The social sphere: Loyalty creation or pure utopia? An analysis of loyalty creation on Facebook

Abstract

Society today is a postmodern era where consumers are fragmented multi-individuals who, to a large extent, rely on their networks. Due to the increased fragmentation of the consumers, a shift from mass communication to one-to-one communication is taking place. The Danish consumers are extremely sceptical in relation to advertising, and social-networking sites have increased transparency and credibility and thereby increased consumers’ requirements for commercial honesty. The social network Facebook has become a powerful marketing tool with the possibility of building relations with consumers through online brand communities. However, the motive for joining differs depending on brand and industry, and companies’ lack of understanding motives may entail a risk of pseudo loyal members. Offering a value proposition within the community and creating true loyalty is perceived as vital in order to survive in the media boisterous society. Due to a revolution of media, location-based marketing appears to be indispensable in today´s competitive landscape, where the new feature of Facebook, Facebook Deals, will create an enormous sales potential for companies, who can finally target their advertising to the location of their users. The objective of this research is to investigate to what extent it is possible to create consumer loyalty on Facebook and from where loyalty on Facebook emerges. Based on secondary and qualitative data, seven joining motives were identified and constituted the basis of a Loyalty Parameter Model (LP). Coherences between joining motives and the ability to create loyalty on Facebook were found, where pseudo loyalty is created in four instances, and true loyalty exists in three instances, respectively informative content, financial incentives and influence. Moreover, it is found that the introduction of Deals will connect the shady ends of Facebook, where Facebook Pages can enhance loyalty and Deals can boost sale. However, our findings showed a tendency to prefer the most affordable Deal over favoured brand, where Individual Deal restrains the strongest commercial potential. The formula for attaining truly loyal members is customized to the individual company and industry, wherefore measuring the performance of a company’s brand community by its number of members or likes are found to be invalid; instead a gradual measurement of loyalty is recommended.