The Effects of Digital Marketing on Customer Relationships

[Pages:42]Marko Merisavo THE EFFECTS OF DIGITAL MARKETING COMMUNICATION ON CUSTOMER LOYALTY:

AN INTEGRATIVE MODEL AND RESEARCH PROPOSITIONS

HELSINKI SCHOOL OF ECONOMICS WORKING PAPERS W-400

Marko Merisavo THE EFFECTS OF DIGITAL MARKETING COMMUNICATION ON CUSTOMER LOYALTY:

AN INTEGRATIVE MODEL AND RESEARCH PROPOSITIONS

Marketing February

2006

HELSINGIN KAUPPAKORKEAKOULU HELSINKI SCHOOL OF ECONOMICS

WORKING PAPERS W-400

HELSINGIN KAUPPAKORKEAKOULU HELSINKI SCHOOL OF ECONOMICS PL 1210 FI-00101 HELSINKI FINLAND

? Marko Merisavo and Helsinki School of Economics

ISSN 1235-5674 (Electronic working paper) ISBN-10: 952-488-006-7 ISBN-13: 978-952-488-009-1 Helsinki School of Economics -

HSE Print 2006

The Effects of Digital Marketing Communication on Customer Loyalty: An Integrative Model and Research Propositions

ABSTRACT

The cost efficiency and diversity of digital channels facilitate marketers' frequent and interactive communication with their customers. Digital channels like the Internet, email, mobile phones and digital television offer new prospects to cultivate customer relationships. However, there are a few models explaining how digital marketing communication (DMC) works from a relationship marketing perspective, especially for cultivating customer loyalty. In this paper, we draw together previous research into an integrative conceptual model that explains how the key elements of DMC - frequency and content of brand communication, personalization, and interactivity - can lead to improved customer value, commitment, and loyalty.

Keywords: digital marketing communication; personalization; interactivity; customer loyalty; customer relationship management

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CONTENTS

1 INTRODUCTION..........................................................................................3 2 DEFINITION OF DIGITAL MARKETING COMMUNICATION........6 3 AN INTEGRATIVE MODEL OF THE EFFECTS OF DIGITAL MARKETING COMMUNICATION ON CUSTOMER LOYALTY .............7

3.1 Regular Brand Communication ? Benefits of Being in Touch with Customers ............................................................................................................9

3.1.1 Frequency ............................................................................................................. 9 3.1.2 Information Processing ...................................................................................... 10 3.1.3 Brand Relationship............................................................................................. 11 3.1.4 Perceived Value.................................................................................................. 11 3.1.5 Commitment....................................................................................................... 12 3.1.6 Content ............................................................................................................... 14

3.2 Personalized Brand Communication.......................................................16 3.3 Interactive Brand Communication ..........................................................18

3.3.1 Interacting and Spending Time with a Brand..................................................... 21

3.4 Mediating Factors....................................................................................23

3.4.1 Customer Characteristics.................................................................................... 23 3.4.2 Involvement........................................................................................................ 24 3.4.3 Relationship........................................................................................................ 25 3.4.4 Situational factors............................................................................................... 27

3.5 Outcomes of Digital Marketing Communication for Customer Loyalty 28 4 DISCUSSION ...............................................................................................29 REFERENCES ....................................................................................................31

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