Analysis of Behavioural Factors of Loyalty on Digital Platforms

Abstract

This thesis investigates the impact of behavioral factors particularly habit formation and nudging, on customer loyalty within digital entertainment platforms. Digital entertainment platforms allow users to stream movies, tv shows and music through any device that has an internet connection. In order to stream, users pay a subscription fee usually on a monthly basis, or in some cases users can opt to use the free version with limited features. By integrating loyalty frameworks and modern behavioral economics, this thesis evaluates how platform design and integrated features influence users’ long-term commitment. Data was collected from respondents in both Botswana and the Czech Republic. Botswana represents an emerging digital market in Southern Africa while the Czech Republic represents a developed digital market in Europe. By selecting these two markets in different geographical locations, an investigation is carried out to see if there are similarities and differences in the user engagements patterns and loyalty outcomes when using these digital entertainment platforms. Using a quantitative research approach, data was collected from 88 respondents who actively use digital entertainment platforms. There were 50 respondents from Botswana and 38 respondents from the Czech Republic. The findings reveal that there is no statistically significant difference in customer loyalty between Botswana and the Czech Republic, suggesting that routinized behaviors and psychological attachments are a global phenomenon experienced by platform users across different geographical locations. The findings also revealed that there is a statistically significant positive relationship between behavioral engagement and customer loyalty meaning that the more users engage with the platforms and their features, customer loyalty is strengthened and these users are less likely to churn and will continue using the platform for longer periods. In conclusion, behavioral mechanisms embedded within the different platform design maintain and enhance customer loyalty.