The Effect of Social Media Marketing on Customer Retention Mediated by Customer Engagement

Abstract

Social Media Marketing is an effort to better understand the dynamics of effective strategies in modern business. The purpose of the study was to determine and analyse the relationship between Social Media Marketing, Customer Retention, mediated by Customer Engagement for Shopee e-commerce users in Palembang City. This research explores the role of social media marketing in maintaining Shopee's customer continuity, customer engagement is a key element in the link between social media marketing strategies and customer retention. The research method was implemented through a quantitative approach using a survey as the research design. The unit of analysis of the research was Shopee e-commerce users in Palembang City with a total of 130 respondents. The data analysis technique was carried out with the SEM-PLS approach to conduct hypothesis testing. The findings of Social Media Marketing proved to have no direct effect on Customer Retention (38.9%), but Social Media Marketing has a positive influence on Customer Engagement by (97.2%) and the relationship between customer engagement and Customer Retention by (0.56%). The results of the mediation test state that Customer Engagement successfully mediates the relationship between Social Media Marketing to Customer Retention with a relatively low mediation effect. The implications of these findings provide opportunities for Marketing Managers to develop more effective marketing strategies through social media platforms and increase interaction with customers, in order to increase Customer Engagement. The research results can be used by Shopee e-commerce Marketing Managers to design more targeted marketing campaigns and improve understanding of customer behaviour and needs through analysis of the data generated. The implications of this research also encourage the training and development of marketing teams to improve the effectiveness of their performance and adopt a data-driven decision-making approach in future marketing strategies.