Trust + Value + Loyalty = Successful Relational Online Exchange

Consumer Trust, Value, and Loyalty in Relational Exchanges

Sirdeshmukh, Singh and Sabol (2002) conducted a survey to develop a framework on how companies can build or deplete consumers trust depending on the services and mechanisms they use on developing a relationship with customers, in order to provide value and gain loyalty.

How these can be gained online is revealed further down.

The authors defend the argument that trust exist when one part has confidence in the exchange partner’s reliability. When it comes to online business, at the beginning is a difficult to transmit confidence to the stakeholder, but it can be gained with a good website.

Customers also make judgments about the frontline employee (sales persons) and management policies and practices during the exchange services. Applied online, the frontline employees disappear and what it makes their function is the website, its distribution, how attractive it is for internet user, the facilities it gives them to surf on the page. While the management policies and practices are the interaction with stakeholders if they have inquiries, the payment options or the service provided on the delivery.

The authors also argue that the satisfaction is mostly sensitive to interactional factors, which contributes uniquely for trust relationship to be built.

There are different relationship with the organization, Interpersonal relations with sales person and stores loyalty. The authors support that sales person are more trusted than store for those people who have strong interpersonal ties, on the other hand, people who don’t have interpersonal ties, are more loyal to stores. People who are price sensitive will care more about stores where they can buy things cheaply rather than other people who care more about quality and services.

The same pattern can be applied online as well - there are also people who care more about price than quality or service.

The overall satisfaction with a service has three different facets: the contact person (online is the website), core service (online the facilities provided to customers) and the organization.

Dimensions of trustworthy Behaviours and Practices and Their Effects on Trust

Operational competence is a visible behaviour; it is an indicator of service actions, degree to which partners perceive each other as having the skills, abilities, and knowledge necessary for effective task performance.

In the online world the operational competences is based on the interaction with customers, trying to solve their problems interacting online.

Operational benevolence is the underlining motivation to place the consumer's interest ahead of self-interest. Online this is difficult to transmit, the only way to do it is developing a good relationship and accomplishing the deals with customers offering them the service requested, the customers will perceive the companies "goodwill" which can be transmitted from customer to customer using blogs for example or word of mouth.

Problem-solving orientation is the management motivation to anticipate and resolve problems in a satisfactory way, to resolve problems during and after the service. Online this means to solve customers’ problems to find what they want, its delivery, payment or technical issues. And then find a solution not to repeat them again.

Consumer trust and loyalty

In conclusion, when providers act in a way that consumer trusts, the perceived risk with the specific service is likely to be reduced and thus enable consumer to make confident predictions about the provider's future behaviours.

Trust also influences loyalty by affecting the consumer's perception of congruence in values with the provider. When there is perceived similarity between the firm and the consumer values, the relationship is enhanced, promoting reciprocity and contributing to long-term commitment.

Loyalty is regulated by the consumer's goal of value, and the authors posit that trust will effects loyalty through its influence in creating value.

Trust and loyalty are vitally important for company’s reputation to be built both off and online. However, building them online is more difficult because of the lack of face-to-face communication but could be overcome with a useful and interactive website.


References:

Sirdeshmukh, D., Singh, J., and Sabol, B. (2002). Customer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66, 15-37.

Key Factors For A Successful Web-Site

The explosive growth of the Internet led to utilizing the Web pages as an important area of digital communication. Very often, when browsing on Internet, web sites are the cues that provide first impression of a certain organisation. Furthermore, these online spaces are sometimes crucial to either weaken or strengthen company’s reputation. When a person opens a web site, it probably takes few seconds for the first impression to be created, and the user will either stay or move on to the next site on the basis of many factors.

Knowing the purpose and objectives of the Site help to determine what it can be offered to the customers and how the site structure will achieve it. Design priorities allow companies to match customers’ needs: purchase a product/service, find information, save money/time, or talk to the organization (Chaffey and Smith 2005).

But, what factors determine whether a Website is good or bad and encourage visitors back again and again? Previous research showed that product visibility and the use of search engines is a key element (Rowley 2000). Kolesar and Galbraith (2000) stick for the easy to use aspect while the structure and how the information is linked within the page was studied by Ceri et al. (2000). Few years later, Huarng and Christopher (2003) refer to information search tools as key elements for a good design whereas Siddiqui et al. (2003) analyzed the navigational issues. For the purpose of this article usability and accessibility will be discussed.





Usability refers to how easy the web site is for everyone to use without errors, accessing the information as quickly as possible in order to provide satisfaction (Yates 2005). This term is vital for the success; if the website is difficult to use, the homepage does not explain properly what business you are in, if the information is not clear and the user get lost, people switch off to another site (Chaffey and Smith 2005). Elements such as the time that takes to complete a task, sometimes appeal more to the customers than the speed to download something. Appearance and design are important but they will never replace usability, and any website lack of it will not be able to keep or encourage new visitors.

Accessibility refers to all barrier-free characteristics of the website that allow visitors interact with it regardless of the disabilities they may have (Yates 2005). Usability and accessibility complement each other and sometimes overlap because if someone can´t access the website obviously they can´t use it neither (BLOG). The next model adapted from Webdale (2003) shows the relationship between usability and accessibility to improve the user experience.



Accessibility requires management support and trained staff to integrate these elements into their web strategies. Despite the cost exercise to improve accessibility, the benefits associated for all stakeholders and customers prove that is necessary to implement it together with usability in order to create an effective site (Yates 2005).


REFERENCES
Rowley, J. (2000) “Product search in e-shopping: a review and research propositions”, Journal of Consumer Marketing, 17 (1), 20-35.

Kolesar, M. and Galbraith, R. (2000) “A services-marketing perspective on e-retailing: implications for e-retailers and directions for further research”, Internet Research: Electronic Networking Applications and Policy, 10 (5), 424-38.

Ceri, S., Fraternali, P. and Bongio, A. (2000) “Web modeling language (WebML): a modeling language for designing web sites”, Computer Networks, 33, 137-57.

Huarng, A. and Christopher, D. (2003) “Planning an effective internet retail store”, Marketing Intelligence and Planning, 21 (4), 230-8.

Siddiqui, N., O’Malley, A., McColl, J. and Birtwistle, G. (2003) “Retailer and consumer perceptions of online fashion retailers: web site design issues”, Journal of Fashion Marketing and Management, 7 (4), 345-55.

Webdale, J. (2003) Accessibility [online] available from<> [31 April 2010].
http://vandelaydesign.com/blog/web-development/success-factors/

USABILITY NEWS:
http://www.usabilitynews.com/
USABILITY RESOURCES:
http://www.usabilityfirst.com/
ACCESSIBILITY GUIDELINES:
www.w3.org/WAI

100 Killer Web Accessibility Resources.
http://whdb.com/2008/100-killer-web-accessibility-resources-blogs-forums-and-tutorials/

What Everybody Ought to Know About Usability and Web Design.
http://www.blogdesignblog.com/blog-design/usablity-web-design/

Trust


Trust in e-business: A key factor for your e-business?

A lot of research has been done so that the term trust to be defined. Scholars from variety of backgrounds, including psychology, sociology and marketing, have tried to identify its meaning - as a word, and as a factor that influences relationship between individuals (Buttner and Goritz 2008).
Trust has been described by Mayer et al. (1995) in two dimensions. Firstly, they consider it as willingness for risk to be undertaken. Therefore, it is a prerequisite for the trustor to be vulnerable and not having control over the action of the trustee. Secondly, trust is being examined with respect to its relationship with trustworthiness. In this point of view, trust represents trustor’s beliefs as to whether the trustee possesses certain qualities or not.
As it concerns the relationship trustor - trustee, three dimensions have been outlined as crucial ones so that this relationship to be established and transformed to a long term one. These are as follows: competence (is the trustee competent to fulfil what they have promised); Integrity (do they adhere to principles desired by the trustor); and benevolence (is the trustee interested in the trustor’s well-fare).
In addition, Mayer et al.(1995) also claim that trustworthiness depends on the level of trust, which on its turn defines the intention of a person to engage themselves in a market transaction and buy or not. So, the more a transaction is perceived to be a risky one, the more trust should have been possessed by the buyer if he / she is to be won as a customer.
This is in force in the off-line transactions. However, it is even of greater importance in the online space. Trust is a significant factor of an online relationship with customers because they ‘’live in a dangerous environment of privacy invasion and identity theft’’ (Chaffey and Smith 2008).
In a research implemented by Morgan and Hunt (1994), trust has been identified as one of the main factors for a relationship marketing to be built; it refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.
Furthermore, the authors have stated that there are some different prerequisites that lead people to trust each other, or not, during interaction. The following have been presented as ones of necessity for trust to be built:
  • People only trust those who have demonstrated their trustworthiness.

  • Different people, with different background and experiences, personalities and cultures have different levels of propensity to trust.

  • People trust people because of their behaviours.

Similarly, taking into consideration a b2b relationship in the online world, trust is difficult to be achieved, firstly because buyers have incomplete information about the suppliers. The only way, in which the supplier could gain customer’s trust successfully, is filling in the information gaps which customers can find (Koh, Fichman and Kraut 2009). Buyer’s trust towards the supplier can also be built through the accumulation of knowledge about the supplier; knowledge is developed through direct and repeated interaction between the buyer and supplier (Koh, Fichman and Kraut 2009).
Online purchase differs from a typical purchase experience ‘in a real life stores’. The typical purchase store offers costumer something tangible which eases the process of buying. On the other hand, the purchase online is more elaborated, users compare products, characteristics, prices, other people’s opinion and comparison with numerous of different web sites before coming up with a final purchase decision.
As this online purchase is rather more complicated companies have access to different online tools in order to attract customer. Some of these different tools are: social networks, blogs and word of mouth. One example of this marketing strategy is the one that Ford used to promote the ford fiesta and re-earn the trust of the American public.





In any case, trust is something difficult to be built, it takes a long time for customers to engage themselves with a company; much effort should be put on communication so that clients to be motivated to repeated the buying decision . However difficult might be for trust to be built, it is very easy to be lost; a simple mistake or a company getting bad reputation can cause the customers to switch off to a competitor, that is more trustworthy and better satisfy their needs. Additionally as Ofuonye et al (2009) figured on their research there are some critical factors that affect trust inside an e-commerce website. Whoever successfully deals with these factors then more easily can attract people on his e-business:
  • Usefulness. How relevant is a website helping users to achieve their goal?

  • Ease of use. Are the costumers able to find the product they want to buy?

  • Benevolence. Will the website act according to the user’s best interest?

  • Competence. Is the website author possesses adequate skills, knowledge and abilities to perform the tasks that the users request?

  • Integrity does the website exhibit honesty and ethical behaviour?

  • Risk. Is there any potentially negative impact on using the website services?

  • Reputation. Do external parties have relevant opinion about the website or their previous experiences?

Moreover there are also some significant factors that are crucial in order to build trust. Factors such as:
  • Security.

  • When user’s purchases on the site are their personal details expose to third parties?

  • Credibility. Is the website adhering to organisations with a good reputation?

  • Reliability. Are the website authors doing what they promise?

  • Communication. Are there attempts in order to communicate with the customer?

  • Consistency. Is the company delivering the service regular and with the same or better service to the customer?

Much research has been focused on the trust-building strategies; But what role trust plays when a negative feedback about your business need to be repaired? A recent study examine this fact and what where the implications for the company ebay that suffered of bad reputation due to its customers’ feedback. The authors found that reparation of trust is possible. Apologies were more successful than denials because these weren’t perceived as believable. Even short apologies can convince customers to trust the company again (Utz, Matzat and Snijders 2009).
To conclude it can be said that online markets are noisy and face serious problems of trust between buyers and sellers. Consumers only see the products, but they can’t touch them. If they need support or have any questions the ability to respond them is limited. Because of this is very easy to switch off and go to another online shop (Hanai and Oguchi 2009).


REFERENCES
Buttner, O. and Goritz, A. (2008) ‘Perceived Trustworthiness Of online Shops’, Journal of Consumer Behaviour 7, 35 - 50
Chaffey, D. and Smith P. (2008) E Marketing Excellence. Oxford: Elsevier Ltd
Hanai, T., and Oguchi, T. (2009) How do consumers perceive the reliability of online shops?. Cyberpsychology: Journal of Psychosocial Research on Cyberspace, [online] 3(2). Available from<http://cyberpsychology.eu/view.php?cisloclanku=2009111002&article=6>[12 March 2010]
Koh, T, Fichman, M. and Kraut, R 2009. Trust Across Borders: Buyer-Supplier Trust In Global B2B e-commerce. Academy of Management Proceedings, [online], 1-6. Available from <http://web.ebscohost.com/ehost/pdf?vid=11&hid=13&sid=94b0dcfa-f6fd-42d9-9c71-d97889555c27%40sessionmgr4>[10 March 2010]
Mayer, R., Davis, J. and Schoorman, D. (1995) ‘An Integrative Model of Organisational Trust’, Academy of Management Review 20 (3), 709 – 734
Morgan, R. and Hunt, S. (1994) ‘The Commitment-Trust Theory of Relationship Marketing’, Journal of Marketing 58 (3), 20 - 39
Ofuonye, E, Beatty, P, Reay, I, Dick, S, Miller, J. (2008). How Do We Build Trust into E-commerce Web Sites? IEEE Software, [online] 25 (5), 7-9. Available from <http://www.computer.org/portal/web/csdl/magazines/software#4 >[10 March 2010]
Utz, S., Matzat, U., and Snijders, C. (2009) On-line Reputation Systems: The Effects of Feedback Comments and Reactions on Building and Rebuilding Trust in On-line Auctions’, International Journal of Electronic Commerce, 13, (3), 95–118.

GENERATION Z

Whatever you call them- Generation-Z, Net- Generation, Silent generation, Generation-Web or I-Generation- they are the most mobile and explorative generation that has ever existed, considering the children and teenagers born after 1995. More than any previous generation, today's young people are plugged in -- all the time -- with a world of communication and information at their fingertips. As long as our children will experience different childhood than we have had it is interesting to explore the Net- Generation. From marketing point of view they make up for nearly 18 percent of the world’s population. That was one of the topics discused in "the virtual revolution", a documentary of BBC.




WHO ARE GENERATION Z?

-Gen Z are those people born from 1995 to the end of 2009

-They are the next generation after Gen Y (today’s teenage and twentysomethings)

-They are today’s children and students, and tomorrow’s employees and leaders

-They are the world’s first 21st Century generation - the digital natives, the dot com kids, Generation Media

-They are today’s emerging generation who resemble children of any era past, yet they personify our future

-They were born into smaller families - and they have the fewest siblings of any era

-They were born to older mums - whose median age is now approximately 33

-They are the up-ageing generation. They are growing up faster. They are in education earlier. They are being exposed to marketing younger

-Events & Experiences: While today they are not in the workforce, within a decade they will comprise 10% of the workforce. And they will be entering the workforce in an era of declining supply: more people exiting the workforce than entering it. And so for Gen Z the skills shortages, the ageing population and the global demand for labour will continue to empower them


Unfortunately the risk young person to be obsessed by the technology occurs. For instance Samantha, now 13,performs worse than before on her exams and she is addicted with texting, Facebook and her laptop (Italie 2010). Sometimes she falls asleep in her clothes clutching her phone and when texting exceeded 2,000 messages a day her parents banned the function from 9.00 pm to 6.00am. As a consequence the child started to behave unstable- slams doors, breaks things, does not speak with her parents.

Moreover, from same resource, this obsession can be scary and funny including “a high school junior who took to urinating in a bottle while playing online and a college kid who shaved his head to save time on hair washing in the shower so he could return to the computer more quickly”, and how mother from Dallas, Texas locks her children`s laptops in her car during the night.

According with the news (The Sunday Telegraph 2009) in Australia there are already talks about Generation Alpha- the newest and which follows Gen X, Gen Y, even Gen Z- and contains the population born after 2010. Generation Alpha takes the reins from Gen Z - those born since 1995. People expect the future population to be more materialistic and technology-focused, work longer and have an average of five careers and 20 different employers in their lifetimes. "These 'Google' kids are really being shaped in a world of technology and consumerism."

Internet changes the way we think as well- now we grab information from more different resources. As Nicholas Carr (Choney 2010) noticed his "mind now expects to take in information the way the Net distributes it: in a swiftly moving stream of particles. Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski ".




The Internet is there and Gen Z take it for granted. They do not consider it to be the greatest tool for mankind as it has always been there for them. . They are the children of the modern world and are also called the digital generation. They also are growing up in a world of equality and they believe men and women are equals. This generation has embraced technology and also they are highly dependent on it. If generation Z is molded properly, they can achieve a lot more than their earlier generations using the digital media. Beyond 2020, there could be drastic changes in work culture, ethics and even values that will be set forth by the generation Z.

 References:

 Matthews, V (2008) Generation Z, The Employees of the Future. Jounal Personnel Today, 13 (4), 48-52
 
Choney, S. (2010) Internet Making Our Brains Different, Not Dumb [online]. Available from http://www.msnbc.msn.com/id/35464896/ns/technology_and_science-tech_and_gadgets/[03.03.2010]

Italie, L. (2010) Tech Use up with Kids; Parents Losing Ground [online]. Available from http://www.msnbc.msn.com/id/35099639/ns/technology_and_science_tech_and_gadgets/ [03.03.2010]

The Sunday Telegraph (2009) Babies Born from 2010 to Form Generation Alpha [online]. Available from http://www.news.com.au/features/babies-born-from-2010-to-form-generation-alpha/story-e6frfl49-1225797766713 [03.03.2010]

If you think what e-marketing is, READ THIS!


When people hear the word e-marketing, another word comes to their minds: Internet.

But e-marketing is about much more than just Internet.

It comprises other technologies that enable customer relationship management (CRM), supply chain management, resource planning, digital TV and bar code scanners. E-marketing helps your company to use digital resources to sell your products and services, as a way to entrance in the mass market at reasonable prices.

Nowadays Internet is a basic source of information, a key element of the global economy and a major driver for new business, it offers the opportunity to reduce cost compared with the cost of traditional marketing. Online advertising and promotions can provide both value for money and accountability in terms of insight into the success of particular campaigns.

E-marketing is growing faster than any other form of marketing being a value complement to traditional marketing regardless the size of the business.
It has impacted upon the barriers to export entry and has provided hope to millions of small and medium sized enterprises (SMEs) attempting to enter foreign markets by allowing to communicate globally as efficiently as any large business (Gallagher, Gilmore and Henry 2007).

SMEs are the main drivers of the economy, and represent the 99% of all the enterprises in Europe. A lot of SMEs are tight on cash, and are pouring half of their marketing budget into advertising or direct mailing. An effective use of e-marketing can provide the SMEs the opportunity of lower costs on their transactions, and help the companies to have a rapidly return of investment (BIS 2009).

Using e-marketing, a company can advertise the products through e-mail reaching more markets at less cost, avoiding for example printing materials like catalogues. In addition if they create a professional web site they can improve their image, credibility, reputation and conduct marketing research in other markets. Internet opens the companies to the world of potential customers.

One of the main advantages of the use of e-marketing is that helps to develop corporate image, competitive advantage, increase sales and perform marketing research.

Being part of e-marketing is a way to expand the borders of companies, wider market opportunities to expand businesses. The possibility to use viral marketing to easily contact with the target market more effectively, establish a relationship with them using direct mailing, in order to get feedback, so the company can satisfy their necessities more effectively are some of the uses of e-marketing. Using a web page, with a nice web design, clearly organized, easy to use and to get access to, for example being on a search engine or as well as being part of a social network as it can be Facebook or Twitter provides the company the opportunity to attract new stakeholders (Chaffey and Smith 2008).

The basic statements of the traditional marketing remain within e-marketing, delivering the right message to the right customers doing it better than the competition. Many companies have realised of the benefits of the use of e-marketing and how a good strategy can make the difference between success and failure.

So, are you going to start thinking how to perform it in your company?

If you can’t, just hire someone to do it for you because it is vital to success.

And for those who are more interactive, as we were talking about interactivity in our last post, visit the next link with many case studies of Campaign Enterprise software, the first personalized email marketing application designed for personal computer.

Also, the next videos explain in a very easy way all the benefits of using e-marketing;

Don't miss the opportunity to learn a bit more about this topic:




How they do it in the Silicon Valley:




There is a free lunch:



http://www.yola.com/


References

1. Gallagher, D., Gilmore, A., and Henry, S. (2007) “E-marketing and SMEs: operational lessons for the future”. European Business Review, 19 (3), 234-247

2. Chaffey, D. and Smith, P.R. (2008) eMarketing eXcellence: Planning and Optimizing Your Digital Marketing. Oxford: Butterworth Heinemann

3. BIS, Department for Business Innovation & Skills (2009) ‘Directorate: Small and Medium Enterprise Statistics for the UK and Regions’ [online] available from http://stats.berr.gov.uk/ed/sme/smestats2008-ukspr.pdf [20 February 2010]

iTV versus PC?

Imagine being able to turn your television on, pick the program you want to see from your customized pre-recorded list, pause the life show because you received a call, check the latest weather and stock quotes, conduct a phone chat and reply few e-mails, order a pizza and book your next holidays, all from your remote control and without moving from your couch.

Welcome to the world of interactive television.

With new digital TV set-top boxes with computing features, providing Internet, email, video games or home shopping facilities, who will buy a computer? Are the days of PC’s coming to an end? Why TV rather than personal computers?

Certainly, interactive television has many advantages to attract customers towards a new model integrating entertainment and functions. Consumers usually feel more comfortable with the TV rather than PC, particularly when they are at home because whereas the first one conveys relax, computers are associated with work.

According to Mark Gawlinski 24/7 services will have a brilliant future. The majority of on-screen shopping, banking, ticket booking or charity donating will be done by TV screen rather than PC. Moreover, the TV guide permits to customize the programming schedule and only the favourite programmes appear in the grids. Additionally, smart cards could be provided to the customers in order to personalise the environment and surface of their platforms. Consumers could have the ability to store their preferences (e.g. text size, colour combinations, favourite channels, and reminders) and personal details (e.g. credit card details). These cards have the advantage of being transferable between the systems (Gill, Perera).

Convenience is one of the main factors for those who support the use of interactive TV. People can just buy a product with only few clicks, from their houses and in their living rooms using the Internet capabilities that a bigger screen provides. This actually could give a big help to people that have temporary or permanent impairments. In fact, one study conducted in Europe found that 42% of the consumers feel comfortable using TV for shopping, while only a 26% prefer their laptops (Swann 2000). One of the reasons is probably the speed to make the transactions keeping the credit/debit card details for next time. Some experts have argued that with this kind of systems people is loosing their privacy and companies know everything about them, which products they order or the calls they made. But, this is not the same privacy than some online companies do leaving cookies to gather information about their consumers? Holding customer’s details is a way to look for new ways to satisfied them, not a lack of security.

Despite all of this, the disappearance of PC’s is unlikely to happen.
The linear model of TV will remain and its main use will be watching TV. There will be some people that use it to order some food, catch up with the sports or check the weather, leaving the more computer-related things for PC’s. It is hard to see an executive working on an Excel spreadsheet on TV.


What it can occur is a cultural division in the market but for now the truth is that a TV monitor is a TV set and people wants it better, not an alternative to the PC.

The next graph shows the most popular use of interactive services, and it seems that in Britain the weather is always something to be worried about.





References

1. Gawlinski, M. (2003) Interactive Television Production, Oxford: Focal Press.

2. Gill, J., Perera, S. (2003) Accessible Universal Design of Interactive Digital Television [online]vawww.brighton.ac.uk/cmis/courses/postgraduate/pgpit/euroitv/euroitv03/Papers/Paper10.pdf [17February 2010].

3. Swann, P. (2000) The Future of Interactive Television: TV dot Com, NY: TV books.

Coventry Life

The video bellow represents different aspects of our life as Coventry University students.
See it and enjoy it!