Customer engagement, digitalization, and business performance: A model for digital startups

Abstract

Customer engagement is crucial for success and innovation in digital businesses, but its impact on digital startups, particularly on business performance, is underexplored. This study investigates the relationship between customer-related digitalization factors, engagement, and business performance. Using a cross-sectional survey and Partial Least Squares Structural Equation Modeling, data from 125 startups were analyzed. The findings reveal that digitalization factors, encompassing Data Security, Transparency, Consumer Reviews, and Effective Communication, significantly impact customer engagement and digital business performance. Additionally, customer engagement mediates the relationship between digitalization factors and digital business performance, highlighting its critical role in fostering customer loyalty, communication, and co-creation.