Friday, November 12, 2010

Is the Impact of the Internet on Loyalty Positive or Negative

Forrester Research has completed a study in the UK that suggests the Internet has created a platform that is having a negative effect on customer loyalty. A summary of the research was reported in in their 11/10/2010 issue. Some of the statistics that were derived from a survey of 500 shoppers in the UK are:
1. 60% of UK shoppers have not decided on the brand they will purchase before buying a product online.
2. 86% of the shoppers use ratings and reviews for online purchases.
3. 44% go online before buying products in-store.
4. 42% use their mobile phone while shopping of whom 16% used their phone to compare prices with other stores.

The UK is a relatively mature market. The average UK shopper spends about $900 annually compared with $750 in the US.

Based on these statistics one might conclude that shopping has become more of a commodity and buyers are either price or value shopping. There is little, if any, loyalty in price or value shopping unless the shopper adds value for a particular store or company.

On the other side of the coin there is an interesting note in that describes how companies can use Facebook and Twitter to increase incoming traffic to a website. Here are the steps that are suggested:
1. Sign up to Facebook.
2. Make friends in Facebook by joining groups or communities that match your market niche.
3. Send a friend request to people in the community or social network.
4. Use your existing customer's contact email in your email account.
5. Start promoting your business on Facebook - but do it tactically. One way is to promote your website is to create Fan pages representing your business and add people there.
6. Update your Fan pages with the latest happenings in your business.
7. Use Tweets to get the same message out.
8. Let users post their message so that it will be visible for all buddies in the friend list.

The bottom line is that the Internet can be a friend or enemy. It can be a friend if you learn how to use it to attract customers. It becomes an enemy when you allow your business to become a commodity with all your competitors. You choose.

In this new world of instant communication, those who understand the Internet will have a distinct and superior advantage to those who do not.

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