7. Consumer's trust and loyalty in E-Commerce

Trust, loyalty - hay friends, what does it mean to you. What ever your answer may be, but these plays an important role in E-Commerce.

When people trust each other, they have confidence that each of them will keep their promises and support each other for repeat business, while this used to be the base for traditional transactions. But, after the introduction of E-Commerce it is observed that the customer loyalty has decreased because of customers ability to shop and switch to different vendors become easier, cheaper and faster. Then what about trust, loyalty in E-Commerce? We are not sure whether other parties will be fulfilling their promise.

That’s where company’s initiative comes into play to make consumers trust their products and services. Most companies/organisations try to gain trust by implementing Brand recognition and trust certificates and sales vendor’s evaluations offered by third parties.

Research suggests that consumers trust, loyalty and satisfaction are interlinked with each other. If we compare consumers trust, loyalty and satisfaction with internet’s E-Commerce it is found that these are influenced by beliefs about

Information quality – Depends on accuracy of content and format of the organisation.

System quality – Depends on navigation, ease of use and security of the website.

Service quality – Depends on responsiveness and assurance of the company’s products and services.

Big organisations like eBay, Google has managed to gain the trust of customers by there innovative methods and implementing some changes in their website like frequent update of content, information on company, provisions of having accounts and passwords and most importantly tight site security.

In addition companies like Argos, Tesco have found that loyal customers end up buying more when they have a website to shop from.

Reflective report

Customer loyalty I knew it was an important aspect of business but I never knew how much important before I attended this class. As per the discussions in the class companies like eBay managed to gain customer loyalty because it introduced the product which is sold by customer and purchased by customer where as Google able to gain customer loyalty by the expression of personalisation in its services.

In my personal experience companies which have loyal customers do not have much competition problems because loyal customers creates repetitive business and thus less expenses on marketing costs in return less production cost which yields low product cost which pleases customers and helps in repetitive business (form of continuous cycle).

Before I attended this class I never knew that it cost a lot to attract new customers in the form of marketing, discounts, warranties and clams rather than maintaining old customers. Due to this reason companies gives utmost importance in gaining customer loyalty and enhancing brand image.