Retaining loyal customers in e-commerce - Winning customers is good but keeping them is better

Research Paper (undergraduate) from the year 2007 in the subject Business economics - Offline Marketing and Online Marketing grade: 15 Fontys University of Applied Sciences Venlo (Fontys University of Applied Science Venlo the Netherlands) course: International Business and Management Studies language: English abstract: I know who you are I remember you. I get you to talk to me. And then because I know something about you my competitors don't know I can do something for you my competitors can't do - not for any price. (Newell 2000)In today's business there is a shift of many companies away from a transactional mindset toward a relational mindset when it comes to dealing with customers. That is because researches proofed that nowadays for many companies profitability depends on the companies ability to develop and maintain long-term relationships with their clients (e.g. Lemon et al. 2002 pp.1-14). In order to gain a competitive edge companies need to be customer-driven and able to serve their customers needs. Moreover companies have to deliver a certain added value to exceed customer expectations and build strong relationships.In the traditional market where face-to-face contact is possible marketers get to know their clients personally. By personal contact marketers have the possibility to build a personal relationship with their clients figure out their needs and finally satisfy their needs by personalized services. As a result customers are likely to stay with a company and the potential that they become loyal increases.However the emergence of the internet and e-commerce makes it is very difficult for companies to build long-term relationships with customers. By means of the internet the personal contact to customers is abolished and a reduction of transaction costs is enabled which in turn creates a new set of customer expectations. Therefore the potential that customers will switch to the competition rises dramatically com