2004 | OriginalPaper | Chapter
Determinants and Behavioral Consequences of Customer Loyalty and Dependence in Online Brokerage — Results from a Causal Analysis
Author : Staack Yvonne
Published in: Operations Research Proceedings 2003
Publisher: Springer Berlin Heidelberg
Included in: Professional Book Archive
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With the rise of the internet, online brokerage emerged as a fast and cost effective way to trade securities. New competitors naturally focused on generating traffic to acquire many customers. However, in ebusiness, “natural” exit barriers (e.g., location) lose importance. As competitors are only a mouse-click away, online firms must convert first-time users into regular customers to regain acquisition costs. But what determines a customer to be committed to his online broker? And, if he can be successfully retained, what effect will that have on the company’s profits? Based on theoretical research, a generic model for the development, dimensions, and behavioral consequences of customer retention are proposed. Using causal analysis, this loyalty/dependence-model is successfully tested in online brokerage.