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Toward a Theory of Customer Engagement Marketing

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Toward a Theory of Customer Engagement Marketing J. of the Acad. Mark. Sci. DOI 10.1007/s11747-016-0509-2 CONCEPTUAL/THEORETICAL PAPER Toward a theory of customer engagement marketing Colleen M. Harmeling1 & Jordan W. Moffett2 & Mark J. Arnold3 & Brad D. Carlson3 Received: 8 August 2016 /Accepted: 15 November 2016 # Academy of Marketing Science 2016 Abstract Customer engagement marketing—defined as a firm’s Whether intrinsically or extrinsically motivated, guided or un- deliberate effort to motivate, empower, and measure customer guided by the firm, customers are now active contributors to a contributions to marketing functions—marks a shift in marketing wide variety of marketing functions (e.g., customer acquisition research and business practice. After defining and differentiating and retention, product innovation, marketing communication, engagement marketing, the authors present a typology of its two merchandising) (Malthouse et al. 2013;Nambisan2002). They primary forms and offer tenets that link specific strategic elements are pseudo-marketers, often with greater influence, lower costs, to customer outcomes and thereby firm performance, theorizing and more effective reach than their firm-based counterparts that the effectiveness of engagement marketing arises from the (Kozinets et al. 2010). This transfer of control to the customer establishment of psychological ownership and self-transforma- can be a significant threat or potential opportunity for firms. tion. The authors provide evidence in support of the derived tenets This has led to an explosion of interest in Bcustomer through case illustrations, as well as a quasi-experimental field engagement,^ which, in the past decade, has gone from a test of the central tenet of engagement marketing. completely unused term (0 hits prior to 2007) to a topic that raises more than 6 million Google search hits. Consequently, firms are devoting substantial resources in an effort to steer . Keywords Customer engagement Marketing strategy customer engagement strategically; often hiring full-time man- . Task-based engagement Experiential engagement agers (e.g., Director of Customer Engagement) (Verhoef et al. Quasi-experiment 2010). For example, Anheuser-Busch is expected to spend more than $200 billion annually on engagement marketing Anne Roggeveen served as Area Editor for this article. strategies, beginning in 2017 (Barris 2015). Yet confusion about the meaning of customer engagement is nearly as ubiq- * Colleen M. Harmeling [email protected] uitous as its use, and research on customer engagement remains scarce and fragmented. The question thus remains, BHow can Jordan W. Moffett firms strategically guide customer engagement in ways that [email protected] benefit their performance?^ Accordingly, the goal of this article Mark J. Arnold is to present an emerging theory of customer engagement mar- [email protected] keting and provide a foundation for the use of customer engage- ment to achieve marketing objectives. Brad D. Carlson [email protected] As a first step, we explicitly delineate customer engagement, a customer outcome, as distinct from customer engagement 1 Florida State University, 821 Academic Way, marketing (henceforward, engagement marketing), which re- Tallahassee, FL 32306-0111, USA fers to a firm’s strategic efforts. Engagement marketing repre- 2 Louisiana State University, 2114D Business Education Complex, sents the firm’s deliberate effort to motivate, empower, and Baton Rouge, LA 70803, USA measure a customer’s voluntary contribution to its marketing 3 Saint Louis University, 3674 Lindell Blvd, Saint Louis, MO 63108, functions, beyond a core, economic transaction (i.e., customer USA engagement). It actively enlists customers to serve as pseudo- J. of the Acad. Mark. Sci. marketers for the firm. Effective engagement marketing can mouth marketing, crowdsourcing, brandfests); we integrate reduce acquisition costs, promote customer-centric product in- these forms to provide a more parsimonious theoretical foun- novations, and enhance post-purchase service quality dation for understanding engagement marketing. (Malthouse et al. 2013; Nambisan 2002). It can provide a Second, we develop a conceptual model and identify two means to monitor behaviors outside the core transaction, to tenets, with corresponding propositions, that capture the the- capture a more holistic view of the customer and more accurate oretical essence of how engagement marketing affects partic- measures of customer value (Kumar 2013), as well as enhanc- ipating customers. Engagement marketing has a twofold in- ing customer satisfaction, loyalty, and, ultimately, firm perfor- fluence on long-term customer engagement (beyond partici- mance (Ranjan and Read 2016;Rappetal.2013). pation in the initial initiative). First, engagement marketing This research takes several steps to provide a foundation can enhance the experience of the core offering, a key driver for engagement marketing. We review marketing literature of customer engagement, by strengthening existing psycho- and detail various explicit or implicit meanings of customer logical connections to the core offering (e.g., task-based) and engagement, to distill the essence of this foundational con- by building new, diverse connections (e.g., experiential). struct as a customer’s voluntary contributions to a firm’smar- Second, both task-based and experiential engagement initia- keting functions. Implicit in this conceptualization of custom- tives can drive long-term customer engagement by er engagement is the idea that customers have something of transforming the customer’s perception of the self in relation value to add to the firm, beyond their financial patronage, so to the firm. Thus, engagement marketing can drive long-term we present a defense of four customer-owned resources—net- customer engagement through transformation of the experi- work assets, persuasion capital, knowledge stores, and crea- ence of the core offering and customer self-transformation. tivity—that underlie engagement marketing. Then, building Third, we provide illustrative cases to support our pro- on the foundational understanding of customer engagement, posed tenets, along with a preliminary empirical test of our we define engagement marketing. Next, we present a concep- conceptual model. Because the long-term success of an tual model to position engagement marketing in a nomologi- engagement marketing initiative is predicated on its ability cal network and identify two paths through which engagement to transform the customer from a passive receiver of the marketing drives long-term customer engagement. We use this firm’s marketing offering to an active contributor to the model to derive tenets for employing engagement marketing firm’s marketing functions, a successful initiative should to achieve firm objectives, as well as advance research in the facilitate this self-transformation. We test this foundational domain. Empirical tests of each tenet are beyond the scope of prediction with a quasi-experimental field study in which this article, but we provide some illustrative business cases we investigate the effects of an engagement initiative on and a quasi-experimental field test of the proposed founda- customer engagement. It reveals that experiential engage- tions. Finally, we outline research directions that emerge from ment initiatives facilitate the transformation of the partici- this newly proposed theory of engagement marketing. pating customer’s perception of self, which in turn in- With these efforts, our research makes several key contri- creases customer engagement. butions. First, we distill the essence of customer engagement to provide a foundation for examining engagement marketing. We identify its universal characteristics, differentiate it from Theoretical assessment of customer engagement other marketing strategies, and offer a descriptive typology of marketing two types of engagement marketing (task-based and experien- tial). All engagement marketing shifts control over some as- A frenzy of rapid growth and creative energy has marked pect of a firm’s marketing functions, from the firm to the recent research on customer engagement (Bowden 2009; customer, and depends on the firm’s ability to identify and Kumar 2013;VanDoornetal.2010; Vivek et al. 2012), gen- leverage customer-owned resources (network assets, knowl- erating a significant amount of knowledge but also consider- edge stores, persuasion capital, creativity). Task-based en- able variation in the definitions, concepts, and arguments used gagement initiatives go beyond the economic transaction to examine the construct. This variation can become problem- and use structured, and often incentivized, tasks to guide cus- atic. Without definitional precision, operationalization and dif- tomers’ voluntary contributions to marketing functions (e.g., ferentiation from other marketing constructs is arduous or im- write a review, refer a customer, provide support to other cus- possible. Replicating findings is difficult and contradictory tomers). Experiential engagement initiatives instead reflect the findings are inevitable making theory testing challenging firm’s attempts to drive pleasurable experiences with cus- and hindering the development of the domain. Thus, these tomers outside the core transaction, such that these events foundational constructs must be Bnarrow enough to strip away motivate voluntary, autonomous customer contributions. unintended connotations and surplus meaning but … concep- Extant literature typically theorizes about
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