Trust based marketing on the internet

In this paper we propose that the Internet enables trust based marketing through accurate and complete information and advice. We concentrate on shopping advice and develop a virtual personal advisor as an important aspect of trust building. We describe a Bayesian choice model and dialogue based computer interface to instill belief and confidence in the advisor's recommendations. A prototype system, called Truck Town, is developed for pickup truck purchasing. Consumer testing of the proposed site indicates it can build trust. Most customers would consider buying a vehicle through Truck Town and would be willing to pay for the service. A combination of the advisor site and an information intensive site (Microsoft Carpoint) together dominated the existing dealer system in terms of customer acceptance and trust by a factor of 4 to 1. The preference for the two Internet sites was equal. Analysis indicates segmentation in the site preferences. Consumers who are not very knowledgeable about trucks, who visited more dealers, and are younger and more frequent Internet users have the highest preference for the virtual personal advisor. This paper closes with a discussion of future research and strategic marketing issues raised by a virtual advisor based system. We predict that trust based Internet capabilities will be a major factor in future marketing.

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