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A Model of Customer Retention in Business-Intensive Markets

  • Manlio Del Giudice
  • Maria Rosaria Della Peruta
Chapter
Part of the Palgrave Studies in Democracy, Innovation, and Entrepreneurship for Growth book series (DIG)

Abstract

At the dawn of e-commerce, there was a common feeling that it was senseless to talk about loyalty: it was believed that with the Internet, the ease of switching from one shop to another, and the opportunity to explore purchase alternatives in a very short time worldwide, would have discouraged any attempt by businesses to implement an e-loyalty strategy (Chen & Hitt, 2000; Jones, Motherbaugh & Beatty, 2000; Xu, Goedegebuure, & van der Heijden, 2006). Such a belief, however, was challenged by empirical evidence that Internet users visit their virtual stores much more often than any other traditional store (Inman, Winer, & Ferraro, 2009; Kaltcheva & Weitz, 2006; Adam, Dogramaci, Gangopadhyay & Yesha, 1999; Agrawal, Arjona & Lemmens, 2001; Allen, Kania & Yaeckel, 1998; Amit & Zott, 2001; Anderson, 2002; Bakos, 1997; Cameron, 1999; Brynjolfsson & Smith, 2000; Zwass, 1998 ). Moreover, the real explosion of e-commerce during the early years of the new economy led Internet companies to not deal at first with customer loyalty. Today, the situation of online markets is quite different: strong competition on the Web has encouraged businesses to take on a more critical and rational analysis of Internet marketing strategies, coming to the conclusion that in order to make a profit, traffic generation is not sufficient. Unlike the early diffusion of Internet technology, the success of a website does not depend on the number of visits but essentially on the frequency of use and its ability to “retain” customers, minimizing the churn rate (Shankar, Smith, & Rangaswamy, 2003; Zhang & He, 2012). The model developed in this study focuses, as anticipated, on business-to-business (B2B) online customer experience, empirically testing the resistance to change of a typically unloyal business customer, consistently with the possession of a shopping script induced by the supplier. Instrumental to this model is the definition of online loyalty (e-loyalty); as in offline markets, loyalty has a dual nature, behavioral and cognitive, this is also true in the case of e-loyalty (online loyalty), the two dimensions of which are kept strictly separate: e-retention and e-fidelity. The former concerns the inertial forms of loyalty, that is, repeated purchasing behavior somehow forced and not accompanied by an adequate satisfaction and emotional involvement. Thus, e-retention indicates the pure and simple behavioral aspect of loyalty that, only if combined with adequate mental fidelity (e-fidelity), turns into e-loyalty. The inertial forms of loyalty are represented by all those cases in which a customer is forced to stay on a certain website because of:
  • the high level of switching costs;

  • the lack of presence or absence of competition.

Keywords

Association Rule Switching Cost Data Warehouse Customer Loyalty Virtual Community 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Authors and Affiliations

  • Manlio Del Giudice
    • 1
  • Maria Rosaria Della Peruta
    • 2
  1. 1.International Business AdministrationLink Campus University International Business AdministrationNaplesItaly
  2. 2.Faculty of EconomicsSecond University of Naples Faculty of EconomicsNaplesItaly

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