CustomerLoyaltyofAmazonhowtobuildalonglastingrelationship

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1、Customer Loyalty of Amazon - how to build a long lasting relationshipCustomer Loyalty of Amazon-how to build a long lasting relationshipAbstractAim: The purpose of the study is to do the research that under the e-commerce business model, the impact factors of customer loyalty in an online shopping e

2、nvironment, how to improve the customer loyalty and how to build a long lasting customer relationship.Design/Methodology/approach: Through to the questionnaire survey research, design and collect sample data, combine with the Amazon Companys current operating mode and the theoretical, and also got t

3、he second data. In order to make the data become more and more reliable.Findings: The studying on improving customer loyalty under the B2C e-commerce model is significant for theory and practice. On the background of Amazon company, which is the biggest e-commerce company in America, according to th

4、e relevant literature and field surveys，the paper brings forward the importance of customer loyalty at the e-commerce business. It could come to the conclusion is how to improve the customer loyalty and then how to build the long lasting customer relationship.Contribution: The paper according to the

5、 characters of the online shopping and combine with the literature about the e-commerce and customer loyalty research, Put forward a certain hypothesis, through questionnaire survey on customers, and statistical analysis of the relationship between customer loyalty and its influence factors make an

6、empirically evaluation. The paper gives contribution to the e commerce business, how to build the long lasting customer relationship.Key words: Customer loyalty; Customer relationship; Satisfaction; Services; Online shopping websitePaper type: Research paperContents1. Introduction.1 1.1 Background K

7、nowledge .1 1.1.1 About Amazon .1 1.1.2 Customer relationship .2 1.1.3 Customer loyalty.3 1.2 Motivation of the research .4 1.3 Main Research Questions .6 1.4 Relationship between this thesis and previous studies .6 1.5 Limitation of the research .7 1.6 Outline of the study.72. Literature and theore

8、tical framework. 8 2.1 Relationship marketing .8 2.2 The evolution of customer relationships.8 2.3 E- Service quality.10 2.4 Customer satisfaction and customer loyalty .12 2.5 The relationship between satisfaction and loyalty .13 2.6 Sum up .14 3. Methodology information search. 15 3.1 Research Purp

9、ose .15 3.2 Quantitative and Qualitative Approach.16 3.3 Data collection .17 3.3.1 Primary data collection .17 3.3.2 Secondary data collection .18 3.4 Data analysis.19 3.4.1 The background of interviewees.20 3.5 Reliability & Validity .214. Empirical finding/presentation of a case study. 22 4.1

10、Introduction.22 4.2 Questionnaire analysis.22 4.2.1 The reason why customers choose Amazon?.22 4.2.2 Which elements customers care most? .25 4.2.3 The satisfaction in each aspect of the customers .26 4.3 Sum up .275. Case analysis. 28 5.1 Empirical finding analysis .28 5.2 How does the subject fit i

11、n with the theory and practices?.28 5.2.1 The evolution of customer relationship .29 5.2.2 E-Service quality.31 5.3 Amazons Novel Way to Build Customer Loyalty.31 5.4 Sum up .33 6. Discussion. 34 6.1 The answers to the research questions.34 6.2 Sum up .37 7. Conclusion. 39 7.1 Reflection and implica

12、tion of research questions.39 7.2 Recommendations and Contribution.40 7.3 Pitfalls of the research.41 7.4 Suggestions for further research .41 8. References. 43 8.1 Articles.43 8.2 Books .45 8.3 Website.46 9. Appendices. 48List of the figures:Figure 1: classify customers relationshipFigure 2: the di

13、fferences between quantitative and qualitative research methodsFigure 3: the information of the intervieweesFigure 4: the season why customers choose Amazon4Figure 5: what the customers care about when they are shopping on Amazon?Figure 6: the satisfaction in each aspect of the customersFigure 7: cl

14、assify customer relationshipFigure 8: shopping on AmazonFigure 9: shopping on AmazonFigure 10: what Amazon should do1. IntroductionThe first chapter is consisting of 5 parts. This chapter introduced the background of Amazon and elaborated the importance of the customer relationship and customer loya

15、lty. And then clearly sated the motivation of the paper. The last two parts are explained our research limitations and the outline of our thesis.1.1Background Knowledge1.1.1 About AmazonAmazon, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, which is the one of the earliest began to the

16、 e-commerce company. It was opened on the World Wide Web in July 1995 and today offers Earths Biggest Selection. It also included three subsidiaries, they are Alexa Internet、a9 and Internet Movie Database，IMDB. Amazon and other sellers offer millions of unique new, refurbished and used items (Amazon

17、, 2011). Amazon bookstore (amazon) is one of the biggest bookstores in the world. It provides 310 million books directory, more than the global any bookstore of storing books to 15 times more above. To run the special business needs neither large buildings nor great numbers of staff. Even though the

18、re are only 1600 employees in Amazon bookstore. The sales reach 37.5 million dollars per capita, which are 3 times those of Bames & Noble, the largest bookstore in the world, which has 27.000 employees (Hamiton, 2008). The commercial activities of Amazon bookstore focus on marketing and the afte

19、r service. That is, they aim at attracting customers, while building good image for the company.To become a customer-oriented company is the mission of Amazon (He & Zhang, 2003). The biggest online bookstoreAmazon began to profit in 2002. This is a piece of good news to global electronic commerc

20、e development. However, in the following years, electronic commerce suffered from loss. A survey conducted by the Temkin Group revealed that Amazon has been at the highest rates of customer loyalty in America. Three factors were taken into account in the chart of customer loyalty, including hesitati

21、on to switch to other company, readiness to buy more goods from the company and readiness to recommend it to others. The survey showed that customer loyalty had fallen to a new low with just 17% companies getting to the very strong mark for loyalty. Thanks to its ability to attract repeat customers,

22、 Amazon ranks high on the list of customer loyalty at the rate of 68%. The customers choose Amazon again because of its ability to get them the right results. Amazons performance in customer loyalty stands out when most online companies received significantly lower ratings (Grant, 2011).1.1.2 Custom

23、er relationshipCRM is a combination of hardware, software, process, applications and management commitment to improve customer service, retain customer and provide analytical capabilities (Romano & Fjermestad, 2002). The dynamic process of managing a customer-company relationship such that custo

24、mer elect to continue mutually beneficial commercial exchanges and are dissuaded from participating in exchanges that are unprofitable to the company (Wiley, 2002).CRM is not only the implementation of a technology solution about information on their customers, but also CRM could deliver strategic m

25、arket relationships. It could know all the things about their customers all the time. It could do a perfect data collection work and understand well what customers needs (Donaldson & OToole, 2007) Building sound relationships with customers is the one of the keys to make business successful. Hum

26、ans build relationships all their lives, be it with their friends, family, employers, colleagues or peers. As humans, we like to stick to what we know, and this behaviour reflects in the choices people make regarding which business organizations to deal with. Building customer relationships is as im

27、portant to business as the price and quality of what are selling. The enterprise goes through efforts to consolidate and further development with the customers to establish a long-term and stable relationship. In fact, the customer is willing to take this kind of feeling to tell their friends. The e

28、ffects of this ;propaganda; is absolutely much more effective than the enterprise cost a huge commercial shooting. Speaking of the enterprise, the customer retention can bring lower cost than attract a new customer. According to statistics, attract a new customer needs is the cost of maintaining an

29、old customer required cost 5 10 times (Xi, 2009).1.1.3 Customer loyaltyCustomer loyalty is usually viewed as the power force of the relationship between the attitude of individuals relative and repeat patronage. Customer loyalty is one of the most over used phrases in business today (Shaw, 2000). In

30、 the business environment the concept of customer loyalty is important because it is considered to be a profitable link. Loyalty is an economic necessity and a competitive necessity (Reichheld, 2001). Customer loyalty means to attract the target customers, in order to make them repurchase the produc

31、ts.The loyalty is as primarily an attitude that sometimes leads to a relationship with the brand to understand the customers spending behavior and satisfaction is very important. And the critical result of the customer behavior and satisfaction is customer loyalty (Nykamp, 2001). Along with market c

32、ompetition aggravating, the customer loyalty has become the determinant element that influences the enterprises long-term profits. As a sign of the market share, customer loyalty is more meaningful than that to customer measured market share. As a result, enterprises managers prefer to pay much more

33、 attention to improving customer loyalty aspects, so that to make the enterprise gain critical competitive advantage in the fierce competition. Economists do some researches on the TOP500 enterprises and find that, the loyal customers are not only doing repurchase enterprise products and services to

34、 save expenses of advertising and publicity, but also recommend the products or services to their relatives and friends. In another words, this kind of behavior becomes the personnel sources of the firms. It is the main profits of the company (Li, 2004). Customer loyalty is the important factor when

35、 the enterprise marketing working with the customers the managers must pay more attention to. Customer loyalty will help the enterprise have the long-term stable growth means of sales, lower marketing costs and rising profits.1.2 Motivation of the research By considering the globally business develo

36、ping, the rapid development of Internet technology and Internet users expansion type for humans society has brought new lifestyle and new business model. E-commerce is a new business model which relying on Internet development. It in a sense is a kind of internet innovation based on the traditional

37、business model. The increase numbers of business-to-consumer (B2C) e-commerce is chiefly according to the increasing numbers of people using the Internet from their own homes. Besides, the broadband and the changed way of customer consumption also contributed to the growth. The main reason that peop

38、le would like to shop online is very convenient for them with a lower price (Roper, 2004). In the United States on line retail sales are estimated to have growth from $172 billion in 2005 to $329 billion in 2010 (Johnson & Selnes, 2004). Online shopping exhibits different characteristics from tr

39、aditional shopping (Burke, 2002). Online shopping can offer greater product selection, accessibility and convenience without the restrictions of time and space (Brynjolfsson & Smith, 2000). There are also less tangible and intangible transaction costs than traditional shopping in an online shopp

40、ing process, such as product searches, price comparisons and delivery, which results in higher shopping convenience, values (Blake et al., 2005;. Childers et al., 2001; Grewal et al., 2004). Although the new business model developed very fast, there are some new problems which different from traditi

41、onal business model following. Such as the online shopping safety, the online shopping lack of experiences, customers cant trust online shopping easily etc. But to the sellers, the most important thing is how to sell more products to customers to obtain more profits. And get more and more loyal cust

42、omers and build a long lasting relationship with them. Furthermore, the customers are able to compare the advantages of e commerce sites and traditional stores easily. Just by clicking the mouse, e commerce sites can be switched to another site if you do not find anything you want; therefore setting

43、 up customer loyalty especially for e-commerce is more difficult than traditional business. However by considering current situation of e commerce, if sellers want to be succeeded they should attract more and more customers to shop online. In order to achieve this goal, it is necessary for seller to

44、 build the relationship with customers to strengthen customer loyalty. Thus the main purpose of this paper is to find out how to exactly strengthen customer loyalty of Amazon, and further to build a long lasting relationship with customers so that Amazon could keep going successfully.1.3 Main Resear

45、ch Questions1) Why do customers choose Amazon? What the element would be concerned with when customers are shopping online?2) How to improve customer loyalty and finally build long lasting customer relationships under the e-commerce business scale?1.4 Relationship between this thesis and previous st

46、udies Previous researches are focused much on the company itself. Even though it referred to customer loyalty, it much more preferred to how to increase the customer loyalty. Some of the researches focused on the successful exiting ways not to find out some new ways. And some of the researches focus

47、ed on why customer loyalty is very important. But this study is different from earlier work, focused on customer loyalty. In this thesis the authors try to study the different elements which played an important role of the customer loyalty. Try to figure out how much effect do the different elements

48、 make to the customer loyalty and find out which elements do the customer care most. There by Amazon could base on these to improve its own strategy to build a long lasting relationship with its customers. So that it could get more and more loyalty customers. Because of customer plays an important r

49、ole in the transaction. In this study, it could prove that customers could affect the company successful or not. To build a long lasting relationship with customers, to own more and more loyal customers, it is a way for any companies to succeed, especially for the e commerce companies, Amazon.1.5 Li

50、mitation of the researchThe quantitative data method was adopted through designing the questionnaire in order to gather the numerical and standardized data from the website and the people around ourselves. Thereby the collected data might not be exhaustive and objective enough. The study only consid

51、ered about online shopping behavior therefore it could not represent any issues which are relevant to practical behavior. And due to time limitation, it cannot make a deep and systemic survey on Amazon Company, our research and discussion just focus on the customers loyalty aspect, it not suitable f

52、or other research aspects of Amazon. 1.6 Outline of the studyThe paper is composed with 7 parts. Chapter 1 is the introduction. It introduced the case Study-Amazon companys background and elaborated the importance of the customer relationship and customer loyalty to the e-commerce business. Chapter 2 is the literature and theoretical framework. Its include the e-service quality; the importance of customer relationship, customer satisfaction and customer loyalt