The impact of e-loyalty on the business of SME's

Abstract

This study investigates the impact that e-Ioyalty has on the business success of SMEs. E-Loyalty is defined as a customer's favourable attitude towards an on-line business which ultimately culminates in repeat purchasing behaviour. Eight factors (the 8Cs - customisation, contact interactivity, care, community, convenience, cultivation, choice, and character) have been identified as having a potential impact upon eloyalty. Trust and satisfaction play an important role in generating e-loyalty for electronic business, an aspect which will be elaborated upon within the ambit of the study. Although there is no universal definition of an SME, the definition given by the South African National Small Business Act (Act 102 of 1996) was adopted in this research. Furthermore, an indepth overview of business success was also presented. Business success can be described as more than profit-generation. A myriad of factors investigated influence the success of a business, more particularly; the study focuses on success factors pertaining to 'e-business'. An online survey was conducted on two SME e-business websites i.e., www.buycomputers.co.za and www.take2.co.za. Data collected from 176 online customers demonstrate that all these factors treated separately impact e-Ioyalty. However, when these factors are grouped together, only four of these constructs (i.e., 'Customisation', 'Choice', 'Cultivation', and 'Character') have a significant impact on e-Ioyalty. Furthermore, the data also returned that e-Ioyalty has an impact on two customer-related outcomes: 'word-of-mouth promotion' and 'willingness to pay more'. More specifically, the 'loyal' customer is 'less willing to pay more'. The high cost of attracting new customers on the Internet and the relative difficulty in retaining them make customer loyalty an essential asset for many online vendors.