Thursday, March 28, 2013

Creating Customer Loyalty through Technology Implementation

We are now in the service economy and should learn better on how to integrate technology within the e-commerce world. Considering the explosion in online marketing and service management it is possible to understand the growth in online service research. Understanding how customers view the value of such services is important for overall improvement.

Service quality is important for customers who desire to perceive the value of their purchases worth more than the effort and cost of buying the product. When this perception of service quality is high such customers will often reward organizations with higher levels of loyalty. Research has supported the concept that customer loyalties are based in this service quality (Gefen, 2002).

New technologies have created the age of e-commerce. This technology has developed fundamental differences in the way people interact and conduct business with customers. More importantly, it also changes the way in which individuals perceive customer value, how they obtain information, and the very nature of economic exchange.

Customers are not only making investments in the product but also the company. When a customer spends their time and resources trying to obtain a product or service they are causing customer sacrifice (Brandy et. al., 2005). It is this sacrifice that makes its way into the subjective evaluation of comparative worth.

Through social exchange theory people can better understand the process of comparative exchanges that both companies and customers make. Understanding the online goal directed behavior and exchange of time and effort toward products helps to understand how to provide such services (Zeithaml, et al. 2002). Doing so will better help organizations align their services to the customer’s needs thereby adjusting the perception of this exchange into a more positive one.  

A study conducted by Xu, Benbasat, and Cenfetelli (2011) analyzed service quality, sacrifice, service outcome, and customer loyalty related to products. Participants helped a friend shop for a laptop based upon a number of defined criteria.  A total of 128 subjects with various backgrounds were used within the study to provide diversity of perspective. The researchers desired to define the relationship between online service and purchases of products.


-Service quality and customer sacrifice influenced perceived service outcome.
-The effectiveness of service dimensions is influenced by the customers’ product knowledge.
-Support for Social Exchange Theory indicates that if customers feel that their service quality and service outcomes were beneficial they will reciprocate with future purchases and loyalty.
-Customer sacrifice (time and effort) is relative to the quality of the product.
-Customers with high product knowledge are influenced by lower customer sacrifice versus service quality.
-Websites with live help reduces the perceive customer sacrifice factor and raises perceptions of positive quality experience.


As e-commerce grows as a preferred method of conducting business it is important for organizations to improve their overall understandings associated with customer relationships. Creating higher levels of virtual platforms that foster, versus hinder, customer search preferences can lead to increased sales. In addition, limiting the amount of customer sacrifice required by offering quick methods of communicating with representatives can also raise overall satisfaction levels.  It is through weighing and balancing the use of modern technologies that can we create higher levels of positive customer perception and loyalty.

Author: Dr. Murad Abel

Brady, M., Knight, G., Cronin, J. , Tomas, G., Hult, M., & Keillor, B. (2005). Removing the contextual lens: a multinational, multi-setting comparison of service evaluation models,
Journal of Retailing, 81(3), 215–230.

Gefen, D. (2002). Customer loyalty in e-commerce. Journal of the Association for Information
Systems, 3(1), 27–51.

Zeithaml, V. A., Parasuraman, A., & Malhotra, A. (2002). Service quality delivery through web sites: acritical review of extant knowledge. Journal of the Academy of Marketing Science, 30(4),

Xu, J., Benbasat, I., & Cenfentelli, R. (2011). The effects of service and customer product knowledge on online customer loyalty. Journal of the Association of the Information Systems, 12 (11).

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