Converting Web Site Visitors into Buyers
Nathan EarlPromotion Management
11/09/2009
Risk
“Using the internet involves a leap of faith. We type our credit cards numbers and other personal information in order to make a purchase over the Internet and trust that this information will not be used in unauthorized fraudulent ways” (Bargh and McKenna 2004)
RISK
Often times the Risk is high enough to keep online buyers from making online purchases
This avoidance has led experts to speculate that the immediate threat to e-commerce is consumers’ perception of RISK
Firms Respond to Threat
• Investing in Web site security
• Technology to protect consumers’ identity and personal & financial information
– By 2005, Web site security was a multibillion dollar industry
Consumers Want More
In spite of high investment in Web site security, Marketers still face challenge of convincing consumers of their firm’s trustworthiness
TRUST
• Establishing TRUST in a computer-mediated environment has proven to be very difficult
• A major challenge is discovering what the consumers’ perception / measure of TRUST actually is
Ways to Establish Trust
• Privacy Statements
• Security Statements
• High-Investment Web sites
Research
A recent large-scale study show indicate that despite consumers’ claims that privacy and security policies/statements are important for establishing credibility, consumers refer, instead, to a Web site’s “surface elements”, such as DESIGN
Article
Converting Web Site Visitors into Buyers: How Web Site Investment Increases Consumer Trusting Beliefs and Online Purchase IntentionsAnn E. Schlosser, Tiffany Barnett White and Susan M. Lloyd (2006). Journal of Marketing. Vol 70. p. 133-148
Investigating the impact on Web site design investments on consumers’ trusting beliefs and online purchase intentions
Conceptual Framework
• Authors developed a conceptual framework for understanding how “marketing signals” influence consumers’ trust in e-commerce settings– Marketing signals: Observable actions that
help explain the unobservable• Example—price reduction, advertising expenditures• Example—investing in high-end Web sites to help
convey the firm’s trustworthiness (unobservable)
Signals
Different “signals” can influence different PERCEPTIONS of the firms trustworthiness
This PERCEPTIONS has a direct correlation to the consumer making the actual purchase
Effects of Perceptions
The effects vary according to the purpose of the consumer visiting the firm’s site
• Searching• Browsing
Trust
• “Willingness to rely on an exchange partner in whom one has confidence”
• “Generalized expectancy held by an individual that the word, promise, oral or” written statement of another individual or group can be relied upon”
• “A belief in a person’s competence to perform a specific task under specific circumstances”
Trusting Beliefs
Cognitive Aspects
• Ability
• Benevolence
• Integrity
Represent a “sentiment or expectation about trustworthiness”
Ability
• Ability beliefs reflect the consumer’s confidence that the firm has the skills necessary to perform the job
Benevolence
• Benevolence beliefs reflect confidence that the firm has a positive orientation toward its consumers beyond an “egocentric profit motive”
Integrity
• Integrity beliefs reflect confidence that the firm adheres to a set of moral principles or professional standards that guide its interactions with customers
Trusting Intentions
“Represent a willingness to make oneself vulnerable to another in the presence of RISK”
PURCHASE INTENTION
Searchers
The consumers who “search” for product information
Searchers think about and are persuaded more by product information and have a higher visitor-to-buyer ratio
Findings
• 1st Study—Online purchase intentions depended more on their beliefs about the firm’s Ability rather than Benevolence or Integrity
– Ability is the belief most relevant to Performance
Findings
• 2nd Study—Privacy and Security statements communicated a firm’s benevolence and integrity, but not ability
– High End Web sites did not convey benevolence or integrity beliefs
Findings
• 3rd Study—Web site investment and Ability on online purchase intentions are specific to “searchers” and not “browsers”
• “Browsers”—benevolence and integrity were more important
Findings
• 4th Study—The higher the RISK perceived by the consumer, the more they relied on Ability beliefs
Conclusion
• Web site investment influences searchers’ intentions to buy online by influencing one component of trusting beliefs—Ability, versus Benevolence and Integrity
• Investment in High End Web sites is warranted if the majority of your visitors are “searchers”
Conclusion
• The higher the RISK perceived by the consumer, the more they rely on Ability beliefs– These beliefs are successfully conveyed to the
consumer by the firm through effective “signaling”, like high investment Web sites
Works Cited
Ann E. Schlosser, T. B. (2006). Converting Web Site Visitors into Buyers: How Web Site Investment Increases Consumer Trusting Beliefs and Online Purchase Intentions. Journal of Marketing , 133-148.Hoffman, D. L. (1996). Marketing in Hypermedia Computer-Mediated Environments: Conceptual Foundations. Journal of Marketing , 50-68.Kim, P. H. (2004). Removing the Shadow of Suspicion: The Effects of Apology Versus Denial for Repairing Competence versus Integrity-Based Trust Violations. Journal of Applied Psychology , 104-118.Kumar, N. L.-B. (1995). The Effects of Supplier Fairness on Vulnerable Resellers. Journal of Marketing Research ,
54-65.Moorman, C. R. (1993). Factors Affecting Trust in Market Research Relationships. Journal of Marketing , 81-101.Naquin, C. E. (2003). Online Bargaining and Interpersonal Trust. Journal of Applied Psychology , 113-120.
Paul Herbig, J. M. (1994). Marketing signals in industrial markets. Industrial Management and Data Systems , 16-21.Sitkin, S. B. (1993). Explaining the Limited Effectiveness of Legalistic 'Remedies' for Trust/Distrust. Organization
Science , 367-92.Sobel, M. (1982). Asymptotic Intervals for Indirect Effects in Structural Equation Models. SanFrancisco: Jossey-Bass.