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Online loyalty
Repeat purchases now account for half of e-tailers' sales in the US, meaning that customer loyalty is becoming more of a commercial priority.
In an online world of cost-free and easy comparisons, raising switching barriers to retain customers might seem a challenge, leaving increasing customer satisfaction as the obvious strategy to be employed. However, a study of 192 internet shoppers among British university students finds that despite being largely satisfied with their chosen e-stores, customers do not consider themselves loyal. While building customer satisfaction should remain a priority for e-tailers, beyond a certain point switching barriers becomes more important for customer loyalty.
For moderately satisfied customers, economic switching barriers (relatively attractive prices and the hard benefits of loyalty programmes) contribute to loyalty. While the lowest price may not be essential, an attractive package of payment options and price is. For highly satisfied customers, emotional switching barriers are significant.
Source: Bases of e-store loyalty: perceived switching barriers and satisfaction
George Balabanis, Nina Reynolds, Antonis Simintiras
Journal of Business Research 59, 2006
Review by Steve Lodge
This article was first published on World Business
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