Loyalty

Question 1

What is the 8 C’s model? (2)

Answer 1

1. It was developed in the Web 1.0 era
2. We see the importance of acquisition
3. Authors discuss challenges of online
   - how can switching costs be imposed?
   - how do things differ for services?
   - what acquisition costs are we talking about in premium world of digital services?
   - what does loyalty mean?

Question 2

How loyalty developed throughout the years in its definition? (5)

Answer 2

1. It has long been argued that loyalty is the path to profitability (reicheld and Sasser, 1999)
2. The early approach to loyalty focused on repeat purchasing
3. This is “what” people do
4. See a focus on encouraging repeat spending through delivery programmes
5. Authors started arguing that there is a difference in people who purchase from apathy or a lack of choice and true loyalty

Question 3

Define loyalty?

Answer 3

A customers favourable attitude toward the e-retailer, that results in repeat buying behaviour

Question 4

How does the internet contribute to loyalty? (4)

Answer 4

1. Online registration
2. Methods of login
3. Use of apps
4. Keys issues here of loyalty and the nature of the product

Question 5

Why is loyalty important? (1)

Answer 5

1. Essentially want to attract customer through earned, owned and paid media: the role of attitudes is earned

Question 6

What is customisation? (8 C’s)

Answer 6

“ the extent to which an e-retailers website can recognise a customer and then tailor the choice of products, services and shopping experience for that customer”

Question 7

Define contact interactivity (8 C’s)?

Answer 7

“The availability and effectiveness of customers support tools on a website and the degree to which two-way communication with customers is facilitated”

Question 8

Why is loyal customers maybe not worth it? (3)

Answer 8

1. Loyal customers demanding discounts and not being more profitable
2. Customers make decisions automatically
3. Snapchat versus Instagram (swift technological changes)

Question 9

Define cultivation

Answer 9

Information and incentives to increased breadth and depth of purchases over time

Question 10

Define care

Answer 10

The attention that an e-retailer pays to all the pre and post purchase customer interface activities designed to facilitate both immediate transactions and long term customer relationships

Question 11

Define community

Answer 11

The extent to which customers are provided with the opportunity and ability to share opinions amongst themselves through comment links, buying circles and chat rooms sponsored by the e-retailer

Question 12

Define choice

Answer 12

• wide choice
• alliance with relevant suppliers
• the idea of the one-stop shop
• encouraging people to return

Question 13

Define convenience

Answer 13

Simple, intuitive and user friendly, speed, minimum effort and minimising errors

Question 14

Define character

Answer 14

• communicating the brand