Building a customer base in the electronic marketplace: an empirical exploration of the e‐tailing industry

Abstract

PurposeBuilding a customer base as an outcome of customer satisfaction has not been investigated empirically in e‐tailing industry. This paper seeks to fill this gap in the literature.Design/methodology/approachExplores the relationship between satisfying customers and building a customer base using data envelopment analysis (DEA). Data from the e‐retailing industry related to the input variables (e.g. customers' ratings on a set of e‐store attributes) and output variables (e.g. a proxy measure of “customer base”) are analyzed.FindingsPerformance scores for developing a customer base vary across product categories. Performance score is a good parameter for predicting future change on a unique number of visitors and on the competition pattern for a particular e‐tailer.Research limitations/implicationsFurther study can examine other drivers of a developing customer base (e.g. advertising, trust building, and strategic alliance) – thereby producing more robust evidence for customer base development in e‐tailing industry.Practical implicationsGood practices in the generation of customers and page view have been identified. Knowing the efficiency patterns of an e‐tailer makes it possible to guide managerial action by providing a measure of the extent to which different management actions at the e‐tailer can lead to higher future customer growth. Managers should realize that customers match realizations and expectations of product/service performance.Originality/valueThis study has identified satisfaction as the important driver of developing a customer base. It focuses on improving diagnosis of the performance of e‐tailers by assessing reach efficiency and page view efficiency separately.