This document discusses online consumer psychology and strategies for creating trust, persuading customers, and creating loyalty online. It covers topics like trust seals, the elaboration likelihood model of persuasion, Robert Cialdini's six principles of influence, the importance of customer satisfaction, word of mouth marketing and loyalty. The document is a presentation from Jacob L. Orquin, a professor at Aarhus University, and contains learning objectives and examples.

1. AARHUS
UNIVERSITY
ONLINE CONSUMER PSYCHOLOGY
Jacob L. Orquin, Ph.D.
Department of Business Administration
Aarhus University
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2. AARHUS
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LEARNING OBJECTIVES
Understand how to:
Create trust
Persuade customers
Create loyalty
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3. AARHUS
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MATCHING GOALS
Change users or change website?
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4. AARHUS
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TRUST
Why is trust important to online marketing?
Can we imagine economic transactions without trust?
How do they take place?
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5. AARHUS
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TRUST AND ECONOMIC EXCHANGES
So 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
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6. AARHUS
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TRUST AND ECONOMIC GROWTH
Denmark is not part of the study, but is probably somewhere near to
Norway (NOR)
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7. AARHUS
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INTERPERSONAL TRUST ACROSS NATIONS
Denmark is not part of this graph but it’s up here!
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8. AARHUS
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TRUST
A (very) simple model of trust (Sultan et al 2002)
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9. AARHUS
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TRUST SEALS
Trust seals has been used to incease consumer confidence in e-commerce
since the earliest days of online shopping but the documented effect is
quite modest.
According to Sultan et al. (2002) trust seals only account for 0.2 % of
explained variance in trust!
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10. AARHUS
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TRUST SEALS
Secific e-commece vendors claim to have improven conversion rates for
new visitors with up til 7 % using trust seals.
Screenshot from billigvoks.dk
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11. AARHUS
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FACTORS PREDICTING TRUST
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12. AARHUS
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PREDICTORS (CONT)
Percent of respondents who self
motivatedly commented on
certain website characteristics
influencing website credibility.
(Fogg et al. 2003)
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13. AARHUS
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PERSUASION
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14. AARHUS
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ELABORATION LIKELIHOOD MODEL
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15. AARHUS
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PERSUASION STRATEGIES
Cialdini identifies 6 compliance strategies
• Reciprocity
• Commitment and Consistency
• Social Proof
• Authority
• Liking
• Scarcity
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16. AARHUS
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RECIPROCITY
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17. AARHUS
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COMMITMENT AND CONSISTENCY
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18. AARHUS
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SOCIAL PROOF
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19. AARHUS
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AUTHORITY
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20. AARHUS
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LIKING
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21. AARHUS
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SCARCITY
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22. AARHUS
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LOYALTY
Why is loyalty important to online marketing?
What difference does it make if have to attract new customer for every
sale we make?
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23. AARHUS
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RETENTION 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
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24. AARHUS
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LOYALTY AND SATISFACTION
The apostle model
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25. AARHUS
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WOM AND SATISFACTION
There is a U-shaped relation between satisfaction and WOM
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26. AARHUS
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WORD OF MOUTH
WOM: contributes with 30 % of customers and has no specific budget
allocation!
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27. AARHUS
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SO 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.
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28. AARHUS
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WOM AND LOYALTY
Carpenter (2005) Consumer shopping value, satisfaction, and loyalty for
retail apparel brands
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29. AARHUS
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ANTECEDENTS TO E-SATISFACTION
The Szymanski & Hise (2000) model was tested and re-examined in 2004.
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30. AARHUS
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CORRELATIONS WITH CONVENIENCE
Results from Szymanski & Hise (2000) seem to focus on general aspects of
e-commerce:
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31. AARHUS
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E-SATISFACTION AFFECTS RETENTION AND
CONVERSION
Bansal et al (2004) Relating e-satisfaction to behavioral outcomes
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32. AARHUS
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ANTECEDENTS TO E-SATISFACTION
Results from Bansal et al (2004) Relating e-satisfaction to behavioral
outcomes
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33. AARHUS
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MODERATORS OF E-SATISFACTION
Yes, e-satisfaction does affect e-loyalty …
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34. AARHUS
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ONLINE VS. OFFLINE
Satisfaction has an even stronger impact on loyalty online than offline!
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35. AARHUS
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FACTORS AFFECTING LOYALTY
Borrowed from Reibstein (2002).
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36. AARHUS
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TOUCH POINT ANALYSIS
Mapping customer touch points: satisfaction can be replaced with
performance for fast benchmarking
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37. AARHUS
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GATHER YOUR DATA
Gathering questionnaire data is practically free. What matters is integrating
the data sources
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38. AARHUS
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SURVEY 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
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39. AARHUS
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OTHER WEB 2.0 TOOLS
What 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
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40. AARHUS
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INTEGRATE THE DATA!
Measure and integrate data sources. There are no universal truths so
always check what works on your website.
E-Satisfaction web analytics pipeline metrics
Is there any correlation between the data?
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41. AARHUS
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DEVELOPING E-SATISFACTION
Setting expectations: do you deliver what your market communication
promised?
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)
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42. AARHUS
UNIVERSITY
CONTACT
Jacob L Orquin, Ph.D.
Department of Business Administration
Aarhus University
E-mail: jalo@asb.dk
Check out my company:
www.userpilot.dk
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