A Little Bit Goes a Long Way: How Hotels Increase Loyalty from Social Media Communication

Abstract

Customer loyalty has become a major source of competitive advantage for many businesses. The goal of our study was to determine the impact of social media communication on hotel program loyalty. We contend that social media communication style and information quality will impact consumer social media behavior which will in turn lead to increased loyalty to hotel reward programs. Utilizing an online random sample of 575 participants, our study determines that communication style and information quality are important to engaging members in social media behaviors. By having members engage in social media behavior, they will increase the benefits (knowledge/education) from C2C communication as well as experience other benefits such as enjoyment.

The goal of our study is to determine the impact of social media communication on hotel program loyalty. We contend that social media communication style and information quality will impact consumer social media behavior which will in turn lead to increased loyalty to hotel retention programs.

Loyalty programs provide both psychological and economic value to program members. Earning rewards gives consumers a sense of appreciation and recognition. This psychological experience increases the transaction utility of a purchase and the likelihood of continuing the relationship (Lemon et al. 2002). Furthermore, it increases the overall value perception of staying in the relationship by feeling important (Bitner 1995). An additional psychological benefit of loyalty programs includes the opportunity to indulge in guilt-free luxuries (Liu 2007). Economic value is provided by the rewards that are offered to members for repeat purchase behavior. These rewards positively reinforce repeat purchase behavior and condition the customers to continue doing business with the company.

Businesses which actively take part in increasing social media communication with consumers will see increases in behaviors and such increases should ultimately impact loyalty. This study has shown that communication style and information quality are important to engaging members in social media behaviors. By having members engage in social media behavior they will increase the benefits (knowledge/education) from C2C communication as well as experience other benefits such as enjoyment.