Relationships between Customer Socialization, Customer Participation, and Loyalty in On-line Service Providers Abstract Purpose -This study aims to propose and validate a research model describing the relationships between customer socialization, customer participation, and customer loyalty in online service industry. Research design/ data / methodology –This study develops survey questionnaires regarding the constructs within the proposed research model. Current members of Facebook and DaumKakao are selected as the sample for conducting the survey. The collected data is analyzed by structural equation modeling method using SPSS and AMOS programs. Results –Proposed hypotheses of the positive relationships between customer socialization and customer participation, and between customer participation and customer loyalty are all supported. Conclusions –The results of this study suggest customer loyalty as a manageable resource in the online service industry. Also, customer socialization is validated as a new strategy to increase customer participation. These results validate the practical importance of communicating mission, purpose, value, and other customer socialization activities that firms undertake. Keywords : Customer socialization, Customer participation, Customer loyalty, Online services, Facebook, DaumKakao JEL Classifications :M10, M15, M30
1. Introduction Customers take on an important role within the distribution system of the online service industry. Customers’ role as a co-producer or a co-value creator is critical to the competitiveness of the firms in online service industry (Holland et al., 2001). In the online service business, users produce and distribute online content (Holland et al., 2001). Also, when new products or services are released, customers participate in a process to improve the service or product by giving negative or positive feedback to the firms (Park, 2013). Although, due to low switching costs, customers show low loyalty in online service industry (Deng et al., 2010), utilizing customer participation may pose as a key to increase customer loyalty in the online service industry. Thus, a comprehensive research needs to be conducted on what stimulates customer participation and how customer participation influences customer loyalty. According to the study on customer socialization based on the organizational socialization theory, particularly in service industry, customer socialization can encourage customer participation (Guo e al., 2013; Wu, 2011). Customer socialization is a process that firms make efforts to help customers to understand the vision, objective, and core value of the firms, to become interested in the firms, and to have favorable attitudes to the firms. This study proposes the research model and hypotheses on the relationships between customer socialization, customer participation, and customer loyalty, and then conducts an empirical analysis. Because customer participation is particularly important in the online platform business, this study validates the research model and hypothesis on a popular social network service (SNS), Facebook and a popular platform service in Korea, DaumKakao.
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- Fall '19
- Social network service, Service system, Tertiary sector of the economy, Customer Participation