CUSTOMER ENGAGEMENT AS A MECHANISM LINKING SOCIAL MEDIA USE TO MSME PERFORMANCE
DOI:
https://doi.org/10.70248/jmie.v4i1.4676Abstract
This research investigates the mediating role of customer engagement in the relationship between social media use and MSME performance in Denpasar. An explanatory quantitative design was adopted, involving 390 MSME owners or managers who actively use social media for business-related activities. Data were collected through a structured questionnaire and analysed using Structural Equation Modelling–Partial Least Squares (SEM-PLS) with SmartPLS 3.2.9. The findings indicate that social media use significantly influences customer engagement (β = 0.624; p < 0.001) and MSME performance (β = 0.390; p < 0.001 , while customer engagement also has a significant positive effect on MSME performance (β = 0.473; p < 0.001). Customer engagement significantly mediates the relationship between social media use and MSME performance (β = 0.296; p < 0.001). The model explains 39.0% of the variance in customer engagement (R² = 0.390) and 60.7% of the variance in MSME performance (R² = 0.607). Theoretically, these findings enrich digital marketing literature by demonstrating that customer engagement functions as an important mechanism through which social media use contributes to MSME performance, extending the understanding of social media beyond its promotional role. Practically, the findings suggest that MSMEs should develop social media strategies that foster two-way interaction, customer feedback, reviews, and recommendations to strengthen engagement and improve business performance.
References
Adji Mulia Zaen, S., Ichsanuddin Nur, D., Studi Manajemen, P., Ekonomi dan Bisnis, F., & Pembangunan Nasional Veteran Jawa Timur, U. (2024). SOSIALISASI PROGRAM PEMBERDAYAAN UMKM DENGAN SISTEM DIGITAL GUNA MENINGKATKAN DAYA SAING DI KECAMATAN PAKAL. In Communnity Development Journal (Vol. 5, Number 6).
Amin, M., Gohar, M., & Ali, I. (2025). Impact of digital transformation on SME’s marketing performance: role of social media and market turbulence. Discover Sustainability, 6(1). https://doi.org/10.1007/s43621-025-01228-3
Amoah, J., Belás, J., Khan, K. A., & Metzker, Z. (2021). Antecedents of Sustainable SMEs in the Social Media Space: A Partial Least Square-Structural Equation Modeling (PLS-SEM) Approach. Management and Marketing, 16(1), 26–46. https://doi.org/10.2478/mmcks-2021-0003
Anker, T. B., Gordon, R., & Zainuddin, N. (2022). Consumer-dominant social marketing: a definition and explication. European Journal of Marketing, 56(1), 159–183. https://doi.org/10.1108/EJM-08-2020-0618
Bai, L., Yan, X., & Yu, G. (2020). Impact of consumer engagement on firm performance. Marketing Intelligence & Planning, 38(7), 847–861. https://doi.org/10.1108/MIP-08-2019-0413
Basri, W. S. M., & Siam, M. R. A. (2019). Social media and corporate communication antecedents of SME sustainability performance: A conceptual framework for SMEs of Arab world. Journal of Economic and Administrative Sciences, 35(3), 172–182. https://doi.org/10.1108/JEAS-01-2018-0011
Brodie, Roderick J, Hollebeek, Linda D, Jurić, Biljana, & Ilić, Ana. (2011). Customer Engagement: Conceptual Domain, Fundamental Propositions, and Implications for Research. Journal of Service Research, 14(3), 252–271. https://doi.org/10.1177/1094670511411703
Charoensukmongkol, P., & Sasatanun, P. (2017). Social media use for CRM and business performance satisfaction: The moderating roles of social skills and social media sales intensity. Asia Pacific Management Review, 22(1), 25–34. https://doi.org/10.1016/j.apmrv.2016.10.005
Ekanem, I., & Erukusin, K. S. (2021). The emergence of social media and its impact on SME performance. In Research Anthology on Strategies for Using Social Media as a Service and Tool in Business (pp. 919–933). https://doi.org/10.4018/978-1-7998-9020-1.ch046
Garg, P., Gupta, B., Dzever, S., Sivarajah, U., & Kumar, V. (2020). Examining the Relationship between Social Media Analytics Practices and Business Performance in the Indian Retail and IT Industries: The Mediation Role of Customer Engagement. International Journal of Information Management, 52, 102069. https://doi.org/https://doi.org/10.1016/j.ijinfomgt.2020.102069
Garrido-Moreno, A., García-Morales, V., King, S., & Lockett, N. (2020). Social Media use and value creation in the digital landscape: a dynamic-capabilities perspective. Journal of Service Management, 31, 313–343. https://doi.org/10.1108/JOSM-09-2018-0286
Guha, S., Harrigan, P., & Soutar, G. (2018). Linking social media to customer relationship management (CRM): a qualitative study on SMEs. Journal of Small Business and Entrepreneurship, 30(3), 193–214. https://doi.org/10.1080/08276331.2017.1399628
Gülsoy, T. Y. (2018). Does social media marketing improve business performance? In Social Media Marketing: Breakthroughs in Research and Practice (pp. 138–162). https://doi.org/10.4018/978-1-5225-5637-4.ch008
Ha, S., Kankanhalli, A., Kishan, S. J., & Huang, K.-W. (2016). Does social media marketing really work for online SMEs?: An empirical study. 2016 International Conference on Information Systems, ICIS 2016. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85019400720&partnerID=40&md5=b85f5baacd422b61a93870cfd3d9c9c7
Hollebeek, Linda D, Glynn, Mark S, & Brodie, Roderick J. (2014). Consumer Brand Engagement in Social Media: Conceptualization, Scale Development and Validation. Journal of Interactive Marketing, 28(2), 149–165. https://doi.org/10.1016/j.intmar.2013.12.002
Jiang, Y., Pongsakornrungsilp, S., Pongsakornrungsilp, P., & Li, L. (2024a). The Impact of Interactivity on Customer Purchase Intention in Social Media Marketing: The Mediating Role of Social Presence. TEM Journal, 13(3), 2133–2145. https://doi.org/10.18421/TEM133-41
Kartawinata, S., Tovin, M., Christopher Lam, V., & Limantara, N. (2024). The Impact of Live Streaming on Consumer Engagement and Purchase Intentions towards Ashion Industry on E-Commerce. Proceedings of 2024 International Conference on Information Management and Technology, ICIMTech 2024, 43–48. https://doi.org/10.1109/ICIMTech63123.2024.10780897
Kaswinata, Harahap, I., Nawawi, Z. M., & Syahputra, A. (2023). SIGNIFIKANSI PERANAN UMKM DALAM PEMBANGUNAN EKONOMI DI KOTA MEDAN DALAM PRESPEKTIF SYARIAH. Jurnal Tabarru’ : Islamic Banking and Finance, 2.
Kostygina, G., Tran, H., Carter, C. C., & Emery, S. L. (2025). Promotion of Health-Harming Products on Instagram: Characterizing Strategies Boosting Audience Engagement with Cigar Marketing Messages. International Journal of Environmental Research and Public Health, 22(8). https://doi.org/10.3390/ijerph22081285
Kreiterling, C. (2023). Digital innovation and entrepreneurship: a review of challenges in competitive markets. Journal of Innovation and Entrepreneurship, 12(1). https://doi.org/10.1186/s13731-023-00320-0
Li, F., Larimo, J., & Leonidou, L. C. (2021). Social media marketing strategy: definition, conceptualization, taxonomy, validation, and future agenda. Journal of the Academy of Marketing Science, 49(1), 51–70. https://doi.org/10.1007/s11747-020-00733-3
Mamun, A. Al, Mohiuddin, M., Fazal, S. A., & Ahmad, G. Bin. (2018). Effect of entrepreneurial and market orientation on consumer engagement and performance of manufacturing SMEs. Management Research Review, 41(1), 133–147. https://doi.org/10.1108/MRR-04-2017-0102
Matosas-López, L. (2024). Can customer engagement in social media be used as a predictor of operating revenue in SMEs? Journal of Open Innovation: Technology, Market, and Complexity, 10(4), 100380. https://doi.org/https://doi.org/10.1016/j.joitmc.2024.100380
Michaelidou, N., Siamagka, N.-T., & Christodoulides, G. (2011). Usage, barriers and measurement of social media marketing: An exploratory investigation of small and medium B2B brands. Industrial Marketing Management, 40, 1153–1159. https://api.semanticscholar.org/CorpusID:8058727
Natanael, A., & Firdausy, C. (2025). Pengaruh penggunaan media sosial, sikap konsumen terhadap media sosial, dan online review terhadap niat beli food and beverage pada usaha kecil di JakartaPengaruh penggunaan media sosial, sikap konsumen terhadap media sosial, dan online review terhadap niat beli food and beverage pada usaha kecil di Jakarta. Jurnal Manajemen Bisnis Dan Kewirausahaan, 9, 209–221. https://doi.org/10.24912/jmbk.v9i2.33893
Nguyen, C., Nguyễn, N., Nguyen, N., & Duong, A. (2020). The Relationships of Social Media Marketing, Consumer Engagement and Purchase Intention. https://www.researchgate.net/publication/342976186
Noviaristanti, S., Shinta Ceysaria Yunita, & Sunu Puguh Hayu Triono. (2023). Social Media Usage Impacts on SME’s Firm Performance: Evidence From West Java, Indonesia. Indonesian Journal of Business and Entrepreneurship, 9, 285.
Nurmilah, R., & Djakasaputra, A. (2024). Optimasi Kinerja Usaha UMKM Kuliner: Hubungan Aspek Internal Melalui Customer Engagement. Jurnal Manajerial Dan Kewirausahaan, 6, 641–648. https://doi.org/10.24912/jmk.v6i3.31596
Papageorgiou, G., Efstathiades, A., & Milikouri, G. (2017). Innovation, co-creation and the new product development process in small to medium-sized enterprises (SMEs). Proceedings of the European Conference on Innovation and Entrepreneurship, ECIE, 2017-September, 488–495. https://www.scopus.com/inward/record.uri?eid=2-s2.0-85054060722&partnerID=40&md5=266fab4f575cb7ebb42706ca41709076
Putri, S. M., & Hidayat, R. (2023). Pengaruh Sosial Media Marketing Instagram Online Shop Alluna Terhadap Minat Beli. EProceedings of Applied Science, 9(6), 2933.
Ratnasari, D., & Fachrian, Z. (2025). Pemanfaatan Media Sosial sebagai Alat Komunikasi Bisnis untuk Meningkatkan Brand Awareness. Jurnal Bisnis Dan Ekonomi, 3(1), 30–41. https://doi.org/10.61597/jbe-ogzrp.v3i1.85
Razafinandrasana, C., & Tamara, D. (2024). Exploring The Factors Which Impact Impulse Purchase Intention in TikTok Live Streaming Shopping in Indonesia. International Journal of Electronic Commerce Studies, 15(2), 21–62. https://doi.org/10.7903/ijecs.2279
Shandy, V. M., Mulyana, A., & Harsanto, B. (2023). Social media richness, brand equity, and business performance: An empirical analysis of food and beverage SMEs. Cogent Business and Management, 10(2). https://doi.org/10.1080/23311975.2023.2244211
Shang, Y., Rehman, H., Mehmood, K., Xu, A., Iftikhar, Y., Wang, Y., & Sharma, R. (2022). The Nexuses Between Social Media Marketing Activities and Consumers’ Engagement Behaviour: A Two-Wave Time-Lagged Study. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.811282
Sharabati, A.-A. A., Ali, A. A. A., Allahham, M. I., Hussein, A. A., Alheet, A. F., & Mohammad, A. S. (2024). The Impact of Digital Marketing on the Performance of SMEs: An Analytical Study in Light of Modern Digital Transformations. Sustainability (Switzerland), 16(19). https://doi.org/10.3390/su16198667
Sinha, M., & Fukey, L. N. (2022). The visibility challenge: digital platforms giving a face to Indian small and medium enterprises. International Journal of Technoentrepreneurship, 4(3), 180–197. https://doi.org/10.1504/ijte.2022.127150
Subagja, A. D., Almaududi Ausat, A. M., & Suherlan, S. (2022). The Role of Social Media Utilization and Innovativeness on SMEs Performance. JURNAL IPTEKKOM Jurnal Ilmu Pengetahuan & Teknologi Informasi, 24(2), 85–102. https://doi.org/10.17933/iptekkom.24.2.2022.85-102
Sugianta, I. K. A., Reganata, G. P., Yuda, I. N. A., & Dillon, R. (2022). PELATIHAN DIGITAL MARKETING MENGGUNAKAN APLIKASI WHATSAPP BLAST UNTUK PENINGKATAN KAPASITAS USAHA UMKM DI KOTA DENPASAR. Jurnal Abdi Insani, 9(3), 859–867. https://doi.org/10.29303/abdiinsani.v9i3.666
Syaifullah, J., Syaifudin, M., Sukendar, M. U., & Junaedi, J. (2021). Social Media Marketing and Business Performance of MSMEs During the COVID-19 Pandemic. Journal of Asian Finance, Economics and Business, 8(2), 523–531. https://doi.org/10.13106/jafeb.2021.vol8.no2.0523
Tsiotsou, R. H. (2020). Social media and customer engagement. In The Routledge Handbook of Service Research Insights and Ideas (pp. 373–387). https://doi.org/10.4324/9781351245234-19
Udayana, P. S. N. (2024). Dampak Strategi Pemasaran Terhadap Minat Beli Menggunakan Media Sosial Instagram: Tinjauan Literatur (Vol. 2). https://doi.org/https://doi.org/10.46837/inspire.v2i1.46
Udayana, P. S. N., Utami, I. G. A. N. P., & Indriya, D. A. G. A. (2025). EFEKTIVITAS IKLAN INSTAGRAM STORIES BAGI GENERASI Z: KAJIAN LITERATUR. Journal of Management and Business, 1(2), 1–14. https://jumanis.runata.ac.id/index.php/journal/article/view/33
Vargo, S. L., & Lusch, R. F. (2008). Service-dominant logic: continuing the evolution. Journal of the Academy of Marketing Science, 36(1), 1–10. https://doi.org/10.1007/s11747-007-0069-6
