Abstract
Relationship marketing managers around the world actively try to stimulate customer engagement because of its performance-enhancing effects. Research insights into how to engage customers, such that they voluntarily contribute their resources to support companies’ marketing efforts, almost exclusively pertain to individual, domestic markets. However, the prerequisites of customer engagement strategies naturally differ across country-specific market environments. Therefore, the authors develop a conceptual, comprehensive battery of cultural, institutional, societal, and economic country-level contingency factors (CISE indicators) as well as between-country psychic distances on those indicators. A set of 11 high-level research propositions aims to enhance marketing researchers’ and managers’ understanding of the contingencies of international customer engagement strategy effectiveness and customer engagement's performance ramifications. The analysis reflects the richness and complexity of potential contingency effects across the four CISE categories and encourages empirical research on their separate and joint effects.
Keywords
Stimulating customer engagement—such that customers voluntarily contribute their resources to support the firm's marketing function, beyond financial patronage (Harmeling et al. 2017)—has evolved as a global goal for relationship marketing researchers and managers (Hollebeek, Srivastava, and Chen 2019; Kumar 2013; Verhoef, Reinartz, and Krafft 2010). The drugstore chain Walgreens aims to convince customers to share their habits, such as walking, running, and weight loss efforts, by offering rewards and encouraging customers to link the retail brand with their health (Conner 2014; CrowdTwist 2016). In its search for great new ideas, LEGO's Ideas Program (https://ideas.lego.com/) organizes frequent, themed contests (Bilkova 2014) that span four stages (idea intake, expert review, crowd vote, winner announcement) and offer winners premium LEGO sets and recognition for their contributions. The e-commerce provider Mobile Taobao uses a comprehensive engagement ecosystem of various features (e.g., social commerce community, Q&A, live broadcast, newsfeed, local marketplace) to maintain constant contact with its customers and keep them active on the app (Alizila 2016). Table 1 illustrates other examples of customer engagement campaigns from China, Germany, and the United States.
Case Examples Illustrating Companies' Customer Engagement Initiatives in Chinese, German, and American Markets.
In addition to these examples, empirical evidence has established the positive effects of customer engagement on customer lifetime value and firm performance (Kumar and Pansari 2016; Meire et al. 2019; Van Heerde, Dinner, and Neslin 2019), mostly in studies that focus on specific domestic markets. But international differences in customers’ perceptions of and responses to firms’ engagement initiatives, as well as in the downstream consequences of customer engagement, seem highly likely. When attempting to engage customers through social media content, for example, managers should use caution to not be misled by social media's global appeal because “what works well on Facebook in the United States can fall on deaf ears on Weibo in China and vice versa” (Future. Customer. 2018). Consider different perceptions of content imagery, in which white is associated with cleanliness, purity, and marriage in Western cultures but is a color of mourning in Asian cultures (Davies 2021). Depending on the characteristics of the target market, local adaptation, rather than global standardization, may be key to creating the intended engagement environment for customers. Such decisions affect how the foreign company is perceived by local customers.
The role of national culture emerges as relevant in research that considers potential boundary conditions on customer engagement. For example, Hollebeek (2018) proposes that customer-focused antecedents, such as customers’ motivationally driven dispositions toward engagement or engagement styles, likely vary with local cultural values. Gupta, Pansari, and Kumar (2018) also anticipate that company-related antecedents, such as proactive engagement initiatives, may vary in effectiveness, depending on which cultural dimensions are prevalent in a country. The likelihood that such contingencies exert effects also seems obvious because prior research identifies culture as a relevant influence in international marketing performance (Samaha, Beck, and Palmatier 2014; Tung and Verbeke 2010). But culture represents one, and not necessarily the most important, contingency factor that should inform understanding of cross-national differences in the effectiveness of marketing phenomena (Berry, Guillén, and Zhou 2010; Kozlenkova et al. 2021). Therefore, we take a broader view and propose a comprehensive battery of international, country-level customer engagement contingency factors that encompasses cultural, institutional, societal, and economic (CISE) indicators. In turn, we derive an inventory of propositions pertaining to how these CISE indicators inform customer engagement on an international scale.
We start with a systematic review of prior customer engagement research, including existing definitions of the customer engagement construct and a newly developed typology of customer engagement behaviors. We synthesize empirical findings pertaining to how customer engagement initiatives affect customer engagement, which then determines customer engagement financial outcomes. Together with this summary, we identify some pertinent research gaps related to international insights into customer engagement management. Next, by taking an international perspective on customer engagement, we purposefully go beyond the role of culture in general and Hofstede's (1980, 2001) cultural dimensions to establish an expansive, comprehensive battery of 17 country-level contingency factors that represent 4 key categories (cultural, institutional, societal, economic; the CISE indicators). In addition, between-country psychic distance on one or several CISE indicators acts as an overarching contingency factor. The proposed CISE framework advances understanding of international customer engagement, and it may also apply to various international marketing phenomena, with appropriate adjustments. Finally, we apply the CISE indicators as contingency factors to the conceptual framework and thereby develop an inventory of 11 research propositions. These propositions suggest fruitful avenues for further empirical investigation.
Customer Engagement in Extant Research
The concept of customer engagement has been discussed extensively in marketing literature (Brodie et al. 2011; Harmeling et al. 2017; Vivek, Beatty, and Morgan 2012). In this section, we define customer engagement, conceptualize a typology of customer engagement behaviors, synthesize extant empirical research on these customer engagement types according to the conceptual framework we propose in Figure 1, and discuss research gaps related to companies’ engagement strategies across international markets.
A conceptual framework of customer engagement contingencies in international markets.
Conceptualization
As the research field matures, the unique perspectives on and diverse conceptualizations of customer engagement put forth in early engagement research converge (Harmeling et al. 2017). Specifically, important debates have evolved around whether customer engagement represents a behavioral or psychological construct (Hollebeek 2011; Jaakkola and Alexander 2014) and whether engagement behaviors include customer behaviors related to the core transaction (Beckers, Van Doorn, and Verhoef 2018; Harmeling et al. 2017).
First, several researchers emphasize customer engagement's strong psychological foundation and conceptualize engagement as a “psychological state” (Brodie et al. 2011, p. 9), a “state of mind” (Hollebeek 2011, p. 790), or an “attitude” (Kumar and Pansari 2016, p. 2). Notably, however, a majority of those psychologically oriented definitions are multidimensional in nature and also include behavioral components, such as customers’ deliberate resource investments or cocreative interactions and activities with firms (Brodie et al. 2011; Hollebeek 2011; Hollebeek, Srivastava, and Chen 2019). Other researchers take a purely behavioral perspective and define customer engagement as “behavior through which customers make voluntary resource contributions that … go beyond what is fundamental to transactions” (Jaakkola and Alexander 2014, p. 248), “voluntary, discretionary customer behaviors with a firm focus” (Verleye, Gemmel, and Rangarajan 2014, p. 69), or “customer behavioral manifestations toward the brand or firm, beyond purchase” (Van Doorn et al. 2010, p. 253). Narrowing the definition of customer engagement to behaviors may be advantageous (Beckers, Van Doorn, and Verhoef 2018; Harmeling et al. 2017). It does not negate the undoubted relevance of emotional and cognitive processes as drivers of engagement behaviors, but it avoids making the existence of often difficult-to-observe psychological states a necessary condition for customer engagement. Thus, defining customer engagement behaviorally facilitates the phenomenon's unambiguous identifiability and observability.
Second, focusing on behaviors that go beyond the core transaction (i.e., purchase) further enhances conceptual clarity. Some researchers advocate including purchase behavior as the most basic and direct form of customer engagement with a company (Kumar et al. 2010; Kumar and Pansari 2016). Yet, limiting the concept of customer engagement to nontransactional behaviors toward a company, as emphasized across several definitions (Jaakkola and Alexander 2014; Van Doorn et al. 2010; Vivek, Beatty, and Morgan 2012), has the advantage of making customer engagement distinct from behavioral loyalty (i.e., repeat purchases). This focus enables the identification of the unique performance ramifications of nontransactional customer behaviors for customer acquisition, expansion, retention, or product innovation, which jointly captures firms’ marketing function (Beckers, Van Doorn, and Verhoef 2018; Harmeling et al. 2017).
Acknowledging these consolidations in extant literature, we adopt Harmeling et al.'s (2017, p. 316) definition of “customer engagement” as “a customer's voluntary resource contribution to a firm's marketing function, going beyond financial patronage.” Extant literature provides various examples of customers’ resource contributions, such as word of mouth, referrals, web postings, reviews, feedback, or idea provision (Jaakkola and Alexander 2014; Kumar and Pansari 2016; Van Doorn et al. 2010). Overall, these resource contributions can be intrinsically (customer-initiated) or extrinsically (company-initiated) motivated (Steinhoff, Witte, and Eggert 2018; Vivek, Beatty, and Morgan 2012) and occur through numerous offline (e.g., face-to-face) and online (e.g., social media) communication channels. 1
Specifically, we can classify customer engagement behaviors into two core dimensions: interaction partner and interaction audience. On the one hand, when engaging, the focal customer's primary interaction partner can be the company (customer-to-company interaction) or other customers (customer-to-customer interaction). On the other hand, the focal customer's interaction audience may be the targeted recipient only (private interaction) or the targeted (or nontargeted) recipient and observers (public interaction). Figure 2 displays our classification of customer engagement behaviors and provides examples for each category. Through these engagement behaviors, customers grant firms access to their unique resources (i.e., their network assets, persuasion capital, knowledge stores, and creativity; Harmeling et al. 2017). Tapping into these customer resources is of major interest to companies to accomplish their objectives and enhance performance (Kozlenkova, Samaha, and Palmatier 2014).
Typology of customer engagement along interaction partner and interaction audience dimensions.
Review of Empirical Research
We synthesize extant, empirical customer engagement research, as summarized in Table 2, that we identified by searching EBSCO, Elsevier ScienceDirect, and Wiley Online Library for three search terms (customer engagement, customer participation, and customer involvement). We obtained 363 articles: 342 empirical articles and 21 conceptual or review articles. When we focus our review on the last decade (publication years 2010–2021), we retain 46 empirical articles and 15 conceptual/review articles from 13 marketing journals. 2 As depicted in Figure 1, we structure extant insights on customer engagement along a customer engagement initiatives → customer engagement → customer engagement financial outcomes chain of effects. Specifically, we first distill research findings that shed light on “customer engagement strategy effectiveness,” or the impact of companies’ customer engagement initiatives on customer engagement behaviors. Then, we examine “customer engagement performance ramifications,” or the impact of customer engagement behaviors on customer engagement financial outcomes. Our review of customer engagement literature identifies articles that analyze customer engagement strategy effectiveness, customer engagement performance ramifications, or the full chain of effects (Table 2).
Select Empirical Customer Engagement Research.
Note: N.A. = not applicable.
Customer engagement strategy effectiveness
Companies employ a variety of initiatives to stimulate engagement among customers in online and offline environments. We conceptualize “customer engagement initiatives” as marketing interventions that “tend to be interactive and elicit participative experiences” (Gill, Sridhar, and Grewal 2017, p. 46) and “primarily seek to build strong, long-term relationships with customers” rather than induce a sale (Beckers, Van Doorn, and Verhoef 2018, p. 368). Companies may employ different types of engagement initiatives to elicit one or more of the specific types of engagement behaviors (i.e., private customer-to-company interactions, private customer-to-customer interactions, public customer-to-company interactions, or public customer-to-customer interactions).
Several studies investigate customer engagement initiates aimed at stimulating private customer-to-company interactions. For example, the presence of certain knowledge management capabilities enables companies to effectively engage their customers as information sources, codevelopers, and innovators in new product development (Cui and Wu 2016). Specifically, a market exploitation strategy and interfunctional coordination in the company positively affect customer engagement as information sources and codevelopers; firms’ strategic flexibility enhances customer engagement as innovators. Examining customer engagement behaviors in a health care context (i.e., nursing homes), Verleye, Gemmel, and Rangarajan (2014) establish organizational socialization and support from other customers as drivers of focal customers’ (i.e., family members of nursing home residents) role readiness, which then fosters customer engagement behaviors in interactions with the organization and its employees (compliance, cooperation, feedback).
A second research stream investigates engagement initiatives’ potential to stimulate private customer-to-customer interactions. Customer referral programs have been established as an effective tool for stimulating word of mouth (i.e., encouraging customers to recommend the firm to other potential customers) (Garnefeld et al. 2013; Schmitt, Skiera, and Van den Bulte 2011). Specifically, customers’ referral likelihood increases when rewards are provided through the referral program, especially when recommending to weak ties and advocating weaker brands (Ryu and Feick 2007). Reward distribution between the sender and receiver of the referral also matters, such that, for weak ties and weaker brands, it is essential to provide the sender with a reward; for strong ties and stronger brands, it is more effective to give at least part of the reward to the receiver. Experiential events may also act as engagement-enhancing experiences for customers. For example, Harmeling et al. (2017) show how a firm effectively uses sponsorship of a community running event to activate customer self-transformation and thus word-of-mouth behavior. In health care, organizational support and overall service quality toward nursing home residents as well as organizational socialization and support from other customers positively influence word of mouth and helping behaviors of residents’ family members (Verleye, Gemmel, and Rangarajan 2014).
A third and extensive stream of research focuses on engagement initiatives through social media. Through these initiatives, companies aim to simultaneously augment public customer-to-company interactions and public customer-to-customer interactions. In practice, an initiative may naturally encourage focal customers to simultaneously interact with the company (e.g., liking and commenting on company-generated social media content) and other customers (e.g., sharing the content or talking about it in consumer-generated brand communities), given social media platforms’ typical functionalities (Pezzuti, Leonhardt, and Warren 2021; Schivinski, Christodoulides, and Dabrowski 2016). Thus, while conceptually distinct, customer-to-company and customer-to-customer interactions in public spheres, such as social media, often occur together and are also often studied together in extant research.
To drive customer engagement, companies need to thoughtfully design the content of their initiatives. Given differential perceptions of authenticity, entertaining initiatives enhance customer engagement for warm brands but are detrimental for competent brands (Eigenraam, Eelen, and Verlegh 2021). Informative initiatives, in turn, are equally effective for warm and competent brands. Posts that include informational or rational content exert a negative (positive) effect on the number of likes (number of comments), and both effects are diminished for photo posts rather than video posts (Shahbaznezhad, Dolan, and Rashidirad 2021). Companies may also generate social media content to effectively accompany and augment offline experiential events. Specifically, firms can impact the sentiment of customers’ social media engagement in response to experiential events beyond their objective performance during these events (e.g., sport games). For favorable (unfavorable) event outcomes, emotional (informational) company-generated content augments the valence of customers’ social media posts (Meire et al. 2019). The effectiveness of engagement initiatives is also contingent on the type of product. For luxury brands, customers exhibit increased engagement toward social media content that emphasizes entertainment, interaction, and trendiness, but content that focuses on customization does not drive customer engagement (Liu, Shin, and Burns 2021).
Beyond the broader initiative content, companies should pay careful attention to the wording of their social media messages, such that posts that include words associated with certainty (e.g., always, everything, forever) signal powerfulness of the brand and lead to increased levels of customer engagement (likes, comments, shares) (Pezzuti, Leonhardt, and Warren 2021). Accompanying social media content with visual appeals also affects engagement behaviors. Specifically, images foster customer engagement when they trigger high positive and low negative arousal (Rietveld et al. 2020). Although video posts enhance commenting behaviors (active engagement), photo posts increase liking behaviors (passive engagement) (Shahbaznezhad, Dolan, and Rashidirad 2021). Likewise, implementing live streaming services can help companies drive customers’ engagement (Wongkitrungrueng and Assarut 2020).
Initial empirical research efforts to understand international contingencies of customers’ social media engagement investigate the role of national culture. Specifically, Mattison Thompson and Brouthers (2021) identify high individualism and power distance as drivers (impediments) of self-focused content clicking behaviors (other-involving content sharing behaviors). By contrast, masculinity and uncertainty avoidance decrease clicking but promote sharing behaviors. Against their theoretical presumptions, Kitirattarkarn, Araujo, and Neijens (2019) find that customers’ intentions to comment on and share fellow customers’ entertaining and socially interactive brand-related social media content are higher in individualistic rather than collectivistic cultures.
Beyond these proactive efforts to engage customers, companies’ reactive engagement strategies in public online environments matter. For example, Schamari and Schaefers (2015) show that firms’ webcare (i.e., responding to customer feedback on online platforms) enhances engagement intentions for customers who observe the interaction. The effect is particularly pronounced on consumer-generated rather than brand-generated platforms and when the company offers personal webcare. Overall, companies’ responsiveness toward customer feedback (response volume, speed, and length) positively impacts the future review volume generated by customers (Sheng 2019).
Another stream of research puts forth gamification, defined as the usage of game elements in nongame contexts (Deterding 2012; Eisingerich et al. 2019), as a potential promising element of customer engagement initiatives. Highly interactive and optimally challenging gamified interactions provide customers with flow experiences, which augment customer engagement (Berger et al. 2018). The engagement-enhancing effect of gamification is driven by several underlying principles (i.e., social interaction, sense of control, goals, progress tracking, rewards, prompts; Eisingerich et al. 2019) and benefits for customers (i.e., epistemic, social integrative, personal integrative; Jang, Kitchen, and Kim 2018). Game elements often employed in online communities include reputation signals that reward users for their contributions to the community and assign roles to them (Dellarocas 2010; Hanson, Jiang, and Dahl 2019). Such reputation signals may include points (i.e., numerical displays of the quantity or quality of a customer's contributions), labels (i.e., descriptive categories specifying a customer's hierarchical level within the community), and badges (i.e., descriptive categories displaying a customer's specific achievements or skills). Reputation signals that convey higher levels of social role clarity (labels, badges), which provide information about a customer's expected behavior within the community, spark greater community engagement (i.e., creating discussions, posting comments, and future engagement intentions) than signals that are less effective in establishing role clarity (points) (Hanson, Jiang, and Dahl 2019).
Customer engagement performance ramifications
Customer engagement behaviors have been conceptually proposed to lead to favorable financial performance outcomes for companies (Pansari and Kumar 2017; Van Doorn et al. 2010). “Customer engagement financial outcomes” encompass customer-level (e.g., sales) and company-level (e.g., profits) indicators of financial performance (Gill, Sridhar, and Grewal 2017; Kumar and Pansari 2016). In fact, extant empirical research has established positive impacts of the different types of customer engagement on customer- and firm-level financial outcomes.
First, several extant studies find support for a positive impact of different manifestations of private customer-to-company interactions on financial performance indicators. Specifically, customers’ sharing of information and knowledge leads to increased levels of profitability (Auh et al. 2019; Kumar and Pansari 2016) and enhances new product performance (Cui and Wu 2016). In addition, customers’ participation in a company’s proprietary web panel, and thus their provision of feedback to the firm, increases their number of purchases, cross-buying, and profitability (Allen, Dholakia, and Basuroy 2016). Engaging with a firm's mobile app positively affects customers’ purchase incidence (Van Heerde, Dinner, and Neslin 2019), purchase quantity (Jang, Kitchen, and Kim 2018), and revenues (Eisingerich et al. 2019; Jang, Kitchen, and Kim 2018; Van Heerde, Dinner, and Neslin 2019). Notably, mobile engagement stimulates sales not only in the focal mobile channel but also across the full range of in-store, online, and mobile channels (Van Heerde, Dinner, and Neslin 2019).
Second, private customer-to-customer interactions enhance company financial performance through two complementary mechanisms. Specifically, on the one hand, word-of-mouth behavior (e.g., through participation in customer referral programs) positively affects firm performance by facilitating new customer acquisition (Wangenheim and Bayón 2007). In fact, new customers acquired through referral programs exhibit higher contribution margins, retention rates, and value to the firm than nonreferred customers (Schmitt, Skiera, and Van den Bulte 2011). On the other hand, recommending the company to other customers positively impacts referring customers’ retention and revenues (Garnefeld et al. 2013).
Third, engaging customers on social media may also pay off for companies because both public customer-to-company interactions and public customer-to-customer interactions have the potential to augment financial performance. On social media, customers’ posting of content exerts positive impacts on the acquisition of new and retention of existing customers (Ho et al. 2020) and financial performance (Ho et al. 2020; Wang and Kim 2017). The sentiment of customers’ social media posts positively relates to purchase incidence (Meire et al. 2019). Overall, compared with research on the effectiveness of private customer engagement, research on the performance ramifications of public customer engagement behaviors is still in an early stage.
Yet, companies’ launch of customer engagement initiatives may not necessarily spark positive reactions among shareholders, likely because of the potential risk of initiative failure. On average, Beckers, Van Doorn, and Verhoef (2018) identify a negative impact on shareholder value of companies’ engagement initiative announcements. However, the effect is contingent on the initiative’s design. Specifically, initiatives to solicit word of mouth (customer-to-customer interactions) show higher returns than initiatives to stimulate customer feedback (customer-to-company interactions), because word-of-mouth initiatives increase the potential to acquire new customers. In addition, returns are higher for initiatives accompanied by social media communications (public interactions), which further underscores social media's relevance in customer engagement strategies.
Research Gaps
In recent years, customer engagement has spurred vast interest among marketing managers and academics. Globally, companies are seeking insights into how to engage customers and how to reap engagement's performance-enhancing effects. Our review of the literature reveals rich insights on customer engagement strategy effectiveness and performance ramifications, but crucial research gaps regarding customer engagement in international markets remain. Although several customer engagement thought leaders (e.g., Gupta, Pansari, and Kumar 2018; Hollebeek 2018) emphasize the relevance of a cross-national perspective, empirical findings are limited (Kitirattarkarn, Araujo, and Neijens 2019; Mattison Thompson and Brouthers 2021). Extant engagement research has been conducted in various countries, yet most studies limit their investigation to one specific domestic market (Table 2). While some authors collect data from different countries, they conduct their analyses on an aggregate level and do not examine potential international differences in customer engagement strategy effectiveness and performance ramifications. In turn, the few notable empirical research efforts that do investigate engagement's international contingencies exclusively focus on Hofstede's (1980, 2001) cultural dimensions.
From these observations, we derive three research gaps that should be addressed to enhance our understanding of customer engagement in international markets and thus provide guidance to international marketing managers. First, research is needed on customer engagement strategy effectiveness. The impact of customer engagement initiatives on actual customer engagement behavior supposedly varies across international markets. Thus, an engagement initiative that works effectively in one country may backfire in another country, such that international customers differentially respond to a given initiative. Because of the global reach of several leading social media platforms (e.g., Facebook, Twitter, Instagram, YouTube), for example, companies need to carefully consider whether to use a globally standardized or locally adapted approach to interact with and engage their international customers, which is similar to the choice of product standardization versus adaptation when entering a foreign market (Krautz and Hoffmann 2017; Westjohn and Magnusson 2017). In addition, customer-to-customer interactions may differ depending on whether the company maintains one global online community or dedicated country communities. Further, customers in different domestic markets may be differentially responsive toward specific customer engagement initiatives. For example, interacting with social media influencers (i.e., key opinion leaders) and their product recommendations is much more popular among Chinese customers than European customers (Yuzu Kyodai 2020).
Second, academic research needs to generate insights on customer engagement performance ramifications, such that translations of customer engagement behaviors into favorable performance outcomes for companies may differ across international markets. Thus, the impact of relational interactions on relationship performance depends on the importance and appreciation assigned to strong relational bonds within a country (Samaha, Beck, and Palmatier 2014). Although customers in some countries perceive their engagement behaviors as considerable investments into a long-term, reciprocal relationship that is worth maintaining with the company (e.g., the concept of guanxi in China; Lee and Dawes 2005), customers in other countries take a more superficial, loose approach to engagement and do not feel any normative pressures to subsequently act loyally toward the focal firm.
Third, although culture represents a promising point of departure to investigate customer engagement in international markets, we promote a broader perspective to holistically shed light on international customer engagement (Berry, Guillén, and Zhou 2010; Kozlenkova et al. 2021). Beyond national culture, which captures a country’s prevailing norms, customs, and beliefs, we argue that customers and their engagement behaviors may also be affected by facets of their country’s institutional, societal, or economic environment. In the following, we interweave all three research gaps. Specifically, we build a comprehensive battery of potentially important cultural, institutional, societal, and economic contingency factors and derive propositions on how these factors may inform international customer engagement strategy effectiveness and performance ramifications.
An International Perspective on Customer Engagement
Most extant customer engagement research involves specific domestic markets, but the importance of an international perspective on customer engagement is clear (Christofi et al. 2018; Gupta, Pansari, and Kumar 2018; Hollebeek 2018; Kumar et al. 2019). A rich body of international business and marketing literature conceptually posits and empirically demonstrates how the unique characteristics of different national markets contribute to the differential effectiveness of marketing strategies (Burgess and Steenkamp 2006; Kozlenkova et al. 2021). For example, Samaha, Beck, and Palmatier’s (2014) meta-analysis of international relationship marketing reveals that the effectiveness of customer–company relationships for increasing business performance is contingent on a country's culture, such that it is much higher outside the United States and even 55% more effective, on average, in the BRIC countries (Brazil, Russia, India, and China). A few notable studies that examine the effectiveness of customer engagement as an important relationship marketing construct across countries rely on Hofstede's cultural dimensions (Gupta, Pansari, and Kumar 2018; Hollebeek 2018; Mattison Thompson and Brouthers 2021). In line with international business research (Berry, Guillén, and Zhou 2010; Kozlenkova et al. 2021; Tung and Verbeke 2010), however, we argue for a broader perspective on the cross-national performance ramifications of customer engagement. Therefore, we propose a comprehensive battery of 17 country-level contingency factors, representing 4 key categories that may affect customer engagement strategy effectiveness and performance ramifications: cultural indicators, institutional indicators, societal indicators, and economic indicators, which we refer to as CISE indicators. In addition, psychic distance represents an overarching, comparative between-country indicator. Figure 1 displays the indicators in each category, and Table 3 contains detailed explanations of each indicator.
CISE Indicators: International Customer Engagement Contingency Factors.
Cultural Indicators
Cultural indicators describe a country’s prevalent social norms and general customs and beliefs. Three cultural indicators likely represent relevant contingency factors for international customer engagement. As the most widely applied cultural value framework, Hofstede's cultural dimensions (Kirkman, Lowe, and Gibson 2006; Tung and Verbeke 2010) exert extensive influence. Hofstede's (1980, 2001) framework consists of six dimensions: individualism, uncertainty avoidance, power distance, masculinity, long-term orientation, and indulgence. In addition to being extensively used in international marketing research (Griffith, Cavusgil, and Xu 2008), Hofstede's cultural dimensions reveal important contingency effects in early studies of international customer engagement (Gupta, Pansari, and Kumar 2018; Hollebeek 2018).
Schwartz’s (1992, 1994) cultural values framework is an alternative approach to describing a country's culture. This theory-based framework establishes seven cultural value orientations (intellectual autonomy, affective autonomy, embeddedness, egalitarianism, hierarchy, harmony, and mastery) that reflect how the culture relates to significant societal phenomena. These cultural values may inform customer engagement strategy effectiveness and performance ramifications for a specific national market.
Finally, customers’ perceptions of the extent to which global foreign companies “skillfully and tactfully take account of local consumers’ feelings about local traditions, symbols, and cultural heritage” (Guo, Heinberg, and Zou 2019, pp. 85–86) can be captured by the cultural respect construct. Exhibiting high levels of cultural respect, as a foreign company, should help the firm succeed in a different national market (Guo, Heinberg, and Zou 2019).
Institutional Indicators
Institutional indicators refer to the country's regulatory and political environment, which embeds any customer engagement strategies. We propose four relevant institutional indicators. Countries can be described according to their state of democracy, which is determined by the prevalence of democratic principles or processes (The Economist Intelligence Unit 2021). A democracy index classifies a country as one of four types of regimes: full democracy, flawed democracy, hybrid regime, or authoritarian regime. A country's overall index is based on evaluations of its electoral process and pluralism, the functioning of the government, political participation, political culture, and civil liberties.
In light of digital transformations and the exponential growth of data produced and collected by each internet user, a country's stance on internet privacy and its regulatory protections also represents an important institutional characteristic (Martin et al. 2020). An index value that captures how hard a country works to protect internet users’ privacy is derived through an evaluation of the country's press freedom, data privacy laws, democracy statistics, freedom of opinion and expression, and cybercrime legislation.
Rooted in institutional theory, measures of the quality of the institutional environment capture perceptions of a set of conventions within a country that drive people's behavior when they interact with others (Orr and Scott 2008; Scott 2013). Three pillars (regulatory, normative, and cognitive) characterize a country's institutional environment (Gäthke, Gelbrich, and Chen 2022; Scott 2013). Regulations set rules and laws that define what must (not) be done. Norms capture values about what should (not) be done. Finally, cognitions reflect a group's shared understanding of what is normally (not) done.
Institutional trust is the consensus in people's preferences (i.e., interpretation of what is or is not right and fair) and the perceived functioning of the government (Bouckaert and Van de Walle 2003; Organisation for Economic Co-operation and Development [OECD] 2017). That is, institutional trust comprises two components, which are composed of two and three dimensions, respectively. First, competence describes a government’s ability to deliver services citizens need at the quality level they expect, so the key dimensions are responsiveness and reliability. Second, values encompass the drivers and principles that inform and guide government action, which is judged on the dimensions of integrity, openness, and fairness.
Societal Indicators
Societal indicators describe a community’s (i.e., a country) collective attitudes toward life and the community’s social composition, which shapes community members’ interactions. We suggest six such indicators that may affect customer engagement strategy effectiveness and performance ramifications. First, the happiness of a country’s population, which reflects people's evaluations of their current lives (Helliwell et al. 2021), varies. Six prominent determinants of happiness, as identified in prior research, are gross domestic product (GDP) per capita, social support, healthy life expectancy, freedom to make life choices, generosity, and perceptions of corruption (Helliwell et al. 2021). Second, a social progress index compiles evaluations of whether basic human needs, foundations for well-being, and opportunity exist within a society (https://www.socialprogress.org/). The first dimension, basic human needs, is evaluated according to residents’ access to nutrition, basic medical care, water and sanitation, shelter, and personal safety. The foundations of well-being factor pertains to access to basic knowledge, information, communications, health, wellness, and environmental quality. Opportunity, the third dimension, involves personal rights, personal freedom and choice, inclusiveness, and access to advanced education.
Third, according to the OECD (2017, p. 42), generalized trust is people's “belief that another person … will act consistently with their expectations of positive [behavior],” and is measured as people’s judgment of whether most other people can be trusted. Generalized trust captures people's confidence in others and thus their perceived need to protect themselves against safety risks or negative experiences. Fourth, social inequality is defined as the extent to which resources (e.g., income or wealth, education, health) or access to these resources are distributed unevenly among a country's population (Sernau 2019). When social inequality is high, assets are unequally distributed, such that a small (large) proportion of the population possesses a large (small) amount of resources. A well-established indicator of social inequality is the Gini coefficient, which measures the statistical dispersion of a particular resource in a population (OECD 2022).
Fifth, technology readiness describes the state of information and communication technology (ICT). An ICT Development Index characterizes countries over time according to ICT access, use, and skills (United Nations International Telecommunication Union 2021b). Sixth, the demographic indicator of population age affects the fabric of a society because the preferences of certain age groups can determine which needs are prioritized. Population age is typically determined according to the percentage of the total population under 14 years versus over 65 years of age, life expectancy, and birth rates in a country (Whitley 1992).
Economic Indicators
Economic indicators characterize a country's economy and competitive position along a variety of attributes, We identify four attributes that may inform understanding of cross-national customer engagement effects. Economic growth implies increases in the production of goods and services over a specific period, and it is indicative of a country's entire economic output. A country's service ratio reflects the share of the (tertiary) service sector in the overall distribution of GDP across economic sectors. A high service ratio is typical of developed economies (United Nations Conference on Trade and Development 2020). Global competitiveness is a composite assessment of a country's competitive capabilities relative to other countries. This measure combines statistical and survey data obtained from business executives that accounts for two-thirds and one-third, respectively, of the input to the global evaluation (IMD World Competitiveness Online 2021). Similarly, global innovativeness is a composite measure of a country’s innovation capabilities. The index is updated annually by INSEAD, Cornell University, and the United Nations World Organization of Intellectual Property (Cornell University, INSEAD, and WIPO 2020).
Between-Country Differences in Cultural, Institutional, Societal, and Economic Indicators
In addition to the descriptive indicators of cultural, institutional, societal, and economic contingency factors, which assign each country certain values that can be compared internationally, we include an overarching measure of the perceived distance between two countries that explicitly involves a cross-country comparison. Psychic distance is the perceived difference between a person's home country and a foreign country (Sousa and Bradley 2006). The measure captures local customers’ perceptions of the differences between their country and the foreign company's country of origin with regard to cultural (e.g., cultural values), institutional (e.g., legal regulations), societal (e.g., attitudes), and economic (e.g., economic development) indicators (Dow and Karunaratna 2006; Sousa and Lages 2011).
A Propositional Inventory of International Customer Engagement Contingencies
Customer engagement is of global appeal to companies and customers. To help researchers and managers understand and implement effective international customer engagement initiatives, we develop a comprehensive framework by interweaving insights from extant customer engagement research with the CISE indicators, which we predict may affect engagement strategy effectiveness and performance ramifications across countries and markets. To this end, we propose an inventory of high-level research propositions related to the country-level contingencies of the customer engagement initiatives → customer engagement → customer engagement financial outcomes chain, as displayed in Table 4.
Customer Engagement in International Markets: Research Propositions.
Cultural Indicators as Contingency Factors
Because cultural factors capture a country’s prevalent social norms, they have notable contingency effects for international marketing (Gupta, Pansari, and Kumar 2018; Samaha, Beck, and Palmatier 2014; Tung and Verbeke 2010). Hofstede's (1980, 2001) cultural dimensions could effectively reinforce or impede the customer engagement initiatives → customer engagement → customer engagement financial outcomes chain, such that high levels of individualism and masculinity may hinder the formation and performance ramifications of customer relationships, whereas power distance and uncertainty avoidance may facilitate them (Samaha, Beck, and Palmatier 2014). A more differentiated picture also emerges from distinguishing two types of potential public customer engagement behaviors: customer-to-company interactions (e.g., self-focused content clicking) and customer-to-customer interactions (e.g., other-involving content sharing) (Mattison Thompson and Brouthers 2021). High individualism and power distance likely increase clicking but decrease sharing behaviors because, in such cultures, self-interest and personal experiences are priorities (Hofstede, Jonker, and Verwaart 2008), whereas they likely evoke less interest in communal experiences and greater distrust of others (Dawar, Parker, and Price 1996). Masculinity and uncertainty avoidance may reduce clicking but foster sharing behaviors, which enable self-presentation, self-disclosure, and self-reassurance (Taylor, Strutton, and Thompson 2012; Wasko and Faraj 2005). Similarly, contingency effects may be linked to long-term orientation and indulgence dimensions, such that low levels of long-term orientation and high levels of indulgence may promote engagement in fun, game-like experiences with the firm.
Similarly, a country's fabric, as reflected by the three dimensions (autonomy [affective and intellectual] vs. embeddedness, egalitarianism vs. hierarchy, harmony vs. mastery) in Schwartz's (2006) cultural value orientations, may affect the success of customer engagement strategies. For example, a cultural emphasis on embeddedness, egalitarianism, and harmony may enhance the influences of engagement initiatives on engagement behaviors directed to other customers (customer-to-customer interactions), which then drive performance. A focus on autonomy, hierarchy, and mastery may make self-focused engagement (customer-to-company interactions) easier to stimulate and enhance its performance impacts.
The impact of customer engagement initiatives on engagement behaviors and the downstream consequences in international contexts also may differ according to perceptions of a foreign company and its cultural origins. Customers’ perceptions of the extent of cultural respect a foreign company displays when approaching the local market may affect their responsiveness to engagement initiatives and the transformation of engagement into strong relational bonds (Guo, Heinberg, and Zou 2019). By showing cultural respect for the local market, a foreign company can leverage engagement initiatives to achieve customer engagement. Customers may perceive companies from a different country as out-group members (Simon and Schaefer 2018), so they may be less willing to interact with those companies. But if the foreign company emphasizes its cultural respect by acknowledging local traditions, symbols, and cultural heritage, customers start to think about the company as part of a common in-group (Simon, Mommert, and Renger 2015), which should facilitate companies’ engagement efforts and enhance engagement strategy effectiveness. If customers judge a foreign company as culturally respectful, their interest in a long-term relationship with the firm may increase, prompting greater performance impacts of customer engagement. Displaying low cultural respect should have detrimental effects for customer engagement strategy effectiveness and performance ramifications.
Institutional Indicators as Contingency Factors
Institutional indicators determine both factual and perceived regulatory environments in a domestic market, which may influence customer engagement in different ways. Democracies feature several defining characteristics (e.g., sovereignty of the people, rule of law, pluralism, freedom of opinion and speech) that are conducive to implementing and benefiting from customer engagement. In a democratic environment, people trust in their right and ability to speak up, not only as citizens of the country but also as customers in a business context. This mindset especially supports customer engagement behaviors in public spheres (i.e., on social media) because customers freely express diverse opinions and attitudes toward companies. In a similar vein, customers’ perceptions of the quality of their institutional environment (Gäthke, Gelbrich, and Chen 2022; Orr and Scott 2008; Scott 2013) and trust in their country’s institutions (Bouckaert and Van de Walle 2003) create a setting in which engaging with firms involves relatively little risk. For example, countries with capable, trusted institutions typically host institutions that govern business exchanges, such as consumer protection regulations. Even if a company's actions are not in line with the business conduct mandated by the country's institutions, customers are confident they will receive regulatory protection and thus sense less risk in dealing with firms—compared with countries featuring low perceived quality and trust in institutions—that should leverage their willingness to engage.
Strong internet privacy regulations may impede companies’ customer engagement strategy effectiveness. First, restrictive data privacy regulations make it harder to implement initiatives based on customer data, including interactions achieved through engagement, especially when customer engagement is supposed to take place in public rather than private settings. Europe's General Data Protection Regulation contains detailed specifications about how firms may collect, use, store, and dispose of customer data (Martin et al. 2020). Compliance with these legal obligations limits companies’ options for designing and rolling out engagement initiatives. Second, in terms of the downstream consequences of customer engagement, strong internet privacy protections may limit engagement's impact on financial performance. Even if companies capture valuable personal data by engaging customers, they may not be able to use the data because of data storage restrictions, for example. Internet privacy protections could become a barrier to engagement and relationship development if companies cannot use all the customer data to build personalized relationships.
Societal Indicators as Contingency Factors
The fabric of a country's society can promote or dampen customer engagement strategy effectiveness and performance ramifications. Happiness, social progress, generalized trust, and technology readiness should accelerate the deployment of customer engagement. In societies featuring high levels of happiness and social progress, people express fewer concerns about fulfilling lower-level needs, such as nutrition, basic medical care, shelter, and personal safety (Maslow 1968; see also https://www.socialprogress.org/). Instead, they can focus on enjoying hedonic, nonexistential aspects of life without fear of existential threats. In such privileged circumstances, customers may enjoy engaging with firms and other customers and grow more interested in the hedonic, fun experiences provided through companies’ engagement initiatives.
Generalized trust among members of a society also encourages engagement; a trusting environment encourages customers to interact with the firm directly (customer-to-company interactions) or participate in experiences with other customers (i.e., customer-to-customer interactions) because they perceive little risk of experiencing hostility in response to their participation (e.g., on social media). Likewise, a trustful environment in which customers and companies interact facilitates the establishment and development of strong relational ties, such that high levels of generalized trust help translate customer engagement into customer purchases and thus financial performance. Given the importance of internet-based channels and technological devices for interacting with customers online, a country's technology readiness is a relevant prerequisite to deploy customer engagement strategies, especially those targeted at online public interactions, to their full potential.
High social inequality in a country can impede customer engagement. Unequal distributions of assets, such that a few people possess a lot of resources and many people possess few resources, heighten social tensions, stress, and status anxiety among the members of a society (Layte 2012). As a result, society may drift apart, and those who own a lot of resources may be hostile toward those with few resources, and vice versa. As evident in some countries today (e.g., United States, Germany) (AICGS 2021; Dimock and Wike 2020), an antagonistic societal atmosphere often surfaces on social media. To avoid unpleasant experiences, many customers may refrain from publicly engaging on social media, thereby excluding a relevant engagement channel and making engagement efforts more difficult.
An older population can be a boon or bane to engagement efforts. On the one hand, it may be harder to achieve engagement among older customers. Many companies’ engagement strategies rely heavily on online channels (Mattison Thompson and Brouthers 2021; Meire et al. 2019), but older customers typically express less openness and aptitude to using these channels and interacting with firms in these public spaces (Goldfarb and Tucker 2013). On the other hand, engagement with older customers (e.g., through private interactions) may strongly affect performance outcomes, given older customers’ reliance on and appreciation of long-term relationships with trusted companies.
Economic Indicators as Contingency Factors
The ease with which companies can deploy customer engagement strategies and then enjoy increased financial performance depends on a country’s economic environment. High economic growth rates are characteristic of developing or emerging, rather than developed, markets. Customer engagement strategies may thrive in such dynamic, booming market settings because customers are excited for new opportunities to interact with companies and other customers. However, fast-growing, developing, and emerging markets often feature above-average poverty rates and high degrees of economic inequality, such that consumers benefit differentially from ongoing market expansion (Kozlenkova et al. 2021). Thus, many customers may still lack access to the tools or channels (e.g., internet access, computer, smartphone) required to interact and engage effectively with firms.
In addition, customer engagement is likely more resonant for services than physical products. Customer engagement strategy effectiveness and performance ramifications should be enhanced in economies that feature higher service ratios, such as in mature markets (e.g., United States), because of the higher perceived risk of consuming services, higher need and opportunity for cocreation, and greater weight assigned to close relationships with companies (Palmatier et al. 2006).
Global competitiveness and global innovativeness should augment customer engagement. Highly competitive countries (e.g., Singapore) dispose of a lot of resources, lead with future-oriented technologies, and attract a highly qualified workforce who make a good living. Such a vibrant environment encourages customer engagement, so customers are interested in the ongoing success of the economy, are demanding of companies, and have the capability to pursue hedonic needs (e.g., by engaging in fun activities with firms). Highly innovative countries also perform well regarding new product development, which creates an ideal habitat for customer engagement initiatives, such as idea contests, that enable customers to cocreate new innovations. However, the demandingness of customers and their broad choices among strong and innovative competitors can restrain the positive impact of customer engagement on performance outcomes; that is, the impact of customer engagement on financial performance may be limited because customers split their engagement across several firms and build stronger relationships with only a few firms.
Between-Country Differences in Cultural, Institutional, Societal, and Economic Indicators as a Contingency Factor
The impact of customer engagement initiatives on engagement behaviors and the downstream consequences in international contexts may be contingent on the absolute characteristics of a target market's country and local customers’ comparative perceptions of the psychic distance between the home country and the foreign company's country of origin (Dow and Karunaratna 2006). A high level of psychic distance in cultural, institutional, societal, or economic characteristics may evoke differential customer reactions depending on the engagement behaviors involved. On the one hand, psychic distance may reduce customers’ willingness to engage in customer-to-company interactions with a foreign company because they believe the company is not “one of them” (i.e., an out-group member; Simon and Schaefer 2018). On the other hand, customers may be more likely to connect with other local customers (i.e., in-group members) to share their thoughts and potential uncertainties about the foreign firm. Thereby, psychic distance may encourage increased customer-to-customer interactions. When customers engage with a firm despite the barrier of a high degree of psychic distance, customer engagement should effectively translate into favorable financial outcomes for the firm as customers consistently act on their engagement. According to dissonance theory, once customers have made a potentially attitude-incongruent commitment (i.e., because of the company’s high perceived psychic distance) through engaging, they tend to align their attitudes and subsequent behaviors with that commitment (Cialdini 2021; Festinger 1957).
Conclusion
Considering its performance-enhancing effects (Kumar and Pansari 2016; Meire et al. 2019), customer engagement is of global appeal to marketing managers. Yet insights on how to deploy and reap the rewards of customer engagement efforts across international markets are scarce (Gupta, Pansari, and Kumar 2018; Hollebeek 2018). We synthesize extant empirical research on customer engagement, mostly conducted in specific domestic markets, to derive a holistic battery of potential country-level contingency factors, including 4 CISE dimensions, 17 country-specific indicators, and 1 comparative between-country indicator. In turn, we put forth an inventory of 11 high-level propositions pertaining to international customer engagement strategy effectiveness and its performance ramifications. Our conceptual analysis suggests a rich, complex set of contingency effects, which can support wide-ranging empirical research efforts.
Beyond the potential value of investigating each stand-alone proposition in (empirical) detail, this research effort opens additional promising avenues for future research on international customer engagement. First, the relevance of the four CISE categories for explaining the differential effectiveness of companies’ customer engagement strategies across countries can be holistically compared. Some indicators appear naturally correlated across categories but others may complement one another in their unique contributions. Second, the CISE indicators can serve as a rich information source when designing specific customer engagement initiatives. Specifically, assessing the CISE properties of a company's target market and the respective (dis)similarities between the target market and the firm's country of origin along the CISE indicators may help managers determine whether a standardization or adaptation approach would be more appropriate when rolling out the initiative across international markets. Third, although extensive, our battery of CISE indicators is not exhaustive. Future research could include additional cultural, institutional, societal, and economic contingency factors or identify additional categories that may be relevant to international customer engagement.
Footnotes
Special Issue Editors
Linda D. Hollebeek, Wafa Hammedi, Sanjit K. Roy, and Kelly Hewett
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Xiaoling Li gratefully acknowledges the support of this work by the Key Project of National Social Science Foundation [grant no.21ZDA026], National Natural Science Foundation of China [grant no.71972021, 71672192], the Humanity and Social Science foundation of Ministry of Education of China [grant no.18XJA630004], the Fundamental Research Funds for the Central Universities [grant no. 2021CDJSKCG20, 2020CDJSK02YJ08], and the Chongqing Talent Funds [grant no. cstc2021ycjh-bgzxm0213].