Relationship Marketing via online Trust:A look at the Accommodation Industry

Kim Shyan Fam, City University of Hong KongThomas Foscht, Karl-Franzens University of Graz

31st EMAC Conference – Braga, Portugal, May 2002

Purpose of StudyPurpose of Study

To examine the importance of trust as demanded by aconsumer using the internet service as opposed to that

provided by the company.

How to reduce the number of uncertainties andat the same time establish trust?

In the Internet …. We TrustTrust Based Process Web Site Features

Adapted from Levy & Lendrevie 1999

Calculation

Predictability

Intentionality

Capability

Transference

Tangibilisation

Interactivity

- formal guarantee of service and/or product; - extensive coordinates of the web provider

- brand notoriety and reputation; - brand credibility for electronic transactions; - presentations of past activity of the site (revenues, no. of customers served, etc)

- policy statement; - reinsurance of respect for privacy

- detailed information on operations; - certification

- support from well known brand; - security label; - testimonials

- design; - navigation (simplicity, clarity, consistency);- technical quality of the site

- electronic access to the Web provider (email, feedback & comments); - search & choice features;- feedback & confirmation of orders

Research MethodologyResearch Methodology

consumer = motel user, service provider = motel owner/operator

questionnaire distributed to both consumers and service providers

6 main centers in NZ were surveyed = Auckland, Wellington Christchurch, Dunedin, Queenstown & Wanaka

research instrument:24 items in total to measure the seven trust factors Scale : 1 = strongly disagree, 5 = strongly agree

Responses : consumers (108), Service Providers (44)

Demographic ProfileDemographic Profile

Consumer (n =108)

• 57% male• 47% age 26-45• 30% > NZ$70,000 pa• 23% professional• 16% services/sales• 63% use the internet daily• 26% have booked accommodation throughinternet• 58% will use in the future

Provider (n =44)

• 100% provided internet bookingservice• 82% of providers were receivingbookings on a daily/weekly basis• 50% have been online forbetween 1 and 3 years• 35% viewed the internet as aneffective marketing mediumfor their business

Communication Factor Individual

Communication Factor

Coefficient Alpha

Variables

Calculation Guarantee

Refund 0.75

Time

Predictability Reputation

Customer 0.71

Experience

Intentionality Privacy 0.78

Statement

Capability Operation 0.61

Confirmation

Transference Recognition

Security 0.69

Testimonials

Tangibilisation Visual 0.68

Speed

Interactivity Feedback

Users 0.75

Confirmation

ResultsResults

2

2.5

3

3.5

4

4.5

5

Privacy

Guarantee

Tim

e

Speed

Refund

Statem

ent

Coftion m

ail

Confirm

ation

Reputation

Security

Recognition

Experience

Feedback

Operation

Testim

onials

Users

Visual

Custom

er

Factors

Imp

orta

nce

Consumer

Provider

Consumer vs Provider’s views of the importance of the various trust factors

Consumer TrustCommunication

Factor

Description of consumer trust communication factor

Privacy Information Provided on a Web Site remains private andconfidential between the consumer and company

Guarantee Web sites must offer a guarantee of the products and serviceswhich they provide

Time Products and services must arrive, or be available at the arrangedtime, between the consumer and provider.

Speed Web sites need to be fast and accurate in operation and application

Refund Web sites must offer a refund of either the price paid orproduct/service offering.

Statement A statement, which indicates information, will not be utilised forany other purpose will increase consumers purchasing online.

Confirmation(email)

Email confirmation when purchasing or joining an Internet site.

Confirmation Formal confirmation of products and services in the form of digitalcertificates or logo’s.

Reputation The reputation of the Web provider will influence the consumersassociated level of trust with the site.

Security A security Label featured on a site will increase trust and consumerpurchase numbers online.

Consumers’ Most Important Trust Factors (mean > 4)

Provider TrustCommunication

Factor

Description of Provider Trust Communication Factor

Time Products and services must be delivered, or be available at the

arranged time, between the consumer and provider.

Guarantee Web sites must offer a guarantee of the products and services

which they provide.

Reputation The reputation of the Web provider will influence the consumers

associated level of trust with the site.

Privacy Information Provided on a Web Site remains private and

confidential between the consumer and company.

Confirmation Email confirmation when purchasing or joining an Internet site.

Service Providers’ Most Important Trust Factors (mean > 4)