Content area
Full text
ABSTRACT
The authors investigate the impact of satisfaction on loyalty in the context of electronic commerce. Findings of this research indicate that although e-satisfaction has an impact on e-loyalty, this relationship is moderated by (a) consumers' individual level factors and (b) firms' business level factors. Among consumer level factors, convenience motivation and purchase size were found to accentuate the impact of e-satisfaction on e-loyalty, whereas inertia suppresses the impact of e-satisfaction on e-loyalty. With respect to business level factors, both trust and perceived value, as developed by the company, significantly accentuate the impact of e-satisfaction on e-loyalty. (c) 2003 Wiley Periodicals, Inc.
The collapse of large numbers of dot-com companies has required managers, who felt that the Internet had changed everything, to relearn that profits indeed do matter (Rosenbloom, 2002) and that the traditional laws of marketing were not rescinded with the arrival of the e-commerce era. Additionally, it has been reinforced that organizations not only need to attract new customers, but also must retain them to ensure profitable repeat business. In several industries, the high cost of acquiring customers renders many customer relationships unprofitable during early years. Even the individual stores of highly successful warehouse clubs like Sam's Club, Costco, and BJ's are typically not profitable until the second or third year after opening.
Over their buying lifetimes, customers' loyal to a given seller may be worth up to 10 times as much as its average customer (Health, 1997; Newell, 1997). Without customer loyalty, even the best-designed e-business model will soon fall apart. In their quest to develop a loyal customer base, most companies try their best to continually satisfy their customers and develop long-run relationships with them. Although satisfaction measures seem to be an important barometer of how customers are likely to behave in the future, there are two issues to consider:
1. Satisfaction measures are likely to be positively biased (Peterson &Wilson, 1992).
2. Establishing the relationship between satisfaction and repurchase behavior has been elusive for many firms (Mittal &Kamakura, 2001).
The relationship between satisfaction and loyalty seems almost intuitive, and several researchers have attempted to confirm this in their research (Cronin &Taylor, 1992; Newman &Werbel, 1973; Woodside, Frey, &Daley, 1989). Despite the intuitive appeal, however, the strength of the relationship...