Leveraging social media for business development: an empirical analysis of fan loyalty and fan expansion

Mohammadkazemi, Reza; Falahat, Mohammad Article Leveraging social media for business development: an empirical analysis of fan loyalty and fan expansion Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Mohammadkazemi, Reza; Falahat, Mohammad (2024) : Leveraging social media for business development: an empirical analysis of fan loyalty and fan expansion, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-12, https://doi.org/10.1080/23311975.2024.2393739 This Version is available at: https://hdl.handle.net/10419/326508 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Leveraging social media for business development: an empirical analysis of fan loyalty and fan expansion Reza Mohammadkazemi & Mohammad Falahat To cite this article: Reza Mohammadkazemi & Mohammad Falahat (2024) Leveraging social media for business development: an empirical analysis of fan loyalty and fan expansion, Cogent Business & Management, 11:1, 2393739, DOI: 10.1080/23311975.2024.2393739 To link to this article: https://doi.org/10.1080/23311975.2024.2393739 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 23 Aug 2024. Submit your article to this journal Article views: 3463 View related articles View Crossmark data Citing articles: 3 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Marketing | research article Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2393739 Leveraging social media for business development: an empirical analysis of fan loyalty and fan expansion reza Mohammadkazemia,b and Mohammad Falahatc aFaculty of entrepreneurship, university of tehran, tehran, iran; baalborg university, aalborg, Denmark; cschool of Marketing and Management, asia Pacific university of technology and innovation (aPu), technology Park Malaysia, Kuala Lumpur, Malaysia ABSTRACT this study investigates the role of social media in driving business development for Danish professional football clubs. it particularly examines how social media engagement impacts fan loyalty, fan size, and overall business growth. We employed structural equation modeling (seM) to analyze data from a total sample of 127 participants, collected through questionnaires distributed to club directors and fans across Denmark. the findings reveal that social media fan pages significantly contribute to business growth, with leading social media platforms playing a crucial role. specifically, social media engagement enhances both fan loyalty and fan size, which directly impacts the overall business development of football clubs. theoretically, this research introduces a new model elucidating how premier social media platforms influence fan loyalty, fan size, and the overarching business development of football clubs. it expands our understanding of brand loyalty and business growth within the social media context. Practically, it provides actionable insights for club stakeholders on effectively utilizing social media platforms to foster fan loyalty, grow their fan base, and achieve substantial business growth. this study makes a novel contribution to the academic literature on sports club business development through social media. it offers both theoretical and practical insights into effective commercial strategies that clubs can employ to leverage social media engagement, marking a significant step forward in football club commercial strategy. Introduction the proliferation of social media has revolutionized many industries, including the world of sports. this paper delves into the impact of social media on the business development of football clubs, with a specific focus on the Danish football league. Brand loyalty, often perceived as a key metric of business development, is influenced significantly by social media interactions. however, to fully understand this relationship, it is imperative to consider other contributing factors. in exploring this dynamic, we reference the strategy implemented by liverpool Fc, not as an isolated case but as an exemplar of the broader potential social media holds for football clubs. this case underscores how effectively leveraging social media platforms can enhance fan engagement and, subsequently, business development. We will contextualize this within the broader spectrum of social media’s impact on sports marketing and fan interaction. the choice of Denmark as our research setting is not arbitrary. the Danish Football league presents a unique blend of passionate fan bases and progressive social media usage, making it an ideal context to study the nuances of digital fan engagement and its effects on football clubs’ business models. © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT Mohammad Falahat [email protected] school of Marketing and Management, asia Pacific university of technology and innovation (aPu), technology Park Malaysia, Bukit Jalil, Kuala Lumpur, 57000, Malaysia. https://doi.org/10.1080/23311975.2024.2393739 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY received 8 May 2024 revised 28 June 2024 accepted 1 august 2024 KEYWORDS social media; business development; fan expansion; fan loyalty; football club SUBJECTS Marketing; advertising; consumer Behavior; international Marketing; internet/Digital Marketing/e-Marketing; Marketing communications; Marketing Management; relationship Marketing; sports Development 2 r. MOhaMMaDkaZeMi anD M. Falahat the use of social media is pivotal in shaping the business development of Danish professional football clubs. this study delves into how these clubs leverage social media platforms like Facebook, twitter, instagram, and Youtube, not only to widen their fan bases but also to strengthen team loyalty. While acknowledging the general significance of social media in business strategies across various industries, as noted by rodriguez et al. (2012), we focus specifically on the unique landscape of sports organizations. recognizing brand loyalty as a cornerstone of business development (Qualman, 2010), we examine the role of social media in enhancing business development within the context of football clubs. this is particularly relevant given tsiotsou’s (2013) insights on promotional initiatives in sports teams aimed at nurturing fan interest and participation. the example of liverpool Football club, analyzed by Parganas and anagnostopoulos (2015), serves as a model of successful social media strategy in football clubs, showing how a customer-centric approach can lead to substantial growth in international markets. recent studies have underscored the positive impact of digital media on customer loyalty in sports contexts, confirming the need for tailored strategies in sports marketing to optimize social media’s influence (chelladurai, 2013; Doyle et al., 2020). however, our research will not encompass the ‘dark side’ of social media engagement, as noted by Payne and Frow (2017), as it falls outside our study’s scope. While acknowledging the multifaceted nature of social media, this study focuses on its positive aspects, particularly in building and sustaining brand loyalty. the introduction of dark aspects of social media, while relevant, falls outside the scope of our current research. this study aims to investigate how social media engagement enhances fan loyalty and fan size, which in turn drives the business development of football clubs. We draw upon theoretical frameworks from previous research, such as lim et al. (2015), santos etal. (2019), and Yoshida et al. (2018), to develop our conceptual model and hypotheses. Literature review the integration of social media in business strategies, particularly for sports organizations, has been a focal point of contemporary research. the initial conceptualization of social media as a business tool was broad, focusing mainly on its capacity to enhance customer interaction and brand exposure (Mohammadkazemi et al., 2020; Prodanova & Van looy, 2019; todd & Javalgi, 2007). While the role of information technology and communication infrastructure in global market development has been widely recognized (todd & Javalgi, 2007), the specific impact of social media on football clubs’ business growth demands a more nuanced examination. this review builds upon foundational studies (lee et al., 2016; Prodanova & Van looy, 2019) and explores three critical areas: the role of social media in business development, the influence of social media platforms on fan loyalty, and the influence of fan loyalty on business development. Role of social media in business development social media has become a pivotal element in modern business strategies, driving customer engagement, brand awareness, and ultimately business growth. Platforms, such as Facebook, instagram, twitter, and Youtube enable businesses to reach a broader audience, facilitate direct communication, and build stronger relationships with customers (kaplan & haenlein, 2010). studies have shown that social media marketing significantly enhances brand loyalty, customer satisfaction, and business performance (akar et al., 2015; casaló et al., 2010). in sports organizations, social media is used not only for marketing but also for fan engagement and community building. By leveraging social media, sports clubs can interact with fans in real-time, share exclusive content, and create a sense of belonging among supporters (Vale & Fernandes, 2018). this interaction is crucial for sustaining fan interest and participation, which are key drivers of business development in sports clubs (tsiotsou, 2013). recent studies highlight the potential of social media from a multi-platform perspective, underscoring its role in connecting with fans in the digital age (Fried & Mumcu, 2017; hull & abeza, 2021; romero-Jara et al., 2023). cOgent Business & ManageMent 3 Influence of social media platforms on fan loyalty Fan loyalty is a critical metric for the success of sports organizations. social media platforms play a significant role in fostering this loyalty by providing fans with a direct line of communication with their favorite teams and players. studies have highlighted the effectiveness of platforms like Facebook and twitter in building a loyal fan base (Doyle et al., 2020; Vale & Fernandes, 2018). social media engagement enhances fan loyalty by allowing fans to interact with content, participate in discussions, and feel a part of the team’s community. research indicates that social media activities, such as liking, sharing, and commenting on posts, contribute to a fan’s emotional and psychological connection to the team, thus increasing attitudinal and behavioral loyalty (gladden & Funk, 2001; iwasaki & havitz, 2004). Influence of fan loyalty on business development the relationship between fan loyalty and business development is well-documented in the literature. loyal fans are more likely to attend games, purchase merchandise, and engage in other revenue-generating activities, which directly contribute to the financial success of sports clubs (Mahony etal., 2000; Wu et al., 2012). Fan loyalty also leads to positive word-of-mouth and advocacy, attracting new fans and expanding the club’s reach. this expansion is crucial for business development, as a larger and more engaged fan base translates into higher ticket sales, sponsorship deals, and overall revenue (Oliver, 1999; Yun et al., 2020). Moreover, loyal fans provide valuable feedback and insights that can help clubs improve their offerings and better cater to their audience, further driving business growth. recognizing the potential endogeneity between social media engagement and fan loyalty, our conceptual model delves into the relationship where both elements can influence each other. this approach allows us to investigate the possibility of reverse causality and how fan loyalty might in turn shape a club’s social media strategies. Conceptual framework and hypotheses development Based on the literature review, we developed a conceptual model to examine the relationships between social media engagement, fan loyalty, fan size, and business development. the model hypothesizes the following relationships: H1: social media engagement on Facebook positively impacts the business development of football clubs. H2: social media engagement on Facebook positively impacts fan loyalty. H3: social media engagement on Facebook positively impacts fan size. H4: social media engagement on instagram positively impacts the business development of football clubs. H5: social media engagement on instagram positively impacts fan loyalty. H6: social media engagement on instagram positively impacts fan size. H7: social media engagement on twitter positively impacts the business development of football clubs. H8: social media engagement on twitter positively impacts fan loyalty. H9: social media engagement on twitter positively impacts fan size. H10: social media engagement on Youtube positively impacts the business development of football clubs. H11: social media engagement on Youtube positively impacts fan loyalty. H12: social media engagement on Youtube positively impacts fan size. H13: Fan loyalty positively impacts the business development of football clubs. H14: Fan size positively impacts the business development of football clubs. 4 r. MOhaMMaDkaZeMi anD M. Falahat these hypotheses build upon the existing literature, aiming to fill gaps in understanding the specific mechanisms through which social media impacts the business development of football clubs (refer to Figure 1). Research method the purpose of this research is to investigate the impact of social media on the business development of football clubs. this will be achieved by analyzing the loyalty of fans and the number of fans who engage with the teams on various social media platforms including Facebook, twitter, instagram, and Youtube. given the practical applications of this study in the context of football club business development, it is considered applied research. the research methodology is quantitative and descriptive, using a correlational approach with variance-covariance matrix analysis. the study’s statistical population focuses on football club fans and directors in Denmark, with a statistical sample selected using the cochran Formula. Data collection Data for this study was collected through an online questionnaire targeting football fans in Denmark. the use of an online survey allowed us to reach a diverse and geographically dispersed sample, ensuring a wide representation of the fan base. the questionnaire was distributed through various channels, including social media platforms (Facebook, twitter, instagram), email newsletters, and official club websites. this multi-channel approach helped maximize participation and ensure a representative sample. the questionnaire, adapted from akar etal. (2015) and gargone (2011), assesses fan motives and club engagement across a broad age range and educational levels. a total sample of 127 responses were received, aged between 10 and 70, with educational levels ranging from high school to advanced degrees. the age range was intentionally broad to capture the diverse demographic of football fans and ensure that the study reflects the engagement patterns across different age groups. including a wide age range helps us understand how social media engagement may vary among different age cohorts and its impact on fan loyalty and business development. Inclusion and exclusion criteria inclusion criteria for the study were as follows: (1) participants must be active fans of the football clubs included in the study, (2) participants must have an active social media account and follow the club on at least one platform, and (3) participants must be aged between 10 and 70 years to ensure a broad representation of the fan base. Figure 1. Conceptual model. cOgent Business & ManageMent 5 Representativeness of the sample the representativeness of the sample was ensured by comparing the demographic characteristics of the respondents with the general fan base of the clubs considered in the study. Demographic data, such as age, gender, and educational background, were collected and analyzed to ensure they matched the demographic profile of the clubs’ fan base. this comparison confirmed that the sample was representative of the broader fan population, providing confidence that the findings can be generalized to the entire fan base. Measurement scales Business development the scale for measuring business development was designed to capture various aspects of how social media influences the growth and commercial success of football clubs. this scale includes items that assess factors, such as increased ticket sales, merchandise revenue, sponsorship deals, and overall financial performance. the items were measured on a likert scale ranging from 1 (strongly disagree) to 7 (strongly agree). Fan loyalty Fan loyalty was measured using a scale that captures both attitudinal loyalty (psychological commitment to a team) and behavioral loyalty (actions related to consumption and brand loyalty). this scale was adapted from gladden and Funk (2001) and iwasaki and havitz (2004). the items were also measured on a likert scale ranging from 1 (strongly disagree) to 7 (strongly agree). Fan size Fan size was measured by assessing the number of fans who actively engage with the team on social media platforms. this scale includes items, such as the number of followers on the club’s social media pages, the level of interaction (likes, comments, shares) on the club’s posts, and the growth rate of the club’s social media followers over time. these scales were validated through a pilot test, ensuring both reliability and validity. the cronbach’s alpha for all scales was above the 0.7 threshold, indicating good internal consistency. additionally, factor analysis confirmed the constructs’ validity, with all items loading significantly on their respective factors. Demographic information the sample consisted of 127 participants, with the majority being male (82%) and aged between 20 and 30 years (75%). Most participants were single (46%) and held an undergraduate degree (32%). Analysis and findings Our analysis unfolded in two phases. initially, we examined demographic data from participants summarized in table 1. this demographic breakdown, including gender, age, marital status, and educational level, provided a foundational understanding of our sample population. in the second phase, we employed the Partial least squares Method (Pls), adhering to hair et al. (2012)’s recommendations for both internal and external model assessments. table 2 outlines the reliability and validity indexes, showing that each item’s factor loading surpasses the 0.4 threshold, indicating strong item reliability. constructs’ cronbach’s alpha values exceed the 0.6 minimum (Moss et al., 1998), and composite reliability for all constructs is above 0.707, affirming construct reliability. We evaluated convergent validity using the average Variance extracted (aVe) index, with all constructs meeting chin (1998)’s minimum threshold of 0.5. Discriminant validity, assessed by comparing the square root of aVe for each construct against its correlation with other variables, is confirmed in table 3. 6 r. MOhaMMaDkaZeMi anD M. Falahat Our structural model analysis and hypothesis testing results are presented in table 4. a significant finding was the considerable impact of Facebook club fan pages on business development and fan numbers. instagram emerged as influential for both business development and team loyalty, as well as fan numbers. twitter notably affected team loyalty, while Youtube had a substantial impact on business development, team loyalty, and fan numbers. Table 1. Demographic information. Frequency Percent gender Male 104 81.9 Female 23 18.1 total 127 100 age 10–20 4 3.1 20–30 95 74.8 30–40 16 12.6 40–50 11 8.7 60–70 1 0.8 total 127 100 Marital status Married 26 20.5 single 58 45.7 other 43 33.9 total 127 100 education level High school 18 14.2 some college 10 7.9 under graduate degree 41 32.3 Master’s degree 36 28.3 advanced degree (M.D. or Ph.D.) 22 17.3 total 127 100 Table 2. Factor loadings, reliability, and validity indexes of items and constructs. Construct item Factor loading Cronbach’s alpha Composite reliability aVe Facebook FB1 0.859 0.863 0.902 0.649 FB2 0.797 FB3 0.808 FB4 0.858 FB5 0.695 twitter tw1 0.933 0.958 0.967 0.856 tw2 0.960 tw3 0.910 tw4 0.918 tw5 0.905 instagram ins1 0.918 0.964 0.972 0.874 ins2 0.912 ins3 0.933 ins4 0.938 ins5 0.973 Youtube Yt1 0.779 0.929 0.947 0.783 Yt2 0.825 Yt3 0.940 Yt4 0.942 Yt5 0.926 Loyalty of fans LYLt1 0.937 0.928 0.946 0.748 LYLt2 0.923 LYLt3 0.944 LYLt4 0.929 LYLt5 0.744 LYLt6 0.670 number of fans numgr1 0.818 0.927 0.949 0.824 numgr2 0.951 numgr3 0.929 numgr4 0.927 Business development of club Dev1 0.799 0.962 0.967 0.746 Dev10 0.920 Dev2 0.836 Dev3 0.899 Dev4 0.855 Dev5 0.922 Dev6 0.890 Dev7 0.882 Dev8 0.861 Dev9 0.762 cOgent Business & ManageMent 7 the demographic analysis revealed that 82% of respondents were male and 75% were aged 20–30 years. additionally, 46% were single, and 32% had undergraduate education. these demographics provide context for understanding the social media engagement patterns observed in our study. Discussion the emergence of social media has brought about a significant transformation in the sports industry. Platforms, such as Facebook, twitter, instagram, and Youtube have enabled sports businesses to communicate with millions of users and promote their brands effectively. the research presented in this paper aimed to investigate the impact of social media on the business development of football clubs. the findings of this study demonstrate that Facebook, instagram, and Youtube have a significant positive impact on the business development of football clubs, while Facebook, instagram, and twitter significantly impact fan loyalty. the results also revealed that the number of fans has a significant positive relationship with the business development of football clubs. these findings are consistent with earlier studies that established the crucial role of social media in the football industry and how it positively influences brand loyalty and business development (casaló et al., 2010; De Vries et al., 2012; Filo et al., 2015; kardaras et al., 2003; Mccarthy et al., 2014; Mohammadkazemi, 2015; Wysocki, 2012). Our research is a valuable contribution to the existing literature on sports club business development through social media activities. the study’s theoretical implications are significant, as we developed a new model that demonstrates the positive impact of various social media platforms on fan loyalty, the number of fans, and the overall business development of football clubs. By testing our model on some of the top social media sports club fan pages within the context of football clubs in Denmark, we were able to demonstrate that social media activities can significantly enhance business performance and business development. Table 3. Discriminant validity of constructs. Business development Facebook instagram Loyalty of fans number of fans twitter Youtube Business development of club 0.864 Facebook 0.568 0.806 instagram 0.441 0.759 0.935 Loyalty of fans 0.632 0.731 0.861 0.865 number of fans 0.884 0.577 0.484 0.712 0.900 twitter 0.387 0.787 0.877 0.804 0.503 0.900 Youtube 0.594 0.769 0.747 0.774 0.612 0.677 0.885 Table 4. structural model analysis. Hypothesis Descriptions γ t-Value Decision 1Facebook = > Business development of club 0.199 2.289 supported 2Facebook = > Fans loyalty −0.011 0.099 not supported 3Facebook = > Fans size 0.226 2.280 supported 4instagram = > Business development of club −0.157 2.107 supported 5instagram = > Fans loyalty 0.484 6.624 supported 6instagram = > Fans size −0.181 2.048 supported 7X(twitter) = > Business development of club 0.155 1.794 not supported 8X(twitter) = > Fans loyalty 0.191 3.116 supported 9X(twitter) = > Fans size 0.175 1.815 not supported 10 Youtube = > Business development of club 0.402 3.732 supported 11 Youtube = > Fans loyalty 0.292 3.880 supported 12 Youtube = > Fans size 0.455 3.887 supported 13 Fans loyalty = > Business development of club 0.004 0.108 not supported 14 Fans size = > Business development of club 0.881 25.022 supported