Customer Loyalty and Privacy on the Web

ABSTRACT

This study examines from simulation the effects of the privacy sensitivity of customers, the personalization practices or standards of retailers and the difficulty in locating favorable sites on the loyalty of consumers to a Web site. The key finding of the study is that customer privacy sensitivity is a critical success factor that significantly impacts loyalty to a retailer. Customers have higher loyalty to sites that request the least information, while they have lower loyalty to sites that request the most information. Web retailers considering expanded personalization of products or services to customers, through increased personal information, need to rethink their practices. The study also found that difficulty in locating a favorable site is a success factor that impacts retailer loyalty, and that customers have higher loyalty to difficult to locate favorable sites on the Web. These findings are important at a time when consumers are empowered with Web technology to immediately shop competitor sites.     

Cues of credibility and price performance of life insurance comparison Web sites

An array of Web sites is available to help consumers find the best deals on products and services. While these sites have the potential to save time and money by directly comparing alternatives, consumers still have the task of assessing the credibility of these comparison sites. Experts recommend that consumers look for certain key disclosures or “cues” to assess a site's credibility (e.g., a site's identity, the currency and authoritativeness of its information, its sponsors and business relationships, and its privacy practices). Focusing on 32 life insurance comparison Web sites, this research found that these recommended cues are often not present on Web sites and, when they are, do not seem to predict a site's ability to deliver the lowest‐priced quotes for term life insurance policies.     

Impact of Consistency in Customer Relationship Management on E-Commerce Shopper Preferences

Customer Relationship Management (CRM) in e-commerce is concerned with retaining the existing customers on a long-term basis, motivating them to come back to shop for more and to talk positively to their peers about the products and services provided. Fourteen items have been identified in a developed questionnaire to measure CRM factors in consistency of customer treatment. They are consistencies of: price-quoting, steps to execute a transaction, design of the shopping Web page, site navigation, promotions offered, indication of in-stock products, product variety, alternative product suggestions, fraud protection, presented guarantees involving the product, fairness of the site, help offered, return policies, and personal information. To determine the validity of the items, 100 e-commerce experts from academia were presented the questionnaire and asked to rate the importance of the individual items. The developed tool had a Cronbach's Alpha internal consistency value of 0.81. A multivariate analysis was conducted to cluster the aspects of consistency in CRM. For this purpose, two factors were identified: Technical and Customer Treatment Factors. The individual Cronbach's Alpha values were 0.84 for Treatment Factor and 0.74 for Technical Factor. The analysis indicated that the Technical Factor included the consistencies of shopping steps, site design, and navigation, while the Customer Treatment Factor included the consistencies of promotions, in-stock indication, product variety, fraud protection, presented guarantees, customer fairness, and return policies. Based on the analysis, 10 guidelines for Consistency in CRM were produced. The guidelines can be applied to Business-to-Consumer (B2C) e-commerce sites as part of their CRM policy.     

Consumer Intentions to Revisit Online Retailers: A Mental Imagery Account

The current research explores the role of Web site characteristics, such as animation and iconic navigation aids, in predicting consumers’ self‐reported intentions to revisit a retailer's Web site. An experimental study (n = 339) shows that Web site characteristics do not affect revisit intentions directly but through the vividness of mental images that consumers hold of the Web site as a whole. Vivid mental Web site imagery is stimulated by animation and facilitated by individual tendencies to put faith in intuitive rather than rational thinking, while it does not relate to the use of icons in navigation. The implications of these findings for researchers, Web designers and marketers are discussed.     

Effects of online communication practices on consumer perceptions of performance uncertainty for search and experience goods

The “intangible” nature of e-commerce may cause shoppers to be uncertain about whether products ordered online will fit their needs or perform up to expectations. Such uncertainty is a dimension of consumer risk, or feelings that result because the actual outcome of a purchase decision can only be known in the future. However, the ability of e-retailers to offer a plethora of product-related information can ameliorate this uncertainty. This research assesses the influence of three online retailer communication practices—evoking vividness through pictures, allowing consumers to control information presentation, and presenting information from third-party sources. We demonstrate that these practices materially affect consumer perceptions of product performance uncertainty. Importantly, we also find that the influence of the practices differs by the search or experience orientation of the product, sometimes in counterintuitive ways. These results can serve to help enhance the effectiveness of e-retailers’ communications and, in the case of multichannel retailers, help determine which products are best suited for different channels.     

Eye-tracking evidence that happy faces impair verbal message comprehension: the case of health warnings in direct-to-consumer pharmaceutical television commercials

Risk warning or disclosure information in advertising is only effective in correcting consumers’ judgments if enough cognitive capacity is available to process that information. Hence, comprehension of verbal warnings in TV commercials may suffer if accompanied by positive visual elements. This research addresses this concern about cross-modality interference in the context of direct-to-consumer (DTC) pharmaceutical commercials in the United States by experimentally testing whether positive facial expressions reduce consumers’ understanding of the mandated health warning. A content analysis of a sample of DTC commercials reveals that positive facial expressions are more prevalent during the verbal warning act of the commercials than during the other acts. An eye-tracking experiment conducted with specially produced DTC commercials, which vary the valence of characters’ facial expressions during the health warning, provides evidence that happy faces reduce objective comprehension of the warning.     

Promises,Promises: How Consumers Respond to Warranties in Internet Retailing

Past studies have shown that perceived risk is a critical determinant of purchase intention in non–store retailing contexts, including Internet retailing. Extant literature in physical retailing suggests that warranties can be a significant variable in reducing consumers’ perceived risk. We examine the role of Web site warranties in risk reduction and how warranty information interacts with retailer reputation and brand name as two other risk relievers in an online shopping environment. Results suggest that warranties can make a positive difference for online retailers with strong reputations with respect to perceived risk, perceived product quality, and purchase intentions. However, consumers are less influenced by warranty information when dealing with online retailers with weak reputations. For the other extrinsic cue, however, we find that warranty information does not have an effect when dealing with brand names, suggesting that a brand name’s impact on online risk reduction remains regardless of the presence of warranty information.     

How Hand Proximity Impacts Consumer Responses to a Persuasive Communication

This research examines the impact of hand proximity (i.e., proximal or distal) on how consumers process the information contained in an advertisement or on a product Web site. Four studies demonstrate that when hands are proximal to that information (e.g., when using a mobile device to view the information), there is more detail‐oriented processing that results in greater attribute recall and a greater amount of attribute‐related thoughts. When hands are distal to that information (e.g., when using a desktop to view the ad or product Web site), there is more holistic, conceptually oriented processing that results in greater thematic recall and more thoughts about the theme. This research also demonstrates that hand proximity can differentially impact choice and product evaluations. Specifically, when hands are proximal consumers prefer ads communicating detailed product information; when hands are distal consumers prefer ads that focus on a theme. Hand proximity effects are driven by the innate tendency to manipulate or inspect an item. The research has important practical implications, given the ubiquity of both hand‐held devices and computers.     

Creating Retail Web Sites for Different Consumer Shopping Orientations

Abstract

As the number of Web sites continues to expand and consumers increase their use of the Internet, companies must find ways to convert visitors to buyers and boost return visits to their sites. Most sources that offer guidelines for developing Web sites assume that all Internet shoppers are the same. An examination of customers' shopping orientations would, however, indicate that this is unlikely to be the case. To develop a more effective Web site, it is important to consider the shopping orientations of the target market. This article describes five different shopping orientations and offers ways to address these differences when creating a Web site.     

Measuring the Value of Corporate Web Sites

ABSTRACT

As marketing executives respond to increased pressure to measure the impact of their activities, corporate Web sites can be a useful tool in measuring marketing performance. This study presents the results of a series of interviews with Web site managers aimed at describing the most common methods of determining the value contribution of corporate Web sites. However, despite the availability of large amounts of site usage data, Web site performance measurement tends to be performed ad hoc by most organizations, and there is little assessment of the relationship between the performance of a company's external Web site and overall corporate results or increase in shareholder value.     

An Investigation of Factors Contributing to Consumer Brand Confusion

The courts regularly address the question of whether an imitating mark or product is likely to confuse consumers and thus harm the owner of the mark. Consumers, however, can also be harmed by brand confusion. The results of this study reveal whether individual characteristics might predispose consumers to confusion and why some consumers appear more likely to become confused than others. A better understanding of why they may become confused can help both firms and overseer bodies, like the FTC, formulate more focused policies to help prevent this harm.     

Web Perception and Young Consumers: An Empirical Investigation of Factors Influencing Perceptions of Online Companies

ABSTRACT

The purpose of this study is to identify and empirically test factors important to building a positive Web perception among young consumers. Factors that affect Web perception are divided into Web design, vendor, and product/service groups. Based on regression analysis we found that Web design and product/service characteristics play the most important roles in developing a positive Web perception among young consumers. More specifically, online vendors must provide a vast selection of products that are of high quality, and their sites must be fast, easy to navigate, contain relevant information, and allow ease of ordering.     

The effect of information overload on consumer choice quality in an on‐line environment

As more and more consumers become part of the net population, retailers and manufacturers as well as dot‐com storefronts are touting consumers by providing an ever‐increasing amount of product information. Their long‐term survival and profitability may be determined by how much and how well their product information is presented to and processed by the consumers. By combining both the traditional and structural approaches to the information‐overload phenomenon, this study investigates the impact of Web site information on consumer choice and psychological states in an on‐line environment. Varying the number of alternatives and attributes (traditional measure) and attribute level distribution across alternatives (structural measure), this study asks subjects to choose the best (dominant) CD player in a given set. Their subjective states such as satisfaction, confidence, and confusion are also measured. Results show that the number of attributes and attribute level distribution are good predictors of the effect of information overload on consumer choice. In addition, the study finds that on‐line information overload results in less satisfied, less confident, and more confused consumers. Implications and suggestions for future research are provided. © 2004 Wiley Periodicals, Inc.     

A New Architecture for Personalization Engines: An Open Source Approach

There are many benefits in having personalized engines on a Web site. Several types of architecture have evolved to support this information system. Even though, a recent survey has shown that online shopping behavior is not altered by installing these systems on a Web site, enormous money is being spent on their use. These commercial personalization engines are very expensive to buy and are proprietary in nature. One alternative advocated in this article is to use a new architecture that follows an open source philosophy and uses a situation questions, problem questions, implication questions, need-payoff questions (SPIN) based question-answering strategy to interact with visitors. An implementation (called JESPER, a Jess-enabled personalization system) of such an architecture using JESS (Java-based expert system shell) is also presented. Our experience shows that personalization engines built this way for a Web site can be quite cheap and rigorous.     

Company reputation and its influence on consumer trust in response to ongoing CSR communication

There is considerable disagreement in academic scholarship and beyond as to whether, in cases of bad reputations, companies will want to communicate corporate social responsibility (CSR) activities because this kind of communication is likely to increase consumers’ skepticism. In this regard, the two empirical studies discussed in this article examine the influence of prior company reputation on consumers’ trust in response to CSR communication in general and the development in response to continuous CSR activities and their ongoing communication by companies as well as by the media in particular. The two studies show that consumers’ trust in companies’ CSR activities increases after a second presentation of information by companies even in instances when companies had prior negative reputations. The second study in particular fills a gap in the literature on underlying mechanisms of consumers’ reactions to CSR communication. The results suggest that companies with prior negative reputations do not need to remain silent about their CSR activities; instead, CSR communication can help improve consumers’ trust in companies. However, the findings of these two studies also suggest that this positive development is short-lived. Consumers’ developing trust in companies’ CSR activities decreases significantly if they are exposed to negative information on these companies.