Written by: Susan Timmerman
This article focusses on websites in relation to customer relationship management (CRM). The Internet is one of the channels organizations can use to create a two-way communication with their consumers and provide value. Communication including the management of channels is one of the cornerstones of CRM. In order to create value and subsequently customer loyalty, organizations need to offer a channel that satisfies customers’ needs and wants.
The main research question therefore will be: “How can websites create customer e-loyalty?”
The following research questions will be answered in order to provide a conclusion and a conceptual framework:
- What is the role of communication via websites in building relationships?
- What is customer e-loyalty?
- What are the characteristics of a ‘good’ website that contribute to e-loyalty?
The role of websites as a communication tool in relationship building
Communication is one of the cornerstones in creating relationships with customers (Peelen, 2009). The rise of the Internet has triggered a change in the way organizations and consumers communicate with each other. Websites as a communication tool have gained importance within organizations as they contribute to efficiency and cost reduction (Lancioni, Schau, & Smith, 2003). More significantly, it has enabled companies to establish and maintain more direct relationships with their customers (Garnesan, 2009, as cited in Bruggen, Antia, Jap, Reinartz, & Pallas, 2010). Visser and Sikkenga (2012) show the multiple objectives of a communication channel with their online communication funnel.
First, customers have to be aware of the website. Next, consumers can be captured by showing the benefits of visiting the channel. Besides this, organizations have to take measures to ensure clients will not choose for competitors’ offers. The third step is conversion. Herein, a diverse range of tactics should stimulate consumers to buy the product. The last stage of the funnel is loyalty. Several actions can be taken to ensure customers come back to a company and take part in repeat purchase. Similarly, Chaffey (2011) presents the conversion marketing concept with the steps: reach, act, convert and engage. The stages within both models show the development of the customer relationship organizations want to achieve, with as end goal a loyal consumer who returns.
A communication channel should offer value-adding products and/or services if it wants to attract customers and encourage them to return (Chaffey, 2011). A website is seen as an adequate channel due to the important key factor it offers: interactivity (Pedersen, Miloch, & Laucella, 2007). This factor contributes to the two-way communication and accordingly meeting the needs of consumers, both which are essential to building relationships (Pedersen et al., 2007; Peelen, 2009). The two-way communication refers to the dialogue between the company and its clients. Herein information is exchanged that organizations can use to tailor their products and services to the customers’ needs and wants (Peelen, 2009). This dialogue occurs each time the company or customer interacts with the other party. These moments are called a touch point and can have a significant influence on the customer’s experience. In order to get an insight into each touch point between the consumer and the organization, the customer journey map can be used (Peppers & Rogers, 2011). From a strategic perspective the customer journey can be described as a technique that shows “how a company plans to stage key moments to maximize consumer and company metrics for success” (Peppers & Rogers, 2011). Norton and Pine (2013) define this concept from a consumer perspective as “the sequence of events –whether designed or not - that customers go through to learn about, purchase and interact with company offerings”. During each touch point the organization has to provide certain channel services on their website in order to provide value (Bruggen et al., 2010). Outlining the customer journey enables an organization to see which features a website should offer in the different stages of the journey contributing to e-loyalty (Visser & Sikkenga, 2012).
Customer loyalty reflects the highest level of the customer relationship. Diverse researchers have provided a definition for customer loyalty and consequently e-loyalty. The most commonly used definition is derived from Oliver’s studies. Oliver (1999, as cited in Hur, Ko, & Valacich, 2011) states that customer loyalty represents a commitment from the consumer to “rebuy or repatronize a product or service(p. 462)” despite external factors that might result in a switching behaviour. Anderson and Srinivasan (2003) use this definition as a basis, by defining e-loyalty as: “the customer’s favorable attitude toward an electronic business resulting in repeat buying behavior(p. 125)”. Herein, an important aspect of Oliver’s definition, re-buy or repatronize, is visible. Eshghi, Haughton, and Topi (2007), Essay UK (n.d.) and Toufaily, Ricard, and Perrien (2013) substantiate the e-loyalty definition by describing it as a repeat behavior of online purchase or use of services. Therefore, within this article e-loyalty to a website will refer to the intention to revisit a website to engage in repeat buying behavior in line with the loyalty/engage objective.
There are many factors that influence customer e-loyalty, such as quality and trust (e.g. Gummerus, Liljander, Pura, & Van Riel, 2004; Hur et al., 2011), though, the majority of these studies refer to e-satisfaction. E-satisfaction can be defined as the fulfillment of a customer’s needs and wants during a prior purchasing experience with an electronic commerce company (Anderson & Srinivasan, 2003). Consumers expect certain benefits of products and/or services. These have to be delivered via the online communication channel in order to satisfy customers, and consequently create customer loyalty and stimulate repeat purchase (Hur et al., 2011; Liu, Zhou, & Chen, 2006). Anderson and Srinivasan (2003) and Floh and Treiblmaier (2006) explain that a dissatisfied customers will change their behavior and visit other websites to find a satisfaction to their needs.
To ensure e-satisfaction and consequently e-loyalty, an organization needs to understand the diverse touch points with customers. Clients can leave a website at different stages in the customer journey due to several reasons (Chaffey, 2011). This indicates the need to ensure customer satisfaction at each stage for which several services and tools can be offered.
Characteristics of a ‘good’ website
Several characteristics of a website can contribute to creating e-satisfaction and accordingly e-loyalty (Khalifa & Shen, 2005). The needs and wants of consumers can be ordered in a sequence, which can refer to the online buying process (Visser & Sikkenga, 2012). This can be seen as the earlier mentioned customer journey based on consumer behaviour. Both Feinberg, Kadam, Hokama, and Kim (2002) and Khalifa and Shen (2005) map the online buying process in three phases; the pre-purchase (need recognition, information search, evaluation of alternative products, choice of sales channel), purchase and post-purchase (result), and used this to study the several website tools that effect e-satisfaction in each stage.
Within the pre-purchase phase, Khalifa and Shen (2005) state that ‘customer education’ (providing guidance on the website to find information), ‘web site’s search capabilities’, ‘website customization’ and ‘alternative channels’ are significantly related to satisfaction. These features are necessary for the first stage as they contribute to the provision of (relevant) information, which is related to the information search. Posselt and Gerstner (2005) conducted research into the pre-sale features as well. They highlight the importance of the ‘ease of use’, ‘clarity of information’ and ‘design’ of a website, contributing to the information search in the online buying process. Tarafdar and Zhang (2008) support the characteristic of ‘customer education’ from Khalifa and Shen (2005) and divide it in ‘ease of navigation’ and ‘usability’. In addition, they highlight the importance of ‘information content’ and ‘security’, of which the latter is essential as insecurity regarding a website can result in consumers not visiting it (Ozok, Oldenburger, & Salvendy, 2007; Tarafdar & Zhang, 2008). In addition, Ilfeld and Winer (2001) describes factors that ‘increase site visitation’ and state this can be achieved via online advertising, partnerships, PR and notably offline advertising. Chaffey (2011) substantiates these findings and complements these with SEO (search engine optimization), pay-per-click search and e-mail marketing.
The second phase of the online buying process is the at-purchase stage. Khalifa and Shen (2005) state the significance of ‘product customization’, ‘comparative shopping’, ‘dynamic pricing’, and ‘payment methods and purchase conditions’. They substantiate the need for these features as they contribute to the evaluation of alternative products (comparative shopping) and purchase, stimulating the conversion of the consumers. Szymanski and Hise (2000) describe the importance of ‘financial security’, which is in line with Khalifa and Shen’s (2005) ‘payment methods and purchase conditions’. In addition, Szymanski and Hise (2000) explain that ‘convenience’, ‘merchandising’ and ‘website design’ should be offered as they again allow consumers to compare products and simplify the process of purchase through easy navigation.
The last phase of the online buying process is the post-purchase stage. According to Khalifa and Shen (2005) there are several services a website should offer that lead to customer loyalty including ‘problem solving’, ‘order tracking’, ‘feedback channel’, ‘web centre’ and ‘online community’. These actions support the consumer and subsequently can retain them (Anderson & Srinivasan, 2003; Posselt & Gerstner, 2005). In comparison, Tarafdar and Zhang (2008) state other services should be offered, namely ‘customization’, ‘ease of navigation’ and ‘security’. ‘Customization’ should be offered as it signifies one-to-one marketing providing an individual value proposition to consumers.
According to these findings it can be stated that depending on the stage customers are in certain factors are of importance. For instance, it is shown that some factors, including ‘design’ and ‘information’ are necessary during both the pre-purchase and at-purchase stage. This can be accounted to the fact that consumers need a good website design and information to be attracted to a website and to easily navigate through the purchase system. Furthermore, the characteristics ‘ease of use’, ‘customization’ and ‘security’ are necessary during all the stages of the online buying process as they provide fundamental characteristics for a two-way communication and satisfying consumers.
It can be concluded that organizations can create customer e-loyalty via websites by providing a diverse range of satisfactory characteristics both online and offline. The Internet shows to be an adequate tool in relationship building as it provides the possibility of interactivity. This ensures a two-way communication that can contribute in e-satisfaction. The dialogue between the two parties allows companies to better meet the needs and wants of consumers due to the information exchange. Providing satisfactory value stimulates return visits and repeat purchases, which refers to e-loyalty. To ensure e-satisfaction and consequently e-loyalty, a firm needs to understand the diverse touch points with customers during the dialogue. Outlining the customer journey enables an organization to get an insight into the several features a website should offer throughout the online buying process. Diverse researchers showed several characteristics that contribute to e-satisfaction and e-loyalty. Most tools were only mentioned in one stage. ‘Design’ and ‘information’ were mentioned in both the pre-purchase and at-purchase stage. Notably, the characteristics‘easy navigation’, ‘customization’ and ‘security’ showed to be of importance during all the three stages of pre-purchase, at-purchase and post-purchase. It could be stated that these three are fundamental for a satisfactory two-way communication.
Thus, as shown in the conceptual model, websites should be developed offering several characteristics during the stages of the online buying process. Each stage with the corresponding characteristics will contribute to e-satisfaction and consequently e-loyalty. However, it has to be noted that within this article a focus was placed on one channel: the website. Organizations on the other hand often use a diverse range of channels that should provide a coherent customer experience within and across these channels. On a practical note, each organization and its website are different. This implies that the several characteristics should be tested to determine which tools are of importance to a particular case study.
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