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Elareshi, M.; Habes, M.; Safori, A.; Attar, R.W.; Noor Al Adwan, M.; Al-Rahmi, W.M. Social Media Marketing and Bank Loyalty of Customers. Encyclopedia. Available online: https://encyclopedia.pub/entry/50375 (accessed on 15 May 2024).
Elareshi M, Habes M, Safori A, Attar RW, Noor Al Adwan M, Al-Rahmi WM. Social Media Marketing and Bank Loyalty of Customers. Encyclopedia. Available at: https://encyclopedia.pub/entry/50375. Accessed May 15, 2024.
Elareshi, Mokhtar, Mohammed Habes, Amjad Safori, Razaz Waheeb Attar, Muhammad Noor Al Adwan, Waleed Mugahed Al-Rahmi. "Social Media Marketing and Bank Loyalty of Customers" Encyclopedia, https://encyclopedia.pub/entry/50375 (accessed May 15, 2024).
Elareshi, M., Habes, M., Safori, A., Attar, R.W., Noor Al Adwan, M., & Al-Rahmi, W.M. (2023, October 17). Social Media Marketing and Bank Loyalty of Customers. In Encyclopedia. https://encyclopedia.pub/entry/50375
Elareshi, Mokhtar, et al. "Social Media Marketing and Bank Loyalty of Customers." Encyclopedia. Web. 17 October, 2023.
Social Media Marketing and Bank Loyalty of Customers
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This entry is adapted from the peer-reviewed paper 10.3390/electronics12081822

E-marketing has impacted customers’ bank loyalty regarding its online services, and the role of social media marketing has remained very important to enhancing customer-based loyalty. 

e-marketing social media marketing customer loyalty banking customers digital banking

1. Introduction

Social media sites, weblogs, discussion forums, and review websites are popular online environments where users can share and exchange their views and experiences with others, including organizations [1][2][3][4], and interact quickly with other users, regardless of their locations [5]. In marketing, the way in which the Internet, information, and communication technology (ICT) have been used by different profit and non-profit businesses has reminded us of their great contributions to marketing, through communication, interaction, etc., and also, of even greater significance, how social media sites can be used not only to promote a company’s products and services, but also to increase customer loyalty [6]. Banks typically use a variety of social media platforms to communicate/respond to their customers’ demands and queries [1][7]. In fact, social media sites and their interactive nature have led many banks to achieve a high level of marketing through what is known as social media marketing (SMM) [6][8]. SMM is a form of Internet marketing that uses social media applications, such as Facebook, Instagram, and TikTok, for brand promotion, audience targeting, website traffic, etc., and enables brands to connect easily with their audiences [9]. In fact, it is arguably very difficult now for banks to operate/survive without adopting and integrating SMM [10][11], as this process is now part of every business [12]. Most bank services use mobile applications and social media for communication, and such accessibility and interaction can affect customers’ behavioral intentions regarding the use of online communication and information for further benefits (linked to loyalty). This has led us to gain further insights into such phenomena, and there are emerging questions as to what impact SMM has on organizations (e.g., banks), how this is perceived by customers, and how it can lead to customers’ loyalty [13]. Such interaction affects the long-term relationship between banks and their customers. Online customers use social media for more than mere information. They also interact with, evaluate, and contribute to the online environment at the same time [6]. SMM can provide several opportunities and improve bank services in terms of ease of use and accessibility at affordable rates.
While such relationships are important, research has suggested that there are gaps in the understanding of the relationship between SMM and customers’ loyalty, e.g., in banks [12]. According to Priansa and Suryawardani [14], social media has become a major revenue-generating platform for marketers and advertisers, although the relationship can be affected by the lack of trust and reliability between the two parties. Due to this quick and effective communication, online users mostly possess their own opinions (positive/negative) about any brand or company [15]. The popularity of social media in Jordan, as in many countries, allows firms to deliver compelling services and content for users in a smart way. Currently, Jordan has more than six million active Internet users and 6.30 million social media users, but this number increased by only 11% between 2020 and 2021 [16]. The major social media platforms are Facebook (5+ million users), FB Messenger (3+ million users), and Snapchat and Instagram (both with almost 2.80 million users). These figures indicate a huge opportunity for potential e-commerce in Jordan. The market must search out customers’ needs and desires through consistent and reliable strategies to gain their loyalty [17][18].

2. Social Media Marketing and Bank Loyalty of Customers

2.1. Social Media Features (SMF)

Social media platforms have become a tool of influence in almost every sector, including banks. Their effectiveness has been proven and is linked to customers’ connections, the building of brands, increasing sales, loyalty, etc. [1][2][3][4]. They allow two-way communication—e.g., the exchange of feedback and views about the business. People use social media, e.g., to share their experiences with others, including companies, through posts, tweets, likes, etc. [19]. This, in turn, can affect business relationships and customers’ attitudes and perspectives about the business, which is seen as extremely valuable for any business wanting a better understanding of their customers’ perceptions. In the last decade or so, Arab countries have increased their use of the Internet and social media for various matters, including marketing [2][17]. For their perceived ease-of-use and usefulness, social media sites are commonly used by Arab (non)-profit businesses, including governmental bodies, for advertising, promotion, awareness, and interaction [11]. For example, Alzahmi [6] examined how Islamic banks in the UAE employ social media marketing (e-marketing) to enhance their relationships with customers and how customers’ attitudes toward banking services can be used to improve their quality. He found a strong relationship between the adoption of e-marketing and banking services. Tashtoush [20] also examined the effectiveness of social media (e.g., Facebook) on the buying decisions of commercial banks’ customers in Jordan and found that they affected customers’ buying behavior by 73%, factor linked to interactivity.
Furthermore, most Arab Internet users use the Internet for various reasons [21], including online shopping and accessing different services, e.g., viewing online banking services [22][23]. Online users interact and engage with companies by keeping an eye on promotional offers while engaging in their normal online activities. It is the Internet and social media that allow this, and marketing has come to rely heavily on this process, becoming an important everyday part of any sector, including banks [7]. Through their ease-of-use, usefulness, cost, etc., social media platforms have allowed many firms to introduce their products or services and market them [8]. The growing number of Internet and social media users in Jordan is itself an indication that users can communicate and share information (feedback) with firms. For example, not only do users read online content, but they become content producers, sharing different visual and non-visual content. Veland et al. [24] indicated that social media marketing is a multi-channel platform used to influence users’ interest in making purchases or in using a service [25].
Social media platforms have several features (a simple and friendly user interface, visually appealing design, content-sharing methods, messaging systems, real-time notifications, etc.) which have changed the structures in the commercial sector, developing a new and amazing variety of modern client that is hard to impact, to convince, and to retain [26]. Social media can help any business in terms of attracting customers, increasing marketing reach and revenue, and building customer loyalty. Studies confirm the power of SMM in shopping decisions [27], brand development [28], interactivity [20], and purchase intentions [29][30]. For example, Tashtoush [20] indicated that social media in Jordan have a role in affecting customers’ buying behavior (by providing information, messages, etc.), especially when it comes to making buying decisions, and Permatasari and Laydi [30] found there to be significant influences, in terms of entertainment, economic value, social value, and credibility, on consumer attitudes and thereby on purchase intention. Consequently, scholars adopted the two main factors of the TAM model to explore how online users perceive online banking services, and whether the use of SMF in banking services can affect customers’ behavioral intention and loyalty [23].

2.2. Electronic Word of Mouth (EWM)

Word of mouth, generally, is the transmission of information through talking between individuals regarding something in general, or specific goods and services, either positively or negatively [2][31]. With the rapid growth in Internet usage, the way in which online users communicate and share feedback and information with others is now known as electronic word of mouth (EWM) [32][33]. This refers to a form of communication, based on electronic means [34], that is used to influence customers’ attitudes and behaviors. It plays a crucial role in promoting any business [27][32] because information through EWM is regarded as highly credible and trustworthy [35].
With the advancing of social media, EWM is often seen as an influential, speedy, and effective platform [36][37]. For example, today’s customers tend to look for information/feedback posted by previous customers (with repetitive reviews from customers) prior to deciding to do something, e.g., online shopping [38]. Sharing experiences regarding use/purchase of goods, products, and services, motivates/(dis)encourages others to buy/use certain goods/services [27][31].
Customers consider EWM, circulating among themselves, as more credible than promotional operations [39]. Ying et al., [40] applied the TAM model to the intent of electronic purchase and found a positive effect of word of mouth in motivating customers during the purchase process. Others have indicated that online reviews can have an impact (positive/negative) on influencing users to get the services provided. Reviews/feedback can be used as company feedback to improve its services/goods/products [33], suggesting that EWM can be used by a company to obtain more users. EWM, therefore, can promote brand awareness and lead to customer loyalty based on the concept of perceived usefulness and perceived ease of use [37].

2.3. Informativeness (INF)

Information can be seen as a motivation in customers’ responses to marketing ads [35]. Online customers’ intent to purchase/use a product or a service is based on information (and that information’s accuracy, usefulness, and comprehensiveness) that they receive from friends’ reviews or recommendations, etc. [41][42]. Lee and Hong [42] have indicated that informativeness is one of the factors influencing users’ responses to social media ads. The abundance of information displayed and available about goods/services is a key matter for customers [41]. Yadav and Rahman [43] have indicated that informativeness is important for online customers in purchasing goods/services, especially in the online environment—e.g., the more information that users gain/receive about certain services/goods, the more able they are to decide on whether to purchase such services or even to recommend them to others [35].
The TAM model, through perceived usefulness and perceived ease-of-use, helps us to understand customers’ behavioral intentions in terms of accepting a system/service, e.g., online banking information. Social media platforms have enhanced customers’ ease-of-use regarding all information and the easy and smooth achievement of what is required [44]. Kim et al. [45] examined the impact of the TAM model on online marketing and advertising and found that online advertising affected users’ perception of information’s usefulness and ease of use.

2.4. Customer Loyalty (CL)

Customer loyalty (online/offline) is often referred to as customers’ behavior toward a particular brand, proven by their inclination to use the brand regularly [10][46]. It is a very important aspect, in terms of driving revenue, for any business [47]. Loyalty is also an integral factor in the customer–brand relationship [17]. Studies of customer behavior indicate that success and increased profitability in any business are very much linked to outcomes of loyalty regarding a brand—e.g., a positive attitude, trust, customer satisfaction [32][34], and additional purchases [35]—through encouraging loyal customers to spend/buy more. Studies refer to customer loyalty as the repeated use, in terms of purchasing, of a specific platform, resulting in loyalty to the same platform [10]. Communication through online banking services is a good opportunity for a business to create a positive customer experience if the bank understands the benefits when it comes to customer loyalty, which is highly recommended, as Taylor et al. [48] stated. For example, when customers prefer the same brand, they tend to recommend it to family and friends [47]. This means that customers intend to sustain the valued relationship with the brand. In other words, loyalty can indicate the behavioral intention of a customer’s willingness to revisit the brand for further services [32].
It seems that social media marketing activities can have a vital role in building customer behavior, e.g., in buying products [38]. To boost customer loyalty, bank managers might need to focus more on launching exclusive information content through social media features and electronic word of mouth. These platforms are proven to be effective in promoting online banking services and products. This means that banks might need to invest in SMM to gain a better understanding of their customers’ consumption habits and to offer them the most compelling bank content. This should lead to improving and measuring customers’ loyalty and users’ online experience.

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Subjects: Communication
Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :
Mokhtar Elareshi
,
Mohammed Habes
,
Amjad Safori
,
Razaz Waheeb Attar
,
Muhammad Noor Al adwan
,
Waleed Mugahed Al-Rahmi
View Times: 214
Revisions: 2 times (View History)
Update Date: 18 Oct 2023
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