Download Contemporary Logistics of Internet Marketing

Contemporary Logistics 07 (2012) 1838-739X
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Contemporary Logistics
journal homepage: www.seiofbluemountain.com
Analysis on Cultivation of Customer Loyalty in the Environment
of Internet Marketing
Cuimin ZHEN*, Lin JIANG
School of Economics and Management, Hebei Polytechnic University, 063009, P.R.China
KEYWORDS
ABSTRACT
Internet marketing,
Customer loyalty,
Strategy
In the environment of internet marketing, many businesses have gradually realized that
gaining and maintaining customer loyalty is its own important source of long-term profits.
This article firstly elaborates the connotation and importance of customer loyalty; then
constructs the model of influencing factor to customer loyalty and analysis the barriers of
customer loyalty’s formation; finally it proposes the strategy of raising the customer loyalty
and obtains the conclusion that customer loyalty does not only wins with the technology,
but also needs enterprise to improve its products and service progressively and establish the
relation with customer's emotion by the sincere manner and consummation service.
© ST. PLUM-BLOSSOM PRESS PTY LTD
1 Introduction
With the vigorous development of internet and electronic commerce, people's shopping behavior extends gradually from the
traditional entity store to the electronic store. Up to December 31, 2009, the Chinese web cam scale achieves 384,000,000 people;
network shopping user scale achieves 108 million at annual growth rate of 45.9%. The rapid development of online shopping, the
dramatic increase in the number of online stores, the customers can fully compare the products and services businesses with the
shortest time and energy have caused the network market compete steeply and establish and maintain the customer loyal with
difficulty. The network operators are very concerned about how to gain the customer loyalty. However, in academic, the research on
the customer loyalty is more in the United States and other developed countries in e-commerce, whether its concept and theory can
be transplanted to our country still waited for examining. In the customer loyalty’s formation mechanism and cultivation aspect,
empirical studies of domestic science are rare. Many researches are only based on experience summary in preliminary examination
and the perceptual judgment. Thus the value degree which should receive with the network customer loyalty is very asymmetrical.
2 Customer Loyalty’s Connotation and Important Meaning in the Environment
of Internet Marketing
The customer loyalty in the environment of internet marketing is also called electron loyalty, E-loyalty. E-loyalty is online customer
who approvals and trusts the electronic commerce of enterprise’s product and service, visits enterprise's website and purchases
enterprise's product and the service repeatedly, increases and enhances the business interest or image consciously. In other words,
*
English edition copyright © ST. PLUM-BLOSSOM PRESS PTY LTD
DOI: 10.5503/J.CL.2012.07.017
100
E-loyalty is that online customer who highly and loyally trusts the enterprise in the behavior, psychology and emotion.
Regardless of being the entity environment or the virtual environment, the cultivation and maintenance customer loyalty is critical
path to enterprise profit. Improving E-loyalty has the following important aspects:
2.1 Revenue grows continuously
The loyal customer will not only choose to purchase this enterprise's product or the service redundantly, but also may produce “the
overflow effect” to this enterprise, that is, the loyal customer will not only continue to purchase the original commodity, but also
increase commodity type in this enterprise.
2.2 Marketing costs decrease continuously
It usually needs much advertising costs to develop a new customer, but the loyal customer nearly does not need the propaganda to let
them purchase this electronic commerce enterprise's product or the service. The loyal customer who transacts routinely and is
familiar with enterprise's product and the flow will save enterprise's service cost.
2.3 Sets up enterprise image continuously
The loyal customer can become this electronic commerce enterprise “the missionary”, they will always strive to promote and
recommend enterprise products and services to the periphery person, and even they are willing to accept products or services which
they should pay a higher price. With the sharply growth of network advertisement, people will pay more attention to the
recommendation of friends and family when they decide to purchase.
2.4 Enterprises’ market position consolidates continuously
When the customer has produced loyalty to some electronic commerce enterprise, it will basically stop the behavior of searching the
related brand information, refuse to buy the business competitor's products or services, and provide valuable information to the
enterprise.
2.5 Enterprise develops in a long term and with stability
When the electronic commerce enterprise has a stable of loyal customers, its revenue will increase unceasingly; moreover, the
marketing expense which has been saved down will use in the improvement of product and service to attract more loyal customers,
and the huge loyal customer group may save more costs for the enterprise. Such kind of virtuous cycle would make the enterprise
develop chronically and stably.
3 The Barriers of Customer Loyalty’s Formation in the Environment of Internet
Marketing
Through the related research, it divides the factors into the direct drive factor, the intermediary factor and the adjustment factor
according to function way of the formation of customer loyalty. As shown in figure 1.
Perceived value
Network customer
satisfaction
Switching costs
Product quality
E- Loyal
Service quality
Customer personal
characteristics
Web site design
Network customer
trust
Network environment
Enterprise image
Figure 1 Factors on affecting the formation of customer loyalty
Based on the model of customer loyalty’s influencing factor, we can get the following barriers of customer loyalty’s formation in the
environment of internet marketing.
3.1 The security of virtual transaction cannot be guaranteed
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Customers’ value sensation about network product and service are not direct-viewing as the traditional business. Most customers are
still concerning about network product reliability, security and timeliness of online payment, privacy of individual information; they
cannot believe the seeing is true. They only depend on the network enterprise's image and pledge to make the shopping
decision-making.
3.2 Click the mouse to achieve the "hurdles"
When consumers are facing dazzling online product or service, they only need to click the mouse to "switch" from an enterprise to
another enterprise. The low search costs can change customer’s preferences frequently so as to find the best buying decision choice.
This feature greatly reduced the online customers’ loyalty to a particular site.
3.3 The “harsh” demand is not easy to satisfy
Online business activities have the obvious gap, risk and uncertainty. The consumer is unable to communicate with the sale service
face-to-face and cannot feel the commodity immediately. They cannot enjoy the satisfaction and joyfully of bargains. Simultaneously,
the high cost of networking products by mail without the guarantee of quality, and the long time of delivery etc. can lead to the
customer dissatisfaction.
4 The Strategy on Culturing Customer Loyalty in the Environment of Internet
Marketing
Based on the model of customer loyalty’s influencing factor, we can achieve the following strategies on cultivating customer loyalty
in the environment of internet marketing.
4.1 Enhance network customer's satisfaction degrees
4.1.1 Completes the ful-range service to the customer
Establishing and maintaining the network customer's loyalty must provide the transaction of full-range service. The complete
customer service system includes: implementation and engagement of pre-sale, sells, the post-sale service. The website should
guarantee that the website and customer's information communicate channel be unimpeded, they should understand the customer’s
demand accurately and quickly, and provide customers with customized services during pre-sale service; the website should provide
quick, convenient and comfortable communication for the customer, supply the more convenient payment ways to customers and the
allocation service according to customer needs and product features during selling service. The website must be able to consider the
questions that customer will possibly meet after product has been sold, and provide customers with feasible and satisfactory solution
that aims at these questions during post-sale service.
4.1.2 Constructs comfortable network shopping environment
The network enterprise should positively provide the environment which is similar with the entity shop to enable the customer obtain
physical and personal impression as far as possible. The website which is designed successfully should take the customer as the
center, update the website content regularly, establish a rich product catalog and product description to ensure the information do not
have errors, and pay attention to the design style of all different homepage be harmonious and unification. Moreover, it should
simplify the operation flow for convenient shopping. Such as provide search engines to help customers find goods what he needs
quickly, provide navigation systems to let customer know where he is, provide the memory function to let customer place orders
quickly to avoid inputting related information redundantly during each order. In short, we must provide sufficient information and
tools for the customer to make the buying process more convenient.
4.1.3 Set up a good image of enterprise
Setting up a good image is the prerequisite for the maintenance of E-Loyalty. Firstly, the enterprise should ensure that commodity
provided be quality, consistency, timeliness. The quality means the quality of commodity must good; consistency is the online
description of the goods and the actual provision of goods should be consistent; Timeliness is the speed of delivery should be in time.
Secondly, the network enterprise's domain name must be bright and succinct. As the network enterprise, it is a positive way to attract
customers to let them familiar with own domain name to find own website easily in the Internet. Finally, the network enterprise
should promote enterprise's prestige. The network marketing is not the direct money exchange; customers cannot easily use this
trading method if enterprises do not have a very good reputation. Therefore, enterprises should treat every customer’s assessment and
recommendations correctly.
4.1.4 Implements the personalized network marketing
In personalized demand time, the enterprise must grasp opportunities to provide personalized goods and service. Enterprises can use
the following two forms to provide personalized service: ①Enterprise site recommends personalized service; according to their
database records of customer information and intelligent software, enterprise site infers customers need and preferences in order to
provide different customers for different services. ② Customers help personalized service themselves. According to their
preferences, customers select the service or the service combination provided by the website freely. The enterprise should respect the
uniqueness of customer and let the customer lead own expense experience and feeling.
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4.2 Enhance network customer's trust
Trust is a prerequisite for customer loyalty; the enterprise which only considers truly for the customer benefit and reduces customer's
sensation risk can obtain customer trust and win customer loyalty really. Therefore, firstly, the enterprises must ensure the quality of
sold products and service quality. This is the most basic conditions for building confidence. Secondly, it must ensure the security of
transaction process such as customer registration information and online chatting data. The network enterprise must invest sufficient
human and material resources and strengthen the hardware and software's construction to guarantee the security of online
transactions and the confidentiality of personal information. Finally, the network enterprise should fulfill the contract accurately and
promptly. For the network enterprise, delivery the customer specified products to designate location timely must unify its online
service and net's delivery service system.
4.3 Increase customer's switching costs
Switching costs will gradually decrease while the network environment improving progressively. Hence, the website enterprise
should enhance the customer switching costs and establish the barrier of customer transfer. Firstly, the site could take shopping points,
discounts, membership and other promotional activities. The focus should be on retaining old customers and the preferential to attract
new customers should not large in order to avoid attracting the price sensitivity and relatively low-value customers, meanwhile it
must be on the basis of not letting old customers have discontent and unfair feeling. Secondly, establishing the emotion relation
through contacting with customer directly and indirectly is the most important way to establish the barrier of customer transfer.
Because the economic benefits may be perishable, the emotional connection between the customers will continue.
4.4 Establish a complete customer information system
Different customers have different customer value, E-trust and so on. If the enterprise attempts to cater to all customers’ demand, this
will result in great difficulties to the website marketing work. Firstly, the enterprises should establish the customer file accordance
with the customer's individual characteristics, network experience and so on. According to the customer file, the enterprise should
carry on the classification to the customer and identify the customer who is the most profitable and most worth preserving from
numerous customers. Secondly, improve the customer information system in view of the goal customer. Through the customer
information system's establishment and consummation, the enterprise can understand customer's demand fully and provide a better
service for the customer.
4.5 Improve the entire network environment continually
The environmental factor is an important restriction factor on increasing customer confidence. If the entire network consumer
environment has the remarkable improvement, it will be advantageous in promoting customer's network trust. To have a good
network environment, firstly we must have a secure and reliable communication network to ensure transaction information delivery
safely and promptly. The electronic commerce website can establish the correspondence trust through the investment of infrastructure
construction as soon as possible; Secondly, the government should establish and improve the relevant legal system, improve the
relevant restraint mechanism, establish the authority of the enterprise credit evaluation system, raise the entire social truth standard
and so on measures to enhance the security of online shopping; Thirdly, enterprises must abide by credit and gain the trust of
customers. It should ensure the provided commodity high quality, timeliness, consistency; strengthen the cooperation with logistics
companies, guarantee database server absolute safety to prevent hackers from intruding the network to steal the information, and
guarantee customer's individual privacy is not public to the third party before its agreement in order to create the network credit
atmosphere.
5 Conclusions
In the era of network marketing, the electronic commerce enterprise wants to maintain the competitive edge in the complex global
competition must regard the customer as a core, to nurture and retain loyal customers. Loyal customer is not only the important
determinant factor to company’s competitiveness, but also a significant source of corporate long-term profits, it is the foundation of
enterprise's survival. In the era of network marketing, customer loyal doesn’t only win with the technology purely, but also requires
enterprises to improve their products and services continuously and establish the link with customer's emotion by the sincere attitude
and perfect service.
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