What is Electronic Loyalty (E-Loyalty)

Loyalty is defined as the repeated satisfaction of a customer with purchases of products from a specific firm or brand. Firms have been developing customer loyalty programs because it is generally less expensive for firms to retain existing customers than to attract new ones (Reichheld & Schefter, 2000). Although the correlation between customer loyalty and long-run firm profitability is under discussion, there is a consensus on positive effects of customer loyalty programs on firm sales (Reinartz & Kumar, 2002). Loyalty programs are also attractive for customers since they receive special offers or discounts. The notion of loyalty on the Internet, coined as electronic loyalty (e-loyalty), is a relatively new concept. However, because of their potential to increase sales and reduce online customer retention costs, e-loyalty programs have received much attention from both businesses and academic researchers. In what follows, we first summarize major theoretical results and empirical evidence on customer loyalty in the literature. We then analyze different types of popular e-loyalty programs on the Internet.