How e‐CRM can enhance customer loyalty

Abstract

Internet-based companies need to remain competitive. One way of improving competitive advantage is to attract more customers and increase customer retention; for example, by developing long-term, secure relationships between the buyers and sellers. Little empirical research has been conducted on the link between customer relationship management and customer loyalty within an Internet, or e-commerce, context. This study provides evidence of how to improve planning for customer management by presenting and testing a conceptual model of the process by which the implementation of electronic relationship marketing (e-CRM), can enhance loyalty. While building the research framework, price sensitivity was found to be a primary confounding element on loyalty and was included in the study for control. An exploratory study of Internet retailers, e-retailers, and their customers was conducted and the findings revealed that e-retail companies (with CD, DVD, video and book products) should consider customers' perceptions of relationship marketing efforts, as they are fundamental to enhancing customer loyalty and that an enhancement of customer loyalty reduces price sensitivity.

Electronic Customer Relationship Management Performance: Its Impact on Loyalty from Customers’ Perspectives

“…Moreover, many other self-service technologies related studies regarding e-commerce and e-service have also revealed that customer satisfaction can increase word of mouth and reuse/repurchase/loyalty intentions [21]. [16] confirmed that customer loyalty could be enhanced when used within an internet context. The result supports the need to develop relation markets to achieve customer loyalty.…”

“…[31] Found that e-CRM is a critical success factor in electronic commerce. Also, [16] found that e-CRM can directly improve customer loyalty of the internet customers. The notion that e-CRM is able to increase customer loyalty relies on the research conducted by [11] who found that loyal customers increase profitability [5,22].…”

“…In addition, [21] explained that a 5 percent rise in customer loyalty can simply result in up to 125% percent increase in profits. The study by [16] demonstrated that e-CRM performance could enhance customer loyalty. Study by [4] also offers empirical support for the relationship between e-CRM performance and customer loyalty.…”

“…In this study, customer loyalty was chosen as the main consequence of e-CRM performance as the previous literatures support the relationship between them. As example, [16] stressed that little empirical research has been conducted on the link between customer relationship management and customer loyalty within an internet, or e-commerce, context. Their arguments seem that it is necessary to do an empirical research to understand this relationship deeply.…”

Internet retailing: the past, the present and the future

“…Effective oneto-one marketing requires the capture of significant quantities of customer-oriented information, so that their needs and preferences can be inferred, and then elements of the marketing mix can be specifically tailored to these requirements [Arora et al, 2008]. In practice, this process has typically been enabled by integrating customer-facing, retail websites with CRM software, to create e-CRM applications [Dussart, 2001;Lee-Kelley et al, 2003]. On-line retailing is now providing retailers with the rich source of individualized customer data, that allows them to undertake effective one-to-one marketing [Frow & Payne, 2009] and in so doing make a very real contribution to improved organizational performance [Gurau et al, 2003;Schoder & Madeja, 2004;Warrington et al, 2007].…”