The Effect of Social Media on Customer Satisfaction and Relationship Strength in a Service with High Perceived Risk in Japan

Social media was born from innovational technological changes and has now been recognized as essential communication platforms not only for different online users but also between companies and customers. More and more companies have begun to realize the influential power of social media and are now utilizing it in various fields such as customer relationship management and product innovation. However, applying social media to a real business environment still presents a challenge for most companies as it is a new communication platform without a long history. In fact, most companies appear to be just following the trend of using social media in business without understanding why their customers follow them via social media (Baird and Parasnis 2011). Moreover, detailed effects of companies’ social media marketing activities on customers have not been thoroughly explored. To our knowledge, few academic studies, mostly empirical ones, explore these issues.