Internet/e-business Strategies And Business Models Management Essay

How e-commerce Strategies can Enhance Customer Relationship
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How e-commerce Strategies can Enhance Customer Relationship
Introduction
The rapid advancement of technology has brought about new challenges for business organizations. The 21st century is characterized by a myriad of challenges that business leaders have to address in order to be competitive and successful. Majority of these challenges emanate from the dynamic technological environment. In a world without the internet, businesses would rely on systems that have worked for decades. However, in the advent of the internet, organizations have to find and implement strategies that would help them remain competitive. Recognizing the importance of customers to any business organization is important. Customers form the foundation of the success of a business and keeping them satisfied is the primary goal of any organization in a competitive environment. The continued technological advancement that characterizes the modern business environment means that existing and potential customers are increasingly becoming connected to the internet. Technological advancements also mean that companies are increasingly trying to reach customers via the internet. These e-commerce businesses face the challenges of attracting and maintaining customers whose needs they must address to survive in the competitive environment. This study aims to explore how e-commerce strategies enhance customer relationship.
Background of the Study
A key challenge for contemporary businesses revolves around understanding technologies and customers (Salojärvi, Ritala, Sainio, &Saarenketo, 2015). A firm may focus on one aspect while neglecting another. As an example, several analysts argue that Nokia’s inability to understand the customer contributed to its downfall (Salojärvi, Ritala, Sainio, &Saarenketo, 2015). This underscores the significance of customers in the success of e-commerce businesses. While an organization may focus on developing technologies, it may find itself neglecting arguably the most important asset of the business; the customers. It is imperative that an e-commerce firm finds the right balance between focusing on technology and customers. Given the immense role customers play in the success of e-commerce business, it is significantly important that organizations seek to improve relationships with them. An improvement of the relationship with customers brings the aspect of loyalty. Fostering loyalty is considered an integral objective for e-commerce businesses (Carter, Wright, Thatcher, & Klein, 2014). With loyal customers, the continuity of business operations is guaranteed. According to Salojärvi, Ritala, Sainio, &Saarenketo (2015), organizations that foster customer relationship consider customers as a strategic asset just like another intangible asset that the firm possesses. The authors also point out that there is a high level of mutual value that is created between the seller and the buyer in such relationships. In such organizations, there is a high focus by the management on retaining customers and treating them in a differentiated manner in order to maximize their value. It is also through the relationship with the customer that an organization is able to gather important knowledge that can be integrated into the production process.
According to Carter, Wright, Thatcher, and Klein (2014), customer loyalty is considered extremely important given that retaining the existing base is relatively cheaper compared to attracting new customers. Retaining of customers is a practice that a business organization ought to integrate into its business strategies since it is going to save it some costs. Customer loyalty is particularly important in e-commerce. As informed by Carter, Wright, Thatcher, and Klein (2014), there is a high likelihood of loyal customers to disregard offers from competitors and consequently decline to switch. This underlines the instrumental role that loyalty plays in e-commerce businesses. It is evident that with loyal customers, an e-commerce business is not only likely to save costs of attracting customers but it is also able to fight competition. The advent of the internet is characterized by a rise of e-commerce businesses, meaning that competition is always going to emerge. There is always going to be a business trying to compete with the existing ones. However, when a firm has loyal customers, it is evident that it can cushion it against these upcoming competitors. It is important to note that unlike firms that carry out their business offline, e-commerce companies face the risk of easily losing customers to competitors. A competitor in the online platform is just a click away,and a customer can decide to switch to them when they receive enticing offers. Therefore, while it is important to establish customer loyalty, it also poses a big challenge for e-commerce businesses.
It is important for a business to ensure that trust is established with the customer in order to boost loyalty. Trust in this case means that the customer is willing to be vulnerable to the firm’s actions of delivering products as specified. The customer here pays money and is willing to wait for the e-commerce firm to deliver products according to as specifications. As informed by Carter, Wright, Thatcher, and Klein (2014), given that e-commerce interactions are characterized by the lack of face-to-face interactions and geographical dispersion, trust is extremely important. These sentiments are agreed upon by Gajendra and Wang (2014) who point out that trust is an essential condition for successful transactions in the online platforms. This is primarily because in most cases, the customers have little knowledge about the e-business and therefore, they have to deal with the uncertainty that comes with the initial interaction. With a high level of trust, an organization is bound to boost its transactions with customers significantly. Establishing trust by e-commerce business, thus an important part of business strategy. A customer has to establish some level of trust first before going to transact with a business online. As informed by Gajendra and Wang (2014), the buyer makes use of word-of-mouth in order to gain trust towards an e-commerce business. As such, the customer has to undergo a series of information collection and evaluation so that they trust the seller. The whole process of establishing trust by the customer can form the foundation of a long-term engagement. Therefore, if through the information search and evaluation, the customer can gain trust towards an e-commerce business, there is a likelihood that a long-term relationship characterized by loyalty is going to be developed. Trust thus plays a vital role in the initial interaction between the customer and the business. It forms the foundation of a long-term relationship that is extremely important in the success of e-commerce business.
Given the significance of a firm’s existing and potential customers, business organizations have to ensure that their needs are addressed. A good relationship with existing customers creates loyalty that is bound to save the organization some costs. The operating costs of meeting the needs of such customers is bound to decline with time as they understand how the firm carries out its business. It is also important to mention the role of returning customer in spreading awareness about the business and its operations. Potential customers are also important to the operations of an e-commerce business. While potential customers can be acquired through the existing ones, it is important for an organization to foster trust, which is the foundation of a long-term engagement.
Purpose of the Study
This study seeks to find out how e-commerce strategies can improve customer relationship for organizations in today’s complex environment. The success of any business depends to a great extent on the strategies it has in place. Given the instrumental role that customers play in the success of an organization, it is essential that business leaders put in place in strategies that address their needs. In the field of e-commerce that is characterized by challenges that emerge frequently, it is necessary that the business strategies are aligned to the needs of the customers. This study thus seeks to examine how e-commerce businesses can tailor their strategies to boot their relationship with customers. By understanding how to enhance their relationships with customers with e-commerce strategies, businesses are placed in a better position to succeed both in the short-term and in the long-term.
Statement of the Problem
The advent of the internet has brought challenges for business leaders,and one of such challenges revolves around addressing the needs of the contemporary customer. A focus on process and product-related challenges can lead to neglect of one of the most important assets of an organization; the customer. With the high-level of competition that has been exacerbated by the growth of the internet, an organization can be forced out business if it does not take of the needs of the contemporary customer. It is easy for customers to switch to competitors if an organization does not meet their needs. It is through such switch that a business can become extinct. The instrumental role that customers play in the operations of business makes it necessary for leaders to explore and implement ways to enhance customer satisfaction. The loyalty of the customer is extremely important to the success of e-commerce firms as it reduces their operating costs. There is thus a constant challenge that e-commerce business face in trying to satisfy their customers. Given the significance of customers and their corresponding loyalty, it is extremely important that e-commerce firms find ways to enhance their relationship with them through their strategies.
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