Promoting Customer Engagement and Brand Loyalty on Social Media: The Role of Virtual Influencers

ABSTRACT This study analyzes how virtual influencer factors influence customer engagement and brand loyalty using both parasocial theory and source credibility model. Further, it highlights the importance of incorporating the right influencer marketing orientation with a brand's positioning strategy. First, a quantitative survey was conducted with a sample size of 406 participants which was analyzed using PLS‐SEM technique. Subsequently, semi‐structured interviews were conducted with virtual influencer followers to explore the influencers' impact on the behavioral responses of customers towards a brand. The findings reveal that only trustworthiness and authenticity positively influence engagement, while parasocial interaction is a major driver of affective reactions, leading to higher engagement. Thus, parasocial interaction, authenticity, and trustworthiness collectively explain the intensity of engagement, which, in turn influences brand loyalty. Our study presents a surprising result that attractiveness of virtual influencers is not directly associated to customer engagement. Further, the study highlights virtual influencers' role in strengthening long‐term customer‐brand relationships and enhancing a loyal fan base for brands. In conclusion, by utilizing their potential influence, brands can improve their overall efficacy of marketing communications in facilitating customer engagement to foster loyalty.