Nowadays when users navigate in internet they find lots of types of communication scattered across diverse sites. Due to the lack of users’ interests in advertisements, primarily caused by not matching their preferences, today’s advertisements have a low rate of success. Recently, owing to semantic web generation, some companies started to use personalized marketing in communication as a way to turn the conversions around and thus increase customer retention and loyalty.
As a matter of fact, the retention and loyalty stages on the internet are, on average, the least crafted of the whole cycle. The customers’ conception of one-to-one marketing is quite ambiguous as they conceive that they need to be more efficient while shopping online but at the same time they feel stalked due to privacy concerns, and oversaturated with non-valuable information.
The purpose of this paper is to explore from a holistic view online personalized communication strategies and how they can be implemented in order to increase customer satisfaction thus retaining customers and, in the long-term, gaining their loyalty. The main communication areas the study treats ranges from onsite the online store, where the company wants to sell the product, to offsite advertisements in websites, social media platforms and via email.
In the empirical section, the study carried out a quantitative online survey to investigate customers’ perception and complete it with the literature. To answer the research questions, the study identified 19 hypotheses comprising of all primary aspects that define the exploration. The result could be gold dust for e-shop managers to help them maximize the marketing communication factor using personalization. The authors identified potential improvements to motivate customers to register in the online shop, whether communication channels are suited to implementing the strategy or not, and possible aspects to adapt in order to obtain maximal benefits. There were some limitations in terms of an analysis of the companies’ point of view and the necessity to analyze every communication channel more in depth as the study is an initial step.
The selection of a methodological approach is subjected to the research problem, the aim of the study and the procedure in the theoretical framework (Bryman & Bell 2011). The empirical methodology conducted was carried out taking into account these three factors and the findings come from primary data gathered in a quantitative nature of the customer’s point of view.
Quantitative research is the collection of numerical data that is analyzed by statistical methods and well-suited to explain particular questions (Aliaga & Gunderson 2000). As Burns (2000) states, the method has to provide reliable and valid data within a rational time period. Specifically, the survey that was developed from the already existing literature was conducted with internet users answering the questionnaire in 10 days. The empirical results can be either approved or rejected (Bryman & Bell 2011).
The current generation of internet technology, together with the personalization strategy concept, conforms to a new dimension of one-to-one segmentation. In the literature, the authors have chosen different aspects, separated into sections, to describe the theories attached primary in academic papers. From a holistic view, to understand the current and future situation of internet it is very important to follow the process of improvement during the history, from web 1.0 to the semantic web, passing through social media commence.
Furthermore, while reading the literature, the researchers realized the ambiguity of the personalization term, thus the paper emphasize on its different definitions depending on the context, and variations among similar concepts that can turn to confusion. Afterwards, the theoretical concept of personalization is studied in terms of its implications online. Then the thesis continued examining the process of attracting new users to register and log in on the internet shop. Further, exploring the different potential online communication channels to carry out a personalization strategy, both in the online shop and through other sites and email strategies, focused on enhancing the customer experience. Finally, in the last section, the study studied the impact of the personalization within the retention and loyal stages.
As the literature constitutes the hypothesis of the research questions, the empirical findings will follow the procedure started in the theoretical framework. The information gathered from the internet users’ survey is evaluated within the sample and clustered in groups. These groups are segmented by number of products purchased online (7 or more, or less than 7); amount of money spent online (250€ or more, or less than 250€); and number of online shops (4 or more, or less than 4) consisting of the participants’ purchases during the last year.
Individuals who accomplish these characteristics are called “online regular users”. Besides this, in the onsite personalized recommendation system, the findings are segmented by who have navigated in an online store with this software or not, and in the social media advertising subsection the findings are segmented in terms of time spent using social networks (2h or more, or less than 2h).
The following chapter aims to study and evaluate the main results obtained in the theoretical framework and in the empirical findings following the same structure as the previous section. This section also attempts to approve or reject the hypotheses underlying the research questions.
In the theoretical framework, several authors noted the positive effect of personalization in underpinning both the retention and loyal stages, which is often undervalued on internet. Fornell et al. (1992), Peppers and Rogers (1997), Rust and Oliver (2000), Johnson et al. (2001), Srinivasan et al. (2002), Ball et al. (2006), Halimi et al. (2011), Kwon and Kim (2012) and Thirumalai and Sinha (2013) studied the positive influences of personalization, customization or service personalization in customer satisfaction and loyalty thus the effect on the retention stage as there is a close correlation between the terms (Eshghi et al. 2007).
As the study identified the positive effect of one-to-one strategies to underpin the retention and loyal stages (Fornell et al. 1992; Peppers & Rogers 1997; Rust & Oliver 2000; Johnson et al. 2001; Srinivasan et al. 2002; Ball et al. 2006; Halimi et al. 2011; Kwon & Kim 2012; Thirumalai & Sinha 2013) as well as its threats in terms of privacy concerns (Thirumalai & Sinha 2013) and wrong decisions (Ball et al. 2006), it is time to sum up all the channels that are suitable to adopt a personalized strategy and explore the way this strategy has to be implemented in each case. Further, to a better interpretation the study composes the sections in order to answer the research questions and lastly a final conclusion.
Since the study identified the importance of acquiring as many registered users and then logged in on the online shop every time they enter in order to collect relevant data to offer the best personalized offers to the potential customers and other offline purposes (Lassila & Hendler 2007), the study explores how to encourage them.
- All the factors: web usability, web security, quality content and customer service influence users’ registration process.
- Specifically, web security is the most remarkable, so characteristics such as logos, certifications, experts’ opinions, clients’ recommendations, years of experience in the field are a must.
- Web quality content is the second notable aspect to develop in terms of information, color, offers, prices, discounts and catalogues.
- The personalized recommendation system is a quality information improvement that creates trustworthiness to the user (Ball et al. 2004; Rajamma et al. 2007).
- In addition, the study highlights the necessity of offering incentives and informing the advantages of being registered such as a fast and better shopping experience and offering baits with discounts, vouchers and bonus to the customers to proceed with the registration (Kwon & Kim 2011). In addition, create incentives for the potential registrants offering interrelated online and offline advantages (Garrigos et al. 2012).
Source: Karlstads University
Authors: Adrià Izquierdo Pastor