-effect relationship, either as an antecedent or a consequence of CE, others were treated as both. One explanation for the identified alternative causality-relationships could lie in the different theoretical understandings of CE in the underlying studies. To pursue this proposition, a second research step was done, focused more in detail on the conceptualization of CE. As a result, two perspectives of the theoretical understanding of CE were worked out as relevant for the present investigation. One perspective (CE state) defines CE as a psychological state and underlines the interactive, co-creative experiences (Brodie et al., 2011a; Brodie et al., 2011b; Calder, Malthouse & Schaedel, 2009; Gebauer & Pezzei, 2012; Goldsmith, Flynn & Clark, 2012; Hollebeek, 2011). By contrast the second perspective of CE (CE behavior) focuses on the behavioral aspect, regarding the transfer of effort in a customerfirm interaction from the organization to the customer (Bijmolt, Block, Eisenbeiss, Hardie, Lemmens & Saffert, 2010; Bolton & Saxenlyer-Iyer, 2009; Eisenbeiss, Blechschmidt, Backhaus & Freund, 2012; Grissemann & Stokburger-Sauer, 2012; Hoyer et al., 2010; Karakaya et al., 2010; Kumar et al, 2010; Libai et al., 2010; Nambisan & Baron, 2012; Ngo & O'Cass, 2012; Sawhney, Verona & Prandelli, 2005; Tsai, Huang & Chiu, 2012; Van Doorn et al., 2010; Vivek et al., 2012; Vries et al., 2012). 2.2 Findings The findings of this multistep review procedure contribute to deepen the understanding of CE nature. Regarding the roles of the investigated concepts, three types of relations, as depicted in figure 1, can be assumed, based on the cause-effect relations previously used in the literature. The first type is characterized by stable relations either as antecedents or consequences linked to CE. Identification (A6) (Nambisan & Baron, 2007; Tsai et al., 2012), identity (A7) (Eisenbeiss et al., 2012; Van Doorn et al., 2010) and hedonism (A8) (Gambetti, Graffigna, & Biraghi, 2012; Nambisan & Baron, 2007) take stable roles as antecedents. Equally WoM (C6) (Bolton & Saxenlyer-Iyer, 2009; Gebauer & Pezzei, 2012; Kumar et al., 2010; Vivek et al., 2012), loyalty (C7) (Bowden, 2009; Brodie et al., 2011b; Grissemann &

Stokburger-Sauer, 2012; Hollebeek, 2010), customer value (C8) (Bijmolt et al, 2010; Kumar et al., 2010; Libai et al., 2010; Vivek et al., 2012), and product innovation (C9) (Hoyer et al., 2010; Sawhney et al., 2005) are used to be stable consequences of CE. Commitment and trust can be assigned as both as antecedents (A4 / A4), e.g. in the fundamental exploratory investigation of Van Doorn et al. (2010) and in the empirical study of Tsai et al. (2012) or as consequences (C4 / C5) following the fundamental, exploratory studies of Hollebeek (2011) and Brodie et al. (2011b; 2011a). Including the theoretical understanding of CE in each of the underlying investigations, however a clearer picture is distinguished. Commitment and trust are defined as antecedents, if CE is used with an understanding of CE behavior and vice versa as consequences, if the perspective of CE state is assumed. Thus these concepts can be declared as semi-stable relations linked to CE. Antecedents

Stable relation

Semi-stable relation

Dynamic relation

Satisfaction

Consequences A1

C1

Satisfaction Satisfaction

C2

Interaction

C3

Involvement

C4

Commitment

C5

Trust

C6

WoM

C7

Loyalty

CE state Interaction

A2

Involvement

A3

Commitment

A4

Trust

A5

Identification

A6

Identity

A7

Hedonism

A8

CE behavior

CE state CE behavior

CE state CE behavior

C8 C9

Customer Value Product Innovation

Figure 1: Proposed roles of specific relational concepts

The most critical disagreements exist regarding the concepts satisfaction, interaction and involvement. For these relational concepts literature sources were found, that treat them as antecedents and others as consequences, even if the CE perspectives in the studies are congruent. Thus satisfaction can work as an antecedent (A1) of CE, following the fundamental research work of Van Doorn et al. (2010) and an empirical study in the context of virtual environments of Tsai et al. (2012). By contrast it is proposed as a consequence in several central conceptual and empirical studies (C1) (Brodie et al., 2011b; Grissemann & Stokburger-Sauer, 2012; Hollebeek, 2011; Hoyer et al., 2010). Interaction was tested empirically with a positive influence on CE in the context of virtual environments (A2) (Tsai et al., 2012; Vries et al., 2012). However, Bolton & Saxena-Iyer (2009) describe interaction within a framework of interactive services as a behavioral outcome of CE and hence as a consequence (C2). The fundamental CE research declares involvement as an antecedent of CE (A3) (e.g. Brodie et al., 2011b; Hollebeek, 2011), what has been empirically confirmed in a virtual environment context by Nambisan & Baron (2012). Conversely Goldsmith et al. (2012) empirically confirmed involvement as a CE consequence (C3). Based on these results,

it can be assumed, that the causality relation between CE and specific relational concepts, like satisfaction, interaction and involvement does not run one-way. A dynamic and iterative CE nature has to be considered.

3. Implications for research This article provides a conceptual foundation for stable and dynamic roles of relational concepts linked to the CE concept. From this theoretical perspective further empirical work addressing the dynamic, iterative and network processes of CE is inquired (Hollebeek, 2010). Based on the previously described, different theoretical understandings of CE, separate scales for CE state and CE behavior seem appropriate for the operationalization of the CE concept. In addition, an empirical design needs to be developed, which allows measuring CE depending on dynamic causality relations of antecedents and consequences. As a second research step, network variables should be introduced, to break up the isolated individual perspective of one actor and open it to a network of actors in social relations. Basically, there are two methods to deal with dynamic relations. First, longitudinal analyses could describe dynamic processes. To observe changes regarding the CE strength and the underlying causality relations, a longitudinal study provides an accurate measurement method. Second, experiments could show whether a variable related to CE is dominant. Experiments have the advantage of showing uncovering causal relationships while controlling for possible confounding variables. Thus, managerial implications about potential drivers of target variables can be derived from the findings. However, single experiments can only capture one-way effects. Thus, for investigating feedback loops in the variables the researcher is interested in, more than one experiment would need to be undertaken, with exchanging independent and dependent variables.

4. Conclusion The research interest of this work-in-progress is driven by the need to deepen the understanding of CE and its types of linkage to relevant relational concepts like satisfaction, interaction and involvement. Regarding the roles of the investigated concepts, three types of relations can be assumed, a stable relation, a semi-stable relation and a dynamic relation, which is the most complex one to deal with. Beyond that the present study provides further insights regarding the requirements to the operationalization of the dynamic and iterative nature of CE. Despite gaining these new insights the present research is also subject to some limitations. First, the categorisation of antecedents and consequences within this investigation is not conclusive and has to be empirically verified. Second, in this study the search query regarding the relevant literature is focused explicitly on engagement. In order to generate an even more complete understanding of the antecedents and consequences of CE in future studies related literature, especially in the virtual environment context should also be reviewed (e.g. Open Innovation, Crowdsourcing, Social Media Interaction, etc.) The present study provides a basis for future research regarding the operationalization of CE. The next step must be an empirical testing of the dynamic and iterative CE nature and its linked relational concepts.

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