A study of customer loyalty and privacy on the Web

James P Lawler, Pace University

Abstract

This study examines from simulation the effects of the privacy sensitivity of customers, the personalization practices or standards of retailers and the difficulty in locating alternate favorable sites, on the loyalty of consumers to a Web site. ^ The key finding of the study is that customer privacy sensitivity is a critical success factor that significantly impacts loyalty to a retailer. Customers have higher loyalty to sites that request the least information, while they have lower loyalty to sites that request the most information. Web retailers considering expanded personalization of products or services to customers, through increased personal information from the customers, need to rethink their practices. The study also found that difficulty in locating a favorable site is a success factor that impacts retailer loyalty, and that customers have higher loyalty to difficult to locate favorable sites on the Web. These findings are important at a time when consumers are empowered with Web technology to immediately shop competitor sites. ^ For retailers, the study contributes insight into customer sensitivity to personalization practices on Web sites. The significance of privacy to loyalty is a factor that needs to be considered seriously by retailers, if they are to compete for loyal customers. For researchers, this study initiates a new paradigm on the dynamics of loyalty, personalization and privacy on the Web. ^ No known studies have examined loyalty in the manner of this study. ^ Overall, this study furnishes a living framework to effectively research consumer loyalty to a Web site. ^

Subject Area

Business Administration, Marketing|Economics, Commerce-Business|Computer Science

Recommended Citation

James P Lawler, "A study of customer loyalty and privacy on the Web" (January 1, 2002). ETD Collection for Pace University. Paper AAI3126207.
http://digitalcommons.pace.edu/dissertations/AAI3126207

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