The rise in the popularity of digital communication and social media platforms has increased the speed of information exchange among customers, and enabled them to instantaneously voice their thoughts and opinions about brands. This trend however has created certain challenges for marketers since they could no longer exert the sole control over the identities of their brands. Past research has confirmed that social interaction plays a key role in development of strong relationships among individuals (e.g. Nahapiet and Ghosal, 1998; Lobschat et al., 2013). In branding context, social interactions and the benefits derived from them establish a brand’s social value, and contribute to the formation of solid customer-brand relationships.
As an attempt to better capture a brands’ social value, Lobschat et al. (2013) recently introduced the concept of social currency. Their findings reveal the importance of social currency as a key antecedent to several components of brand equity such as perceived quality, brand loyalty, and brand trust. Due to the newness of the social currency construct, however, its relationship with many other key variables of consumer behavior has not been much verified yet. In particular, there has been very little investigation of the potential links between social currency and the two emerging paradigms of experiential and transformational branding.
Accordingly, the current study explores the role of brand’s social currency in providing experiential and transformational benefits in the context of cosmetics consumption. It further investigates the roles of brand experience and customer transformation in shaping greater customer attachment towards the brand. To test these relationships, the Structural Equation Modeling (SEM) method is applied. In total, 373 participants took part in this study. Self-administered questionnaires were distributed, and participants were invited to report on their consumption of their favorite cosmetic brands. Findings confirm that the various dimensions of social currency lead to experiential and transformational benefits in different ways. Results further suggest that both experiential and transformational benefits contribute to the enhancement of customer-brand relationships. Theoretical and managerial contributions are discussed.