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"Deal of the Day" Platforms what drives Consumer loyalty?

  • "Deal of the Day" (DoD) platforms have quickly become popular by offering savings on local services, products and vacations. For merchants, these platforms represent a new marketing channel to advertise their products and services and attract new customers. DoD platform providers, however, struggle to maintaining a stable market share and profitability, because entry and switching costs are low. To sustain a competitive market position, DoD providers are looking for ways to build a loyal customer base. However, research examining the determinants of user loyalty in this novel context is scarce. To fill this gap, this study employs Grounded Theory methodology to develop a conceptual model of customer loyalty to a DoD provider. In the next step, qualitative insights are enriched and validated using quantitative data from a survey of 202 DoD users. The authors find that customer loyalty is in large part driven by monetary incentives, but can be eroded if impressions from merchant encounters are below expectations. In addition, enhancing"Deal of the Day" (DoD) platforms have quickly become popular by offering savings on local services, products and vacations. For merchants, these platforms represent a new marketing channel to advertise their products and services and attract new customers. DoD platform providers, however, struggle to maintaining a stable market share and profitability, because entry and switching costs are low. To sustain a competitive market position, DoD providers are looking for ways to build a loyal customer base. However, research examining the determinants of user loyalty in this novel context is scarce. To fill this gap, this study employs Grounded Theory methodology to develop a conceptual model of customer loyalty to a DoD provider. In the next step, qualitative insights are enriched and validated using quantitative data from a survey of 202 DoD users. The authors find that customer loyalty is in large part driven by monetary incentives, but can be eroded if impressions from merchant encounters are below expectations. In addition, enhancing the share of deals relevant for consumers, i.e. signal-to-noise ratio, and mitigating perceived risks of a transaction emerge as challenges. Beyond theoretical value, the results offer practical insights into how customer loyalty to a DoD provider can be promoted.show moreshow less

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Metadaten
Author:Hanna Krasnova, Natasha F. Veltri, Klaus Spengler, Oliver GüntherORCiDGND
DOI:https://doi.org/10.1007/s12599-013-0268-2
ISSN:1867-0202 (print)
Parent Title (English):Business & information systems engineering : the international journal of Wirtschaftsinformatik
Publisher:Springer
Place of publication:Heidelberg
Document Type:Article
Language:English
Year of first Publication:2013
Year of Completion:2013
Release Date:2017/03/26
Tag:Deal of the Day; Grounded theory; Loyalty; Structural equation modeling
Volume:5
Issue:3
Pagenumber:13
First Page:165
Last Page:177
Organizational units:Mathematisch-Naturwissenschaftliche Fakultät / Institut für Informatik und Computational Science
Peer Review:Referiert
Institution name at the time of publication:Mathematisch-Naturwissenschaftliche Fakultät / Institut für Informatik