A strategic approach to building online customer loyalty: Integrating customer profitability tiers

Abstract

Purpose – The purpose of this paper is to present a strategic framework to managing online loyalty. Design/methodology/approach – The paper integrates concepts including a range of recently published (1993-2006) theoretical works in consumer loyalty and ongoing case developments in internet practice. Findings – Provides information and action approaches to consumer marketers that may increase the success providing want satisfying market offerings. Outlines the costs and benefits of some online customer loyalty building practices. By integrating the literature supporting lifetime customer value with the literature concerned with generating online customer relationships, it provides a pathway to profitable relationships. It also exposes the unintended problems that some online customer loyalty initiatives may create. Research limitations/implications – The theoretical concepts that form the foundation of the paper appear to have a significant application to consumer marketing but have not been tested empirically. Practical implications – Uncovers a previously unreported strategy for generating profitable online customer loyalty. Originality/value – This paper describes the nature and application of customer value tiers to an important marketing process. It offers the potential of increasing marketing success by allowing firms to maximize the value of their scarce service resources by serving profitable customers.