Determining Improvement Directions for Transactional and Relational Components of Websites

In this paper we propose and test a model of the stages through which firm websites become more advanced. The advancement of a website is reflected in the goals firms pursue with it. Since websites are used by customers during their decision process, we derive the website goals from the customer service life cycle. The concept of website advancement stages assumes that the website goals form one or more goal hierarchies. A goal hierarchy implies that a firm that pursues simpler goals may or may not pursue more advanced goals, but that a firm that pursues advanced level goals also pursues the more basic goals. We present the results of an empirical study of 380 firms with a website, sampled from a wide range of industries. Using the generalized partial credit model, we find two separate hierarchies of website development, namely a transactional and a relational dimension, each having three stages. The findings of this study offer insights to managers for advancing their websites and building sites with improved customer oriented strategies.