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online consumer psychology

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online consumer psychology covering topics like trust, persuasion, satisfaction and loyalty.

online consumer psychology covering topics like trust, persuasion, satisfaction and loyalty.

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  • 1. AARHUS UNIVERSITYONLINE CONSUMER PSYCHOLOGYJacob L. Orquin, Ph.D.Department of Business AdministrationAarhus University ASB AU MAPP
  • 2. AARHUS UNIVERSITYLEARNING OBJECTIVESUnderstand how to:Create trustPersuade customersCreate loyalty ASB AU MAPP
  • 3. AARHUS UNIVERSITYMATCHING GOALS Change users or change website? ASB AU MAPP
  • 4. AARHUS UNIVERSITYTRUSTWhy is trust important to online marketing?Can we imagine economic transactions without trust?How do they take place? ASB AU MAPP
  • 5. AARHUS UNIVERSITYTRUST AND ECONOMIC EXCHANGESSo what’s the value of trust in e-commerce?• Low degrees of trust are detrimental to economic exchanges• Increased levels of trust are associated with a higher conversion rate• Increased levels of trust are associated with satisfaction and loyalty ASB AU MAPP
  • 6. AARHUS UNIVERSITYTRUST AND ECONOMIC GROWTHDenmark is not part of the study, but is probably somewhere near toNorway (NOR) ASB AU MAPP
  • 7. AARHUS UNIVERSITYINTERPERSONAL TRUST ACROSS NATIONSDenmark is not part of this graph but it’s up here! ASB AU MAPP
  • 8. AARHUS UNIVERSITYTRUSTA (very) simple model of trust (Sultan et al 2002) ASB AU MAPP
  • 9. AARHUS UNIVERSITYTRUST SEALSTrust seals has been used to incease consumer confidence in e-commercesince the earliest days of online shopping but the documented effect isquite modest.According to Sultan et al. (2002) trust seals only account for 0.2 % ofexplained variance in trust! ASB AU MAPP
  • 10. AARHUS UNIVERSITYTRUST SEALSSecific e-commece vendors claim to have improven conversion rates fornew visitors with up til 7 % using trust seals. Screenshot from billigvoks.dk ASB AU MAPP
  • 11. AARHUS UNIVERSITYFACTORS PREDICTING TRUST ASB AU MAPP
  • 12. AARHUS UNIVERSITYPREDICTORS (CONT) Percent of respondents who self motivatedly commented on certain website characteristics influencing website credibility. (Fogg et al. 2003) ASB AU MAPP
  • 13. AARHUS UNIVERSITYPERSUASION ASB AU MAPP
  • 14. AARHUS UNIVERSITYELABORATION LIKELIHOOD MODEL ASB AU MAPP
  • 15. AARHUS UNIVERSITYPERSUASION STRATEGIESCialdini identifies 6 compliance strategies• Reciprocity• Commitment and Consistency• Social Proof• Authority• Liking• Scarcity ASB AU MAPP
  • 16. AARHUS UNIVERSITYRECIPROCITY ASB AU MAPP
  • 17. AARHUS UNIVERSITYCOMMITMENT AND CONSISTENCY ASB AU MAPP
  • 18. AARHUS UNIVERSITYSOCIAL PROOF ASB AU MAPP
  • 19. AARHUS UNIVERSITYAUTHORITY ASB AU MAPP
  • 20. AARHUS UNIVERSITYLIKING ASB AU MAPP
  • 21. AARHUS UNIVERSITYSCARCITY ASB AU MAPP
  • 22. AARHUS UNIVERSITYLOYALTYWhy is loyalty important to online marketing?What difference does it make if have to attract new customer for everysale we make? ASB AU MAPP
  • 23. AARHUS UNIVERSITYRETENTION IS (VERY) PROFITABLE! A 10 % change in repeat customer conversion leads to a 10 % change in net present value Agrawal et al (2001) E- performance ASB AU MAPP
  • 24. AARHUS UNIVERSITYLOYALTY AND SATISFACTION The apostle model ASB AU MAPP
  • 25. AARHUS UNIVERSITYWOM AND SATISFACTIONThere is a U-shaped relation between satisfaction and WOM ASB AU MAPP
  • 26. AARHUS UNIVERSITYWORD OF MOUTHWOM: contributes with 30 % of customers and has no specific budgetallocation! ASB AU MAPP
  • 27. AARHUS UNIVERSITYSO WHAT’S THE POINT? Customer satisfaction is a strong predictor both of WOM and loyalty. Among online marketing initiatives WOM and loyalty have the highest ROI. ASB AU MAPP
  • 28. AARHUS UNIVERSITYWOM AND LOYALTYCarpenter (2005) Consumer shopping value, satisfaction, and loyalty forretail apparel brands ASB AU MAPP
  • 29. AARHUS UNIVERSITYANTECEDENTS TO E-SATISFACTIONThe Szymanski & Hise (2000) model was tested and re-examined in 2004. ASB AU MAPP
  • 30. AARHUS UNIVERSITYCORRELATIONS WITH CONVENIENCEResults from Szymanski & Hise (2000) seem to focus on general aspects ofe-commerce: ASB AU MAPP
  • 31. AARHUS UNIVERSITYE-SATISFACTION AFFECTS RETENTION ANDCONVERSIONBansal et al (2004) Relating e-satisfaction to behavioral outcomes ASB AU MAPP
  • 32. AARHUS UNIVERSITYANTECEDENTS TO E-SATISFACTIONResults from Bansal et al (2004) Relating e-satisfaction to behavioraloutcomes ASB AU MAPP
  • 33. AARHUS UNIVERSITYMODERATORS OF E-SATISFACTIONYes, e-satisfaction does affect e-loyalty … ASB AU MAPP
  • 34. AARHUS UNIVERSITYONLINE VS. OFFLINESatisfaction has an even stronger impact on loyalty online than offline! ASB AU MAPP
  • 35. AARHUS UNIVERSITYFACTORS AFFECTING LOYALTYBorrowed from Reibstein (2002). ASB AU MAPP
  • 36. AARHUS UNIVERSITYTOUCH POINT ANALYSISMapping customer touch points: satisfaction can be replaced withperformance for fast benchmarking ASB AU MAPP
  • 37. AARHUS UNIVERSITYGATHER YOUR DATAGathering questionnaire data is practically free. What matters is integratingthe data sources ASB AU MAPP
  • 38. AARHUS UNIVERSITYSURVEY SOCIAL MEDIA Get direct input on what you have done right and wrong! Complaint about support center Complaint about broad band service Complaint about support center Ok delivery but bad support ASB AU MAPP
  • 39. AARHUS UNIVERSITYOTHER WEB 2.0 TOOLSWhat are they talking about and how much are they talking?Social media monitoring: Buzzmetrics, Cymphony, Google blogsearch,Blogpulse.com Facebook Lexicon Google blogsearch Blogpulse.com ASB AU MAPP
  • 40. AARHUS UNIVERSITYINTEGRATE THE DATA!Measure and integrate data sources. There are no universal truths soalways check what works on your website. E-Satisfaction web analytics pipeline metrics Is there any correlation between the data? ASB AU MAPP
  • 41. AARHUS UNIVERSITYDEVELOPING E-SATISFACTIONSetting expectations: do you deliver what your market communicationpromised?Website characteristics: how is your websites’s ease of use,content/information, price, and product selection doing?Customer service: check your support, delivery, and complaints.e-CRM applications: there are no killer apps! Feinberg & Kadam (2002) ASB AU MAPP
  • 42. AARHUS UNIVERSITYCONTACTJacob L Orquin, Ph.D.Department of Business AdministrationAarhus UniversityE-mail: jalo@asb.dkCheck out my company:www.userpilot.dk ASB AU MAPP