Ab Hamid, Noor Raihan (2006) An Assessment of the Internet's Potential in Enhancing Consumer Relationships. PhD thesis, Victoria University.

Abstract

Motivated by the belief, 'to serve existing consumers costs less than acquiring new consumers', firms' marketing strategies then evolve around retaining consumers and building long-term consumer relationships. In the pursuit of acquiring consumer loyalty, enhancing consumer value has been the focus of many firms' relationship building efforts. Hence, this study aims to understand the affect of using the Internet as a relationship marketing tool on consumer retention as well as the determinants of online consumer satisfaction affecting loyalty and retention. Although there are many factors affecting the implementation of 'E-CRM', that is companies' CRM initiatives on the Internet channel; this study focuses on examining consumer perceptions towards the constituents of building online consumer relationships. Adopting a positivist approach, this research asks the following major questions: 1) How are online consumer satisfaction, loyalty and retention constructed?, and 2) How does the use of Internet technology in CRM influence the satisfaction, loyalty and retention of consumers? Data for this research were collected through questionnaire survey on Internet users in major cities of Malaysia and were analyzed using statistical techniques namely, descriptive, Structural Equation Modeling and Multivariate Analysis of Variance. The results from this study reveal that the use of Internet in building consumer relationships affects consumer satisfaction, loyalty and retention. The effectiveness of E-CRM program determines the level of which online features, such as customer service efficiency, ease of navigation, information quality, personalization and online community would be implemented on firms' Web sites. In addition, older and welleducated users, more experienced as well as users who are involved in higher risk activities, such as online banking tend to be less tolerant. Hence, these groups of consumers seek superior quality of services from online service providers. This research contributes to knowledge in several ways. Most importantly, it demonstrates the roles of Internet technology pertinent in enhancing consumer values leading to long-term consumer relationships. In particular, this research highlights the critical dimensions of E-CRM program, which firms should invest in their consumer retention strategies. While repeat visits do not necessarily reflect consumer loyalty and commitment to a Web site, this research advocates that when salient elements of building consumer relationships exist, service providers are more likely to improve satisfaction and gain consumer loyalty. As indicated in the E-CRM model, firms' relationship marketing strategies should focus on identifying varying consumer expectations of service quality based on demographics, consumer level of experience with Internet technology and perceived risk.

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