Saturday, January 10, 2009

Factors Affecting eLoyalty

Since the internet is a nearly perfect market because information is instant and buyers can compare the offerings of sellers worldwide, there is intense price competition which has a direct impact on loyalty. for this reason, there is a great need to understand any factors that might contribute to brand loyalty.

Once again I am referring to the Master's Thesis of Asim and Hashmi (E-Loyalty, Companies Secret Weapon on the Web) noted in my previous blog. The eight factors that appear to have the greatest impact on eLoyalty are:
1. Customization - this describes the ability to fit products and services to individual customers
2. Contact interactivity - The interaction between the e-retailer and the buyer. It is defined as the availability and effectiveness of customer support tools on a website and the degree to which two-way communication with customers is facilitated.
3. Cultivation - This is the extent to which an e-retailer provides relevant information and incentives to its customers in order to extend the breath and depth of their purchases over time.
4. Care - This is the attention an e-retailer pays to its customers in order to build long-term relationships.
5. Community - The community is the list of online customers which is organized and maintained by the e-retailer to exchange information and opinion about the products and services offered to other customers.
6. Choice - Since the e-retailer is a virtual supplier, he does not need brick-and-mortar to offer products and services, he can offer a greater variety than the traditional retailer. In addition he can form alliances with other e-retailers to provide customers with an even greater choice. This approach can reduce the mount of searching a customer has to do in order to complete his shopping.
7. Convenience - This simply refers to the simplicity of the web site.
8. Character - The character may be the most important aspect of the website since it is the aspect of the site which give the first impression in the mind of the customer.

Each of these factors are built upon references to published research by qualified academicians. The next step is to determine whether or not these factors have changed or are changing over time.

The bottom line is there needs to be experimental data developed that verifies these factors. Until that occurs we can only surmise these individual factors represent the major components of loyalty. The good news is that these factors make sense. I will write more about these later.


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