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Customer Satisfaction in Virtual Environments: A Study of Online Investing

Author

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  • Sridhar Balasubramanian

    (Department of Marketing, Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Campus Box 3490, McColl Building, Chapel Hill, North Carolina 27599)

  • Prabhudev Konana

    (Department of Management Science and Information Systems, B6500, McCombs School of Business, University of Texas at Austin, Austin, Texas 78712)

  • Nirup M. Menon

    (School of Management, University of Texas at Dallas, Richardson, Texas 75083)

Abstract

Many firms are moving to make virtual interfaces their primary, or even sole, points of customer contact. In this environment, some traditional service quality dimensions that determine customer satisfaction, such as the physical appearance of facilities, employees, and equipment, and employees' responsiveness and empathy are unobservable. In contrast, trust may play a central role here in enhancing customer satisfaction. We model trust as an endogenously formed entity that ultimately impacts customer satisfaction, and we elucidate the linkages between trust and other factors related to the performance of the online service provider and to the service environment. The model is validated using two samplesÔone comprising 225 online investors of a large online broker, and the other comprising 203 members of the American Association of Individual Investors (AAII). The findings suggest that perceived trustworthiness of an online broker is a significant antecedent to investors' satisfaction, and that perceived environmental security and perceived operational competence impact the formation of trust. The results have important managerial implications.

Suggested Citation

  • Sridhar Balasubramanian & Prabhudev Konana & Nirup M. Menon, 2003. "Customer Satisfaction in Virtual Environments: A Study of Online Investing," Management Science, INFORMS, vol. 49(7), pages 871-889, July.
    • Handle: RePEc:inm:ormnsc:v:49:y:2003:i:7:p:871-889
    DOI: 10.1287/mnsc.49.7.871.16385
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    References listed on IDEAS

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