Over the last five years, mangers have discovered the full extent to which the opinion of the customer now plays in the success or failure of an organisation. Strong management, discipline and a good business plan are all of course essential in determining the success of a business, however nowadays many businesses fully appreciate the fact that it is customers who can make or break the company. Customers are possibly the greatest assets that a company can have, with them you have options, opportunities and potential success, without them you are doomed for failure.

With the majority of today’s organisations experiencing a continuous increase in competition, is customer loyalty the sparkle that these organisations require in order to gain the ultimate edge and excel over their respective competitors? Without doubt customer loyalty is priceless, but without customer satisfaction can customer loyalty really exist? The following essay will discuss this and many other related issues concerning online and traditional commerce, resulting in a conclusion, which will determine whether or not customer satisfaction is worthless and customer loyalty, is priceless.

There are thousands of organisations every week that introduce their business to the world of e-commerce. In the past few years a prime example of this would be the high street banks such as Halifax and Barclays. Banks such as these are not installing their cash machines at the rate they used to and are instead directing their customers onto their newly created websites where transferring money and instant balance checks can all be done at the click of a button.

Online organisations have the added bonus of being able to create improved relationships of trust and loyalty with customers, some of which would not have otherwise been possible though traditional methods of commerce. Compared with traditional organisations, those online are able to give customers another means to purchase products and services on the Internet and as a result lower customer service costs and an increased level of customer satisfaction is achieved.

One of the many reasons why online banking along with the majority of other services found online are far more convenient than traditional methods is the fact that the Internet in essence is open for 24 hours a day, 365 days a year. A customer cannot send a bank transfer from the high street bank when it is closed and they certainly would not be able to purchase a pair of trainers at three o’clock on a Sunday morning from the local shoe shop. With e-commerce however this is all made possible.

Not only that, customers can do this from the comfort of their own home, whilst having their questions automatically answered and without having to speak to any single member of staff, all within a matter of minutes. Online commerce does have its drawbacks however; hackers and credit card fraud are a major concern for all organisations participating in online activity. If an organisation has a website then without doubt, they are vulnerable to attacks.

High-tech systems with safeguards and firewalls can help to prevent such attacks, but no matter how much money and new technology is injected into securing an online system there is no such thing as a foolproof one. Customers are aware of this and state security as the main objection to passing over the bank details online. “If you really want your existing customers to become customers for life, start treating them as if they already were. ” (Daffy, 2001: 23). People do not realise that a customer has a whole lifetimes worth of spending ahead of them.

Too often a customer with fifty pounds worth of groceries in his/her trolley is overlooked and assumed that the potential sale will be worth the value of the goods in the trolley. Likewise, someone selling a car in a showroom may focus simply on the value of the car. In reality the satisfaction the customer receives after purchasing fifty pounds worth of groceries or a new car will ultimately determine his/her future purchases and loyalty towards the company or brand.

Concentrating solely on the potential profit generated from the current sale is an extremely easy mistake to make and companies who manage to overcome this and see beyond the present sale will be the ones who achieve the greatest customer loyalty and with that success. “According to a study last year from Bain & Company and Mindspring, online apparel retailers don’t break even on the average customer for 12 months, and online grocers don’t break even on customers for 18 months. “(www. zdnet. com).

Online organisations are now able to offer customers far more additional services that would not have otherwise been possible without the use of e-commerce technology. Answering customer questions, solving their problems and selling them additional products can now with the use of e-commerce be fully automated and computerised. An example of this would be on eBay. co. uk whereby once a buyer has won a particular lot from one of the millions of online auctions that they have running, an automated system within eBay searches for additional related products that the winning bidder may be interested in and recommends them to the buyer.

For example, if an eBay user were to complete the eBay checkout for an Adidas jumper, the eBay website would automatically bring up a list of auctions offering Adidas trousers, t-shirts and trainers alike. After the initial set up cost there are no major additional costs to run this system and seen as the more an item sells for, the more revenue eBay receives the system is basically generating extra revenue for the company effortlessly. A significant tool available to all online organisations is the use of cookies. Cookies store database information, personal custom page settings and preferences.

With cookies, companies are able to personalize information and to help with online sales and services. They eliminate the need to re-enter a user ID, and other requested data, each time a customer visits a site. For companies such as Tesco and Sainsbury’s cookies enable them to store shopping lists of previous purchases, making the customers next shop far more efficient and satisfactory. Plus the companies have the added bonus of knowing that the customer is more likely to be a loyal returning one due to the fact that they do not have to browse through the whole web site again searching for specific items.

With cookies online organisations are provided with a quick and convenient way of keeping site content fresh and relevant to the users interest. Within traditional commerce fingerprints and eye scans are the closest thing as such to a cookie; however it will never be possible to track as much information in traditional commerce compared to online commerce simply because the medium is not as digitalised, hindering the automated collection of data and information.

Traditional methods of attempting to achieve customer satisfaction have seen companies introducing loyalty cards and personalised credit cards. These have brought about a fresh look to the organisations and with that customer loyalty has followed. This however is immeasurable with the ease at which potential customer satisfaction can be gained from a website.