Is IT Worth IT? Dismantling the Process of Social Media Related Sales Performance

Social media platforms present unique possibilities for companies to interact with their customers and take up a key role in building relationships. A substantial body of research has demonstrated the impact of social media regarding, for example, brand awareness and corporate reputation. However, little is known concerning the financial Return on Investment from social media engagement and specific strategies to leverage it. To this end, the study draws on relationship marketing theory to develop and operationalise a research model, which understands objective firm performance in terms of sales as a result of relationship antecedents (i.e., corporate investment and dyadic similarity) mediated through the customer-perceived relationship strength. To test the assumed research model, we collect and analyse a dataset of over 1.5 million Twitter messages revolving around ten car manufacturers and measure the impact on new car registration volumes. The results of this study suggest that companies can increase their sales volume through greater relationship investment (i.e., by providing interest group-specific information) and by adopting a social media strategy that promotes the users’ relationship satisfaction (i.e., raises the share of voice within user messages).