User Loyalty Articles

Scope of the research

The scope of the research was to measure the impact of dynamic personalisation features on the members’ level of loyalty to the site. Members were chosen because, according to the German “Online-Datenschutz-Prinzipien” (transl: Online-Privacy-Principles) a website provider has to inform a user if identifiable data about them is collected. This is done in the disclaimer of the site when a member registers.

Another aspect was that members were able to use all features of the site and therefore benefited from all personalisation features.

Because this research was based on an emotional definition of customer loyalty, the goal was to fulfil higher-level needs (Chak 2002, p.2). The effect of the personalisation features also benefits from that because higher-level needs are more personal and therefore they have a bigger impact on the user (Kasanoff 2001, pp.113-119).

The hierarchy of needs and the personalisation ladder both derive from Maslow’s hierarchy of needs (Huitt 2004) and can be merged therefore. The result shows that most of the levels of the personalisation ladder are already in the highest level of user needs (fig. 1)(Kasanoff 2001, p.113).

Figure 1. Framework for this study

That is the reason adjustments to the website, that were made during the development process, focussed on creating a desirable, useful, credible and valuable user experience. The aspects of user experience that a website must be usable, accessible and findable were only dealt with to the extent that they fulfil the expectations of the users (Moreville 2004).

Loyalty in the sense of the word which is a ‘feeling of allegiance’ (WordNet n. d.) is also described as emotional loyalty. For emotional loyalty it is important to exceed customers’ expectations and offer an over-all satisfactory experience from which customers really benefit (Newell 2000, pp 18-20).

Hallberg (2002) describes the Ogilvy Loyalty Index, which is a study conducted by Millward Brown about emotional loyalty. They have identified four levels of emotional loyalty and in the highest level, which they call bonding, a customer has eight times the value for a company than in the lowest level. They also claim that heavy buyers who are in the bonding level can have a 10 to 15 times higher value for a company than an average buyer at the base of the emotional loyalty pyramid.

Emotional loyalty is an expression that is not very often used in customer loyalty literature. As an example, Brandi (2005) includes the emotional aspect in her description of loyalty. She defines loyalty as ‘a genuine emotional attachment that occurs when your customers appreciate the value of your product or service, as well as the way you deliver it’.

To establish emotional connections with their customers companies have to create products and services with personality (Norman 2003, p.56).

Introduction

Since American Airlines started its first database-driven loyalty program in 1981 (Frequent Flyer) and the boom of database marketing in the late ‘80s and early ‘90s (Rosenfield 2002; Ragusa 2001), many things have changed in the marketing world.

Today, customers have a bigger variety of services and products available and international competition has made the battle for customers fiercer, while decreasing the price differences (Kenzelmann 2003, p. 10-13).

These factors result in an empowerment of customers. The Internet, where the competitor is only one click away, especially contributes to the fierce competition (Reichheld 2001, pp. 192). Amazon founder and CEO Jeff Bezos says that people go to a store and buy because they are already there, but on the internet, where no effort is needed to visit the store of a competitor, companies have to focus on providing a good customer experience (Srivastav et al. 2003). The same applies for user experience on websites in general. The importance of the aspect of trust in the experience of a customer (Koufaris et al. 2002; Jarvenpaa et al. 2000) might be less important for a user of a website (Bickmore et al. 2001), but a certain amount of trust is still essential for every website. Trust and expertise build the credibility of a website, which is important for establishing a relationship with users (Fogg 2003, p. 156 ff.) and is of special importance for websites that provide information (Jodoin, pers. com. Feb. 19, 2005).

Studies show that the value, which is provided, is the main reason that drives loyal behaviour (Singh et al. 2000). Tom Heater (pers. com. Feb. 19, 2005), marketing manager of ‘The Loyalty Research Center’, believes also in this context that the ‘the value proposition drives behaviours ultimately’. One way of creating value on line is by personalisation. Websites utilise the advance in technology to track and store user data on a mass basis and tailor the information and content they provide according to the user’s preferences (Schubert et al. 2000).

This research analyses the process of building a website that tries to create a valuable user experience and evaluates the impact of personalisation features on the level of members’ loyalty to the site. The website s about the topic ‘ideas and creativity’ and the focus of the site is on building a community and thereby establishing a loyal user base which later participates in A/B testing of the personalisation features.

This research tries to prove that: “With an understanding of the aspects that are essential for a valuable user experience, it is possible to increase user loyalty to a site utilising dynamic personalisation.”

Key Terms

This research is based on an emotional definition of customer loyalty (Kenzelmann 2003, p. 25). Customer loyalty is defined as a person’s feeling or attitude of attachment to an organisation or brand that is the result of their experience with it (Srivastava 2005). The experience includes all forms of interaction and service.

In this research user loyalty describes customer loyalty on the Internet. User loyalty can be part of customer loyalty if an organisation interacts with customers off line as well, or user loyalty can be equal to customer loyalty if the organisation only interacts with people online (Stratigos, pers. com. Feb. 23, 2005). The same applies for user and customer experience (Instone, pers. com. Feb. 23, 2005).

The ‘user experience’ consists of all interactions and the resulting experiences a user has with an organisation. The first step is to meet the user’s expectations and needs. The second step is to make the product or service enjoyable and exceed user expectations.

While user loyalty consists of emotions, ‘stickiness’ is the average time users spend on a website and the frequency of their visits (Kim 2004).

Personalisation is customising some feature of a website so that the user enjoys a benefit (Personalization Consortium n. d.).

Dynamic personalisation is personalisation that uses data gathered from the user’s browsing behaviour to tailor the information for the user.

These data are stored in a user profile. A user profile includes personal data about a user, their interests and behaviour when browsing a web site (Albanese 2004).