10.1177/009207002236918 JOURNAL OF THE ACADEMY OF MARKETING SCIENCE FALL 2002 Reibstein / ATTRACTING CUSTOMERS TO ONLINE STORES What Attracts Customers to Online Stores, and What Keeps Them Coming Back? David J. Reibstein University of Pennsylvania Many businesses on the Internet in the late 1990s spent wildly, doing whatever it might take to attract customers to their sites. It soon became clear that the challenge was not simply to bring the customers in the door but also to retain these customers for future purchases. The quest was on to discover what tactics had the most appeal to Internet shop- pers. This study reveals survey and behavioral data drawn from Internet customers that reflect what was most impor- tant to the Internet shoppers and compare the factors for attraction versus retention. Since many have viewed the Internet as creating more perfect information for the buyer, the question arises as to how important price will be in the purchase process. What becomes clear from the analysis is that what attracts customers to the site are not the same dimensions critical in retaining customers on a longer term basis. As the Internet unfolded and the world of dot.com busi- nesses began to emerge, it became clear that the race was on to acquire customers. Many dot.com businesses were under the belief that the first to gain customers would be the “winners” in this space. As such, in the late 1990s, we witnessed excessive amounts of spending on advertising, such as Super Bowl 1999 and 2000 advertising by dot.coms, numerous promotions and “give-aways,” and other forms of enticement to attract customers to Internet sites. Much attention was given to the conviction of “first- mover advantages” on the Internet. As a result, there was little time to study what worked online and what did not. There was an urge to be there first. Of course, the premise of the first-mover advantage on the Internet was the belief that once the customers came, they would be “locked in” to using that site, thereby mak- ing it more difficult for later entrants to be able to attract customers. Hence, the quest was on for customer acquisition. Much of the willingness to wantonly spend in order to acquire customers was based on some either explicit or implicit notion of the lifetime value of the customer, a much-developed concept in the marketing literature. Why else would anyone be willing to spend more to acquire a customer than the margins generated from the one-time customer sale? This became all the more apparent when the next rallying theme on the Internet was that of cus- tomer retention. The central focus moved internally to assess what operational features were most effective in keeping customers so they would continue to shop at a par- ticular site. The Internet, while offering promise to the numerous aspiring entrepreneurs, is a dangerous territory. Because of the ease of switching and the ability to quickly gather near-perfect information, customers are awarded with a new set of power tools in their decision making. Armed with the latest information and prices of what a product is being sold for at numerous sites, there is little to inhibit customers from switching suppliers or from changing where they would shop. This makes the retention task all the more difficult. Without doubt, much of the expenditure for both the acquisition and the retention objectives was based on intu- ition and what the general managers felt were the most likely methods to succeed. Undoubtedly, much of the expenditure was also stimulated by managers who Journal of the Academy of Marketing Science. Volume 30, No. 4, pages 465-473. DOI: 10.1177/009207002236918 Copyright © 2002 by Academy of Marketing Science.