CUSTOMER PARTICIPATION IN CREATING SITE BRAND LOYALTY

CUSTOMER PARTICIPATION IN

CREATING SITE BRAND LOYALTY

JONNA HOLLAND is Assistant

Professor in the Department of

Marketing, University of Nebraska-

Omaha.

STACEY MENZEL BAKER is

Assistant Professor of Marketing at

Bowling Green State University,

Bowling Green, Ohio.

Jonna Holland

Stacey Menzel Baker

ABSTRACT

This article explores the development of an e-business marketing

model that capitalizes on customer participation and the likely

consequences of such efforts, principally site brand loyalty. A

conceptual model illustrates how consumers’ goals in visiting a

website (task or experiential) affect their propensity to be site

brand loyal and how characteristics of the site, including

personalization and community, are related to brand loyalty. The

model also shows that creating site brand loyalty leads to

predictable affective, cognitive, and behavioral outcomes from

customers, such as repeat visits to and patronage of the site, fewer

intentions to defect to competitors, and more favorable attitudes

toward the site. Case studies of corporate websites provide

empirical evidence to support the model. The paper concludes by

suggesting that customer participation in the e-business model

fundamentally changes the way brands are developed. That is,

producers no longer create an image for a brand and pass it on to

Direct Marketing Educational Foundation, Inc.

JOURNAL OF INTERACTIVE MARKETING

VOLUME 15 / NUMBER 4 / AUTUMN 2001

the consumer; instead, the producer and

consumer are interactively creating the e-business

brand.

INTRODUCTION

In sharp contrast to the alienation wrought by

homogenized broad-cast media, sterilized mass

“culture,” and the enforced anonymity of bu-

reaucratic organizations, the Internet con-

nected people to each other and provided a

space in which the human voice would be rap-

idly rediscovered. (Levine, Locke, Searls, &

Weinberger, 2000: p. xxi.)

The above quote from The Cluetrain Manifesto

represents one of the least conventional views of

the transformational power of the Internet. The

central message of the Manifesto is that markets

are primarily conversations, and through the

Internet customers have regained the power to

participate actively in the marketing process.

This message is similar to the proclamations of

many more conventionally accepted voices in

the business literature. For example, in relation-

ship marketing, or one-to-one marketing, the

focus is on two-way interactive communication

where the customer actively participates in his/

her value creation (Duncan & Moriarty, 1998;

Peppers & Rogers, 1997).

Technology, which has fundamentally im-

pacted the way that marketers develop relation-

ships with their customers (Baker, Buttery, &

Richter-Buttery, 1998), has been a driving force

in customers’ renewed ability to participate in

the marketing process. As Baker et al. suggest

the evolution of customer participation has

come full circle from the agricultural age when

the typical exchange involved a one-to-one bar-

ter, to the Industrial Revolution when ex-

changes were characterized as one-to-many, to

the Information Age when target marketing al-

lowed for one-to-many segments, and now to

the Age of Communication where two-way in-

teractive communication allows for the building

of relationships.

Although many acknowledge that the Inter-

net is changing the way companies and individ-

uals conduct business, few recognize that the

Internet represents not just another distribu-

tion channel, retailing model, or vehicle for

advertising, but rather it may be a completely

new business model (Bambury, 1998; Deighton,

1997; Hoffman & Novak, 1996; Kalakota & Rob-

inson, 1999). The primary factor driving the

development of this new business model is the

need to capitalize on the increased capabilities

of a multimedia network that allows for a “many

to many” communication environment (Hoff-

man & Novak, 1996). It is now technologically

possible to allow customers to become active

participants in the marketing process—every-

thing from designing products to establishing

prices and creating communication vehicles

and distribution channels (Hoffman & Novak,

1996; Peppers & Rogers, 1997). However, to

fully achieve this type of participation and to

beneﬁt from it, ﬁrms must implement new e-

business models designed around the complex

fusion of business process, enterprise applica-

tions, and new organizational structures (Kala-

kota & Robinson, 1999).

Purpose

Traditional marketing channels have either fa-

cilitated product or information ﬂows, but what

is emerging over the Internet is an integrated

channel of interaction. Thus, a focus on engag-

ing the customer in this channel is central to

the new business model. The goal of this re-

search is to examine potential methods of en-

couraging active customer participation in the

marketing process and the likely consequences

of such efforts. The traditional marketing con-

cept of brand loyalty will be examined as a key

consequence of this type of participation. The

characteristics of the online environment that

inﬂuence the development of brand loyalty and

the resulting consequences will be outlined. A

conceptual model will be presented to contrib-

ute toward developing an e-business marketing

model that capitalizes on customer participa-

tion. Empirical support for the model is dem-

onstrated through case studies found on exist-

ing corporate websites.

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BRAND LOYALTY

Traditional Views of Brand Loyalty

Brand loyalty is a concept with which most mar-

keters are quite familiar; therefore this section

will not serve as a comprehensive review of the

literature, but rather a summary of the key

points relevant to the current research. What is

brand loyalty? In general, brand loyalty is un-

derstood to describe the characteristics of those

consumers who have a strong commitment to a

brand, because they view that brand as being

more satisfactory than the alternatives and this

evaluation is reinforced through repeated use

(Day, 1969; Jacoby & Chestnut, 1978). The lit-

erature is quite clear on what brand loyalty

means; however, there are differences of opin-

ion on its measurement. The instrumental con-

ditioning perspective views behavioral measures

such as actual purchase patterns as being the

best indicators of brand loyalty. This line of

research maintains that brand loyalty develops

from the positive reinforcement received from

trying a brand and being satisﬁed with it, which

leads to repeat purchase (Jacoby & Chestnut,

1978).

The problem is that behavioral measures can-

not distinguish between actual brand loyalty

(i.e., affect for the brand) and “spurious” repeat

purchase patterns that may result from conve-

nience, availability, inertia, or other factors. The

cognitive school proposes that only measures of

a consumer’s mental processes and beliefs can

make the distinction between actual brand loy-

alty and spurious behavior (Day, 1969; Lutz &

Winn, 1974). From this perspective, brand loy-

alty is the result of the consumer’s search and

attribute evaluation process, which leads to be-

liefs of brand appropriateness or superiority

and repeat purchase. An example of this is the

model put forth by O’Guinn, Allen, and Se-

menik (2000), which deﬁnes brand loyalty as a

function of experience and involvement levels.

Customers who have a high experience level

with a given product category and are highly

involved with the category will tend to be brand

loyal.

One method of resolving the debate while

capitalizing on the advantages of each approach

is to combine them. Dick and Basu (1994)

present an integrated model that demonstrates

the advantages of looking at both attitudinal

and behavioral components. Examining con-

sumers in traditional, off-line environments, the

study measured relative attitude toward the

brand as well as repeat patronage. Those con-

sumers exhibiting both high repeat patronage

and holding a high relative attitude toward the

brand were found to be brand loyal.

Brand Loyalty in the Online

Environment

Is there reason to believe that the current mea-

sures of brand loyalty can be applied to the

online environment? Although there are new

consumers discovering the Internet daily, the

number of new users is being outpaced by the

growth in new websites available (Hanson,

2000). This means that the battle for “eyeballs”

or visitors will soon shift from the current em-

phasis on attracting new users to concern with

retaining existing ones. Recognition that ob-

taining new customers to a site is not only more

difﬁcult as online competition increases, but

also more costly, will drive managers to reem-

phasize brand loyalty (Hanson, 2000; Peppers &

Rogers, 1997).

In light of this, the new e-business models

must consider the value of favorable consumer

attitudes and repeat patronage to the website.

Online measures of these brand loyalty factors

may differ from traditional marketing environ-

ments, however. For example, not all websites

are transactional in nature, therefore measures

of “repeat patronage” that focus on purchase

may need to be altered. Differences in website

type and functions may impact the develop-

ment of brand loyalty; therefore a discussion of

the most common website models is warranted.

Types of Websites

Commercial websites may be designed for a

wide variety of functions. The ﬁrst order of

distinction is between sites that are considered

portals and all other sites. Portals, also known as

gateways, are “web sites that serve as starting

points to other destinations or activities on the

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World Wide Web. Portals also commonly pro-

vide services such as e-mail, online chat forums

and original content” (net.lingo.com) Some of

the best known sites with the highest usage rates

are portals such as Yahoo, Excite, and AOL.

Portals are large and amorphous, and by deﬁ-

nition often serve as a starting point as opposed

to a destination site (although they can be

both). Therefore it may be simpler to begin

examination of relevant constructs in relation

to more focused sites where consumers attempt

to “arrive” as opposed to “just pass through.”

Among typical destination sites there are

three primary models based on the method of

revenue generation (Hoffman, Novak, & Chat-

terjee, 1995):

1. Sponsored content or advertising-based

sites, which follow the traditional televi-

sion model providing free content to us-

ers and deriving revenues from advertis-

ing space sold (for example cnn.com or

whatis.com).

2. Fee-based or subscription-based sites,

which obtain revenue up front from con-

sumers and provide password-protected

access to content (for example, WSJ.com

or Forrester.com).

3. Online storefronts or transaction-based

sites, which provide product informa-

tion, take orders, payment, and arrange

for delivery (for example, amazon.com

or JCPenney.com).

4. A combination of the above.

Stickiness

Retailers have long understood the value of

keeping customers in a store longer and getting

them to return more often (Hirschman, 1981).

In the online world, this concept is called “stick-

iness” (Gillespie, Krishna, Oliver, Olsen, &

Thiel, 1999). Stickiness is “the sum of all the

web site qualities that induce visitors to remain

at the site rather than move on to another site”

(whatis.com). In other words, site stickiness is

the ability to encourage customers to stay

longer, navigate more deeply into a site, and

return more often (Gillespie et al., 1999).

How well does this concept relate to brand

loyalty? An examination of each of the elements

of stickiness is necessary. First, visit duration;ifa

consumer visits a site and stays for a longer than

average period of time, is this an indication of

brand loyalty? E-Bay has been heralded for its

ability to generate longer-than-average connect

times and is said to have a very loyal customer

base (Anders & Weber, 1999; Bradley & Porter,

2000). But longer-than-average duration at any

given site could be the result of any number of

factors. Issues such as confusing navigation,

slow connect and load times, difﬁculty with con-

tent, or difﬁcult shopping and transaction sys-

tems would contribute to increased visit dura-

tion, but not to customer satisfaction. However,

if a consumer remains at a site by choice, and is

receiving a value in exchange for his/her time,

then stickiness is a positive characteristic.

How does one’s goal for being online affect

stickiness? Novak, Hoffman, and Yung (2000)

outline two types of online activity—task-ori-

ented (work, online search for product infor-

mation, and product purchase) and experien-

tial (which involves fun and recreational

activities, as well as traditional non-goal-directed

search, or “surﬁng”). Experiential uses of the

Web were positively correlated with time spent

online, while task-oriented activities were nega-

tively related. The authors conclude that “the

online experience does not yet offer the requi-

site levels of challenge and arousal, nor do they

induce the sense of telepresence and time dis-

tortion, necessary to create a truly compelling

online customer experience” (p. 32). It may be

as well that consumers do not desire a “compel-

ling online experience” for task-oriented activi-

ties, at least not as it is deﬁned in the study.

Perhaps efﬁcient, low connect times, or even

transactions that do not require visiting the site

may be preferred for task oriented activities. An

example of an efﬁcient, yet extremely short con-

nection to a web site would be a customer with

a standard re-buy order with a supplier who

would only need to log on and click a single box

to initiate the exchange. This transaction may

contribute to customer satisfaction, but cer-

tainly not to above average duration of visit.

Stickiness may also be deﬁned in terms of

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depth of visit, or number of web pages viewed at

a given site. In fact, some researchers (Hanson,

2000) deﬁne visit duration by number of pages

viewed, which circumvents issues of low trans-

mission speeds, slower end-user computers, and

other delays that would contribute to longer

visits, but not to positive attitudes. But it could

be argued that depth of visit does not solve all of

these issues since confusing site design could

also lead to multiple page visits. However, in

general website visitors continually make a judg-

ment as to the value of continuing on at a given

site or clicking away. Huberman, Pirolli, Pitkow,

and Lukose (1998) propose that the decision to

continue on at a site is a function of user expec-

tations and uncertainty. In their examination of

duration of visit on the Xerox company website,

they found that each consecutive page viewed

must be of increasing value for a consumer to

expect or estimate future web pages to be of

value. This function creates a sharply upward

sloping curve where ratings of current page

value must increase to increase the likelihood

that the visit will continue. When visitors ﬁrst

arrive at a site they are more willing to keep

looking at additional pages even if the value of

the current page is low. Consumers seem to be

optimistic at this point that future pages will be

valuable. However, the longer the website visit,

the higher the page quality must be for the visit

to continue. This analysis leads the researchers

to the conclusion that visit duration is a good

measure of website value.

This may not always hold true, however, as

the distinction between task orientation and

experiential orientation may be relevant here. If

consumers knows what information they want,

why would they want to visit more rather than

fewer web pages in order to meet their needs?

For an efﬁcient transaction, most customers

would prefer to arrive directly at the page they

need and to have their needs met with a few

quick clicks. However, for users with a more

experiential orientation, a site with a great deal

of value, both in terms of content breadth and

depth, as well as other factors, would most likely

invite more page viewing per visit than a site

that was less valuable to the consumer.

The ﬁnal aspect of stickiness under consider-

ation is that of repeat visits. In most cases, con-

sumers who return to a particular site do so

because they expect the site to be of value to

them. There are still examples, however, of cus-

tomers who may in fact ﬁnd a given site com-

pletely satisfactory, in part because a repeat visit

is not necessary. An example of this would be

the consumer who receives an e-mail notiﬁca-

tion that a previously unavailable item can now

be shipped, requiring only an afﬁrmative e-mail

reply to complete the order. The efﬁciency of

this transaction may be received quite positively,

but would not contribute to a repeated visits

measure.

The distinction between task and experien-

tial orientations in Web usage may demonstrate

a new application of the traditional ongoing

search model (Bloch, Sherrell, & Ridgway,

1986). Consumers going online for recreational

purposes or “surﬁng” will display the character-

istics of ongoing searchers (those who search

for the sake of knowledge and for the fun of it).

Those who are online with a task orientation

will more closely resemble traditional consum-

ers in the problem-solving mode (as in pre-

purchase search). Clearly consumers may ex-

hibit either tendency depending on the

situation. It is up to marketers to understand

this behavior and to design websites that will

meet the needs of consumers in both groups.

In conclusion, site stickiness, as measured by

duration of visit, depth of visit, and repeat visits

may be an effective indicator of favorable atti-

tudes leading to brand loyalty for experiential

uses of the Web, but efﬁciency measures unre-

lated to stickiness may be more appropriate for

task-oriented uses of the Web.

METHODS OF INCREASING BRAND

LOYALTY/STICKINESS

Many managers recognize the potential value of

increasing site stickiness. First, a site must build

relevant and valuable content, providing sufﬁ-

cient depth and breadth to warrant consumer

involvement. Additionally, leading websites are

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already incorporating a variety of tools designed

to increase site stickiness. These include:

●

Allowing the user to personalize the site

(Yahoo, Excite, and MSN Network, for ex-

ample)

●

Building online communities in which us-

ers post information or form discussion

groups (Yahoo, Geocities)

●

Inviting user feedback in response to col-

umnists (ZDNet)

●

Adding games to the site (Yahoo)

●

Using extensive hypertext cross-references

to other parts of the site (ZDNet and many

others) (source: www.whatis.com)

Although each of these methods of increas-

ing site stickiness may also have an impact on

brand loyalty, examining them all is beyond the

scope of the current study. Given the unique

characteristics of the Internet that allow for a

many-to-many communications model and un-

precedented interactivity, it could be argued

that the techniques of personalization and com-

munity building are the most fundamental for

fostering consumer participation in marketing

efforts. At a minimum, these two areas will con-

stitute a good point of departure for this initial

inquiry into online brand loyalty.

Personalization

Personalization, as the ultimate form of cus-

tomization, is the ﬁnal result of understanding

and meeting the unique needs of the customer.

“One-to-one marketing” is a fundamental con-

cept of interactive marketing and is key to cus-

tomer retention and creating brand loyalty

(Peppers & Rogers, 1997). The goal is to in-

crease customer retention simply by making loy-

alty more convenient for the customer than

non-loyalty.

Personalization can be thought of as a spe-

cialized form of product differentiation (Han-

son, 2000). This differentiation can take the

form of product modiﬁcation to incorporate

features designed to more fully meet the needs

of the individual. It may also take the form of an

extension to the consumer’s search and evalua-

tion capabilities through choice assistance tech-

nology (such as the product recommendations

on amazon.com). Personalization not only

meets the customer’s needs more fully (provid-

ing functional beneﬁts), but also is traditionally

a sign of status (providing emotional beneﬁts)

and uniqueness (providing self-expressive ben-

eﬁts).

Personalization is likely to contribute to the

creation of brand loyalty for both task-oriented

and experiential uses. For the former, person-

alization is likely to increase the efﬁciency of

achieving goals. Sites that know the consumer’s

preferences and pertinent information will be

able to screen out unwanted information or

product options, improve the accuracy of

searches, and speed the completion of transac-

tions. For both task-oriented and experiential

uses, personalization will have a positive inﬂu-

ence on the consumer’s attitude toward the

brand if the customer’s needs are in fact more

fully met, or if a greater bundle of beneﬁts is

received. Personalization will also increase the

likelihood that this positive attitude will be cou-

pled with the behavioral component of repeat

visits to the site. The customer has now partici-

pated in the marketing efforts by investing time

and energy into providing the information nec-

essary for the personalization effort; therefore,

loyalty to the site, as measured by repeat visits is

easier than beginning over again with a compet-

itive site.

Not all types of products lend themselves to

personalization (e.g., many consumer goods).

Consumers must both desire and value personal-

ization for it to have effects on brand loyalty.

Furthermore, excessive personalization wastes

consumer time and potentially increases cus-

tomer confusion. Peppers and Rogers (1997)

suggest that when there is little difference in the

value (or proﬁtability) of a ﬁrm’s customers,

and they have similar needs, then there is little

value to personalization for either the company

or the consumer. Furthermore, personalization

can be very expensive for a ﬁrm. However, if

these efforts create a competitive advantage for

the company, deﬁned as long-lasting and defen-

sible market position with above-normal proﬁts

(Porter, 1985), then personalization will, in

fact, pay for itself.

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An examination of current corporate web-

sites provides evidence that companies are us-

ing personalization to increase customer satis-

faction and create loyalty. An Internet search

for the word “customized” turns up more than

1,173,515 web pages (AltaVista.com). Just as

mass production was the hallmark of yesterday’s

Industrial Age, mass customization has the po-

tential to dominate the Information Age (Digi-

toe, 2001). One case in point is the launch of

Millstone Personal Blends, a subsidiary of

Procter & Gamble. The site offers coffee lovers

a personalized way to create their own custom

blend of coffee. At this site, customers partici-

pate in the marketing process by creating their

own product and naming it. Customers answer

a variety of questions regarding their taste and

sensory preferences. This information drives

the creation of a unique coffee blend that can

be produced, packaged, and named for each

individual consumer. In fact, customers can cre-

ate multiple personal blends depending on

their moods or situational needs. These prefer-

ences are stored in the customer’s proﬁle so

that more of the coffee can be ordered at a

future date. The goal, according to Proctor &

Gamble is to “personalize the consumer’s expe-

rience” in order to maximize customer satisfac-

tion and proﬁtability (ATG, 2001).

Another site providing evidence to support

the value of personalization is Earthlink, an

Internet Service Provider. This ISP encourages

customers to personalize the start-up page, to

increase the ease of use and value of its services.

More than 50% of EarthLink’s customer base

has used the Personal Start Page service (PSP).

The result of this increased personalization is

increased brand loyalty and decreased brand

switching as measured by a churn rate of only

4.2%, one of the lowest in the ISP industry

(Meehan, 2000).

Community Building

The second technique used to increase site

stickiness is the building of virtual communities.

These are groups of people who share common

interests and needs who come together online

to share a sense of community with others, with-

out the constraints of time or space (Hagel &

Armstrong, 1997). Virtual communities capital-

ize on the interactivity and many-to-many com-

munications potential of the Web. They may

take the form of usenet groups, discussion fo-

rums, or chat rooms, among others. These com-

munities have some of the characteristics of

social gatherings, such as membership rules and

norms, multidirectional communication, and

users are responsible for contributing as well as

consuming information (Hanson, 2000). Due

to their ability to provide feedback to and infor-

mation about companies and brands, virtual

communities are a building block toward the

type of consumer participation in marketing

that has been discussed earlier, and therefore

should be examined for their potential impact

on brand loyalty.

Hagel and Armstrong boldly state, “those

businesses that capitalize on organizing virtual

communities will be richly rewarded with both

peerless customer loyalty and impressive eco-

nomic returns” (1997, p. 2). Similarly, Lamon

notes, “being ﬁrst to establish a ‘robust’ buyer

and seller community is critical to e-commerce

survival, not to mention success; second place

won’t cut it in this mad scramble” (2000, p. 18).

How can this be? What are the beneﬁts to

consumers of an online community? Again, a

variance may be predicted for task-oriented as

compared to experiential uses of the Internet.

In terms of increasing efﬁciency in goal attain-

ment, online communities can provide access to

information not available through any other

means. Online communities provide a ready

source of “word-online” (as opposed to word-of-

mouth) experience with companies and brands.

Just as consumers value personal recommenda-

tions for most products above all other informa-

tion sources, online consumers may obtain the

same types of experience based evaluations

from the online community. A site that supports

an active “critical mass” of involved consumers

can be a valuable information resource (Han-

son, 2000). This may contribute to positive atti-

tudes toward the site for task-oriented uses.

Consumers who participate in an online com-

munity with an experiential orientation reap

additional beneﬁts. While the provision of use-

ful information produces functional beneﬁts

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for the consumer, the social aspects of partici-

pating in a community produces both emo-

tional and self-expressive beneﬁts (Duffy, 1999;

Meehan, 2000). In many online communities

resources are abundant (personal experience,

knowledge and opinions), giving and sharing

are culturally valued, and status is determined

by prowess, contribution, and reputation (Bam-

bury, 1998). The idea of both producing and

experiencing content along with the social in-

teractivity is very rewarding to experience-ori-

ented Internet users.

Encouraging online community is likely to

increase site stickiness as well as positive attitu-

dinal responses that may facilitate brand loyalty.

However, allowing for users to communicate

with each other on a company’s site does not

automatically foster a sense of community.

What is necessary is a critical mass of users with

a sense of collaboration, loyalty, and social trust.

These are necessary to produce social capital,

the sense of connection between individuals

that arises from familiarity and participation

that provides the energy for communities to

thrive (Hanson, 2000; Meehan, 2000).

However, the beneﬁt of increased brand loy-

alty arising from community building efforts

may be offset by the risks. According to Peppers

and Rogers (1997), we are experiencing a shift

in power from producers to consumers. This is

because virtual communities are more than so-

cial in nature; they represent a group with a

critical mass of purchasing power and a viable

communication network about products, qual-

ity, and prices. This consumer participation in

the marketing effort may be seen as a threat to

some companies.

Again, a search of corporate websites yields

numerous examples of corporate investment in

the belief that there is a relationship between

online community and building customer loy-

alty. One of the communities most written

about is EBay, Inc., where establishing a sense of

community and trust were two keys to the auc-

tion site’s success (Bradley & Porter, 2000). Two

other companies who have taken this strategic

initiative are AT&T WorldNet Service and Lycos

Quote.com. For Internet service provider

AT&T, the primary concern was customer re-

tention (Participate.com, 2001a). A community-

building program called AT&T WorldNet Com-

munityPort SM was launched in October 1998.

According to AT&T, the increased services of

online community building tools improved the

company’s ability to meet the needs of its cus-

tomers. One of the primary results was that

there was “a lower overall churn rate among

[AT&T’s WorldNet] customers, which really

points to the power of community to enhance

customer loyalty and retain customers” (Partici-

pate.com, 2001a).

The primary concern of Lycos Quote.com

was to “attract new visitors, keep them on the

site longer, and keep both [current and new

customers] coming back” (Participate.com,

2001b). Online community tools were imple-

mented which enabled investors to learn from

experts and communicate with peers. To meet

the needs of its customers, a variety of commu-

nication venues were offered such as message

boards, online seminars, live chats, and volun-

teer programs. Managers attribute the success

of the site to the implementation of these com-

munity-building tools. As of April 2000, the site

had over 4,000 users subscribed to its commu-

nity services, with an average of 7,100 unique

visitors per week.

A CONCEPTUAL MODEL FOR DEVELOPING

SITE BRAND LOYALTY

To conceptualize the process through which

customers become loyal to websites, we propose

a model that summarizes our previous discus-

sion and case study evidence (Figure 1). The

model identiﬁes only one of the potential indi-

vidual factors that inﬂuence the customer’s on-

line experience—usage orientation. As with tra-

ditional consumers in the search mode, online

consumers may exhibit a task-orientation on

some site visits and a more experiential orien-

tation on others. Thus, the model shows that

the factors that drive brand loyalty will differ for

task-oriented as compared to experiential uses

of the Internet. As noted earlier, those with a

task orientation will ﬁnd a site more valuable

when it allows them to complete their task efﬁ-

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VOLUME 15 / NUMBER 4 / AUTUMN 2001

ciently and effectively. In contrast, those with an

experiential orientation will ﬁnd a site more

valuable when it provides them entertainment

and enjoyment. Other individual factors (e.g.,

general involvement with the Internet) as well

as situational factors (e.g., time constraints)

might inﬂuence the consumer’s online partici-

pation as well.

The model also suggests that marketers can

focus on at least two areas to enhance the con-

sumer’s online experience and develop website

loyalty. Websites that foster personalization can

enhance the company’s ability to uniquely meet

the customer’s needs. Personalization not only

increases the bundle of beneﬁts to the cus-

tomer, but also raises the costs of switching.

Once the visitor has invested time and energy

into the personalization process, there is a dis-

incentive to start all over again with another

site. Finally, websites that encourage consumers

to build online communities clearly enhance

the participation level with the brand. For ex-

ample, customers communicate among them-

selves about potential new uses for and beneﬁts

derived from patronage of the brand.

Once brand loyalty is developed in a market,

what are the consequences? And, of what ben-

eﬁt is brand loyalty to the ﬁrm? As the model

shows, site brand loyalty leads to cognitive, af-

fective, and behavioral reactions from custom-

ers, such as repeat patronage and favorable at-

titudes toward the site and its brands, both of

which are obviously tied to increased revenue.

Furthermore, increasing brand loyalty is a

method of increasing the inelasticity of demand

(O’Guinn et al., 2000). Brand loyal customers

are generally less sensitive to price increases

because they value the beneﬁts of the brand.

And ﬁnally, increasing brand loyalty reinforces

the differentiation of the brand, which de-

creases the likelihood that customers will switch

brands in the face of increasing competition

(Crispell & Brandenburg, 1993; Dick & Basu,

1994; Meehan, 2000). Thus, site brand loyalty

leads to a competitive advantage for the e-busi-

ness. That is, customer participation in the e-

Business model will be fundamental in develop-

ing a sustainable competitive advantage

through customer value (Slater, 1996; Woo-

druff, 1997).

Empirical evidence from the marketplace

supports this model. For example, in the Lycos

Quote.com case study the online community

implementation had a positive impact in the

FIGURE 1

Customer Participation in Creating Site Brand Loyalty

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VOLUME 15 / NUMBER 4 / AUTUMN 2001

development of increased brand loyalty (Partici-

pate.com, 2001b). This increased brand loyalty

had measurable results for each consequence

predicted in the model: affective, cognitive, and

behavioral. Site users who became community

members increased the length of time spent on

the site, returned more often, and generated

more activity (as measured by community post-

ings) compared to users who were not commu-

nity members. A survey of site users indicated

that community members were more likely to

visit the site daily and refer others to it.

Through the increase in the site’s paying cus-

tomer base, seminar registrations, and other

activities, Lycos Quote.com reports a 535% re-

turn on investment for the online community

initiative (Participate.com, 2001b).

According to a recent Yankee Group Report,

these results are not atypical (Meehan, 2000). A

survey of companies implementing a commu-

nity strategy shows increases in brand loyalty in

both the business-to-business market and in the

business-to-consumer market. Return on invest-

ment (ROI) is inﬂuenced both directly and in-

directly through increased sales, reduced costs,

improved tracking of promotional expendi-

tures, and increased customer satisfaction. For

example, a 1999 survey indicated that across a

variety of websites, online shoppers who are

community members buy at a much higher rate

than non-members (Yankee Group Report,

1999). In some industries a successful commu-

nity implementation can yield ROI as high as

400% (Meehan, 2000).

POTENTIAL BARRIERS TO CUSTOMER

PARTICIPATION

There are, of course, potential barriers to in-

creasing customer participation. Many Internet

users are reluctant to supply personal informa-

tion;, in fact this issue topped the list of person-

alization concerns in a recent survey conducted

by Forester (Hagen, Howe, & Berman, 1998).

Marketers must be judicious in both obtaining

and using such information. Furthermore, per-

sonalization may not add value to many prod-

ucts and services. Clearly, customers must per-

ceive a value to the personalization before they

will relinquish their privacy and give of their

time to participate in the marketing effort.

However, if companies can deﬁne how person-

alization will provide the customer functional,

emotional, and/or self-expressive beneﬁts, then

they will be more likely to obtain the type of

participation that will lead to increased site

brand loyalty.

Similar issues pertain to building online com-

munities. Not all brands or companies can cre-

ate enough interest or have the requisite emo-

tional and social involvement needed to build a

sense of community. As more online discussion

groups, chat rooms, and communities develop,

the competition for the customer’s participa-

tion will greatly increase. Companies must un-

derstand the usage orientations and other indi-

vidual factors that motivate customers to join

these groups, and determine the types of bene-

ﬁts they will obtain. Websites that understand

the customer’s online experience will be best

equipped to provide customers with what they

need to make participation valuable, and thus

increase site loyalty.

A ﬁnal barrier to developing site brand loy-

alty is the steady progression of “me-too” com-

petitors who also will be vying for the custom-

er’s attention through attempts to personalize

their sites and build brand communities. Thus,

the key to sustainable site brand loyalty will be in

consistently providing superior customer value.

FUTURE RESEARCH

At this point in time there is a variety of case

study evidence supporting the positive effect of

website personalization and online community

on increasing customer loyalty. What is needed

in the next stage of study is further investigation

into the speciﬁc effects of consumer differences

such as task or experiential orientation. Fur-

thermore, a number of exciting and intriguing

research questions remain in terms of how cus-

tomer participation inﬂuences the creation of

site brand loyalty. First, extensions to this work

should seek to delineate other factors that

would impact the customer’s participation in

the marketing effort. Second, further investiga-

CREATING SITE BRAND LOYALTY

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VOLUME 15 / NUMBER 4 / AUTUMN 2001

tion into the consequences of such participa-

tion will provide marketers with the informa-

tion needed to implement participation

enhancing strategies. And ﬁnally, characteris-

tics of brands that support personalization and

community-building efforts require more ex-

ploration.

CONCLUSION

The traditional marketing concept calls for an

organization to focus on customers (Kohli &

Jaworski, 1990); the need for such a focus has

not changed. But is a website on the Internet a

product, a store, a service, a vendor, or a chan-

nel? The integration of these functions and the

blurring of these distinctions is the challenge of

building the new e-business model (Kalakota &

Robinson, 1999). Duncan and Moriarty (1998)

suggest that the common denominator among

all of the marketing functions is communication.

Communication is at the heart of relationship

marketing and is the basis for understanding

and developing customer value in the off-line

world; it becomes even more important in the

“many-to-many environment” of the Internet.

This new communication model shifts the

power by enabling customers to participate in

the marketing effort. Today the balance of

power between producers and consumers is in

equilibrium, and the boundaries between them

are blurring (Berthon, Holbrook, & Hulbert,

2000). In addition, just as with previous media

technologies (e.g., radio, television, printing

presses), the Internet has changed the way that

information is made available (Yadav, 2000). As

happened when other technologies became

available, ﬁrms may languish for a time until

they learn how to compete in the new environ-

ment. For example, what arose out of the one-

to-many market segment era, was a one-way

communication model where the ﬁrm imbued

its brand with an image to differentiate it from

all the other brands. What arises out of the

many-to-many marketing era will clearly be

more interactive and involve negotiation be-

tween the producer and the consumer as to

what a brand’s image and meaning will be. A

quote by Dick Anderson, General Manager of

IBM Web Management personiﬁes this perspec-

tive: “We have around 1 million visitors a week

to ibm.com. The activity that you have when you

have that level of trafﬁc coming to your site is a

very critical part of what your brand image is. In

fact, you might say it’s beginning to set the

brand image.” (2000, p. 70). Thus, in the new

age of interactive communication, producers

and customers are co-creating the e-business

brand. When customers desire this sort of par-

ticipation in creating an e-business brand, it

seems brand loyalty will also be fostered.

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