The impact of loyalty programmes in a B-to-B context: Results of an experimental design (original) (raw)

Loyalty Programmes: Practices, Avenues and Challenges

2008

Complexity of modern business requires managers to strive for innovative strategies to acquire and retain customers in any product market field. As acquiring new customers is getting costlier day by day, business organizations have offered continuity/loyalty programmes to retain/reward existing customers and maintain relationships. The premise of CRM is that once a customer is locked in, it will be advantageous to both the organization as well as customer to maintain relationships and would be a win-win situation for both. Consumers find it beneficial to join such programmes to earn rewards for staying loyal. Through loyalty programmes, firms can potentially gain more repeat business, get opportunity to cross-sell and obtain rich customer data for future CRM efforts (Yuping Liu, 2007). This paper, exploratory in nature, attempts to provide a conceptual overview of Loyalty in organized retail sector, outlines practices of grocery retail outlets in Ahmedabad, the largest city in the s...

Loyalty program effectiveness: Theoretical reviews and practical proofs

Uncertain Supply Chain Management

Loyalty programs are widely used by organizations as a structured customer relationship management (CRM) tool to build and extend customer-supplier relationship. Although a large number of benefits are offered through them to both companies and consumers, loyalty programs face a set of planning and implementation pitfalls. Scholars or practitioners rarely discuss such pitfalls. Thus, this paper intends to add further values to the current literature by exploring/investigating the main loyalty scheme pitfalls, both theoretically and practically. The study explores a set of loyalty program planning problems and some of the execution's drawbacks, including clear aim need, loyalty program design, budgeting and experienced employee involvement. In addition to loyalty programs benefits and rewards offered, loyalty programs target customer selection problems using loyalty program promotional tools. For the study, 161 managers and employees who were involved in loyalty program planning and execution were surveyed. Smart-PLS was used to test the developed model and hypotheses. The study found that all studied loyalty program elements identified affected their planning and implementation. However, some of these elements where seen important to be considered when planning loyalty schemes, such schemes' benefits and rewards offered were still not planned properly and did not meet customer needs or even expectations and, in most cases, the loyalty programs' aims were not clear to all their stakeholders. The paper also provides additional discussion about additional issues of loyalty schemes planning and execution problems and proposes a set of solutions and recommendations, which might highlight some of the future venues with this regard. .

An Empirical Analysis of the Effect of a Retailers Loyalty Programme on Their Customers’ Loyalty

Global Business Review, 2017

Traditionally, marketing has focused on acquiring customers and gaining market share rather than on retaining existing customers. With increasing competition, there is a need for developing more sophisticated activities in order to retain the existing customers. Consequently, loyalty programmes (LPs) are being employed as a strategic business goal in order to gain customers’ loyalty. In this research, the main aim is to find whether these LPs affect customers’ loyalty towards the retailer by closely analyzing the loyalty card members of a leading Indian departmental store in Delhi. Quantitative research (regression and correlation) was conducted in the form of a questionnaire to test a model whereby the effect of value perception of the LP is tested on programme loyalty and the effect of programme loyalty is then tested on brand and store loyalty that together make the consumer a loyal customer. A total of 120 questionnaires were collected and the findings reveal that LPs do affect ...

Does the Implementation of Loyalty Programmes Lead to Gaining a Loyal Customer?

AD ALTA: 11/01, 2021

An increasing number of retailers and service providers are aware of the importance of loyalty programmes as a tool to support sales. The aim of this paper is to evaluate the benefits of loyalty cards for sales support at three selected companies in the Czech market, especially Kaufland, Globus and Tesco, and to determine whether the implementation of the loyalty programme leads to gaining a loyal customer. The basic source of data is the data obtained through an interview and the CAWI method, which consists in collecting data using an online questionnaire survey. The obtained data are evaluated using a prognostic marketing and comparison method. In total, responses were obtained from 121 respondents. The results of the research show that the implementation of loyalty programmes does not lead to gaining a more loyal customer. If the customer does not have to register to join the programmer, he does not perceive himself as loyal to the brand. The Kaufland Card programme has become th...

Loyalty Programs. Role, Structure and Potential Benefits

International Journal of Economic Practices and Theories, 2011

A loyalty program consists of an integrated system of marketing activities, aimed at increasing members' loyalty by rewarding customers according to their purchasing frequency and amount spent. Loyalty schemes, customer clubs and sales promotion techniques are the most common relationship tools used in marketing practice. To join the program and receive a card, consumers must fill in a registration form, providing demographic, behavioural or even psychographic data. Loyalty schemes and customer clubs offer long lasting benefits to participants. Sales promotion techniques can be used both as tools to attract new customers, as well as instruments to stimulate repurchase behaviour. The potential of a loyalty scheme to achieve members depends mainly on rewards value, diversity and timing. Similar, the success of clubs depends on whether customers perceive enough relational benefits according to their personal interests. Although currently, loyalty programs have become very popular, programs effectiveness and implicitly the managerial decision to implement them are determined by different factors, including: homogeneity of supply and products purchase frequency, competition and consumer demand characteristics and the internal environment of the company.

Consumer loyalty programs: impact of different modalities

DYNA

The present study structures a new modality for loyalty programs and compares it with traditional approaches. Initially, described here are two modalities of loyalty programs - individual and coalition, often used, being analyzed are their main characteristics, advantages and restrictions, market ranges in which they operate and the managerial implications of each modality. Subsequently, the study proposes a new program modality (cluster) and provides practical aspects for its use. The types of loyalty (loyalty to the brand, loyalty to the store or loyalty to the program) that are intended to be achieved in each program modality were also identified. Participation of partners, accumulation of benefits, options for recovery of benefits, market ranges, program management and program focus were the analyzed variables for comparison of the programs. This analysis revealed which approaches are most appropriate for each type of program.

Review of the theoretical underpinnings of loyalty programs

Journal of Consumer Psychology, 2011

A review of the extant literature reveals that the theoretical underpinnings of the majority of loyalty program research rest on psychological mechanisms from three specific domains-status, habit, and relational. We propose that to understand how loyalty programs actually work, a broader, more holistic research perspective is needed to account for the simultaneous effects across these three theoretical domains as well as both cross-customer and temporal effects. The contribution of this approach is a fresh research agenda advanced in 15 research propositions.

Advancing research on loyalty programs: a future research agenda

Marketing Letters, 2014

Despite the growing literature on loyalty program (LP) research, many questions remain underexplored. Driven by advancements in information technology, marketing analytics, and consumer interface platforms (e.g., mobile devices), there have been many recent developments in LP practices around the world. They impose new challenges and create exciting opportunities for future LP research. The main objective of this paper is to identify missing links in the literature and to craft a future research agenda to advance LP research and practice. Our discussion focuses on three key areas: (1) LP designs, (2) Assessment of LP performance, and (3) Emerging trends and the impact of new technologies. We highlight several gaps in the literature and outline research opportunities in each area.

Loyalty program benefits and their effect on relationship quality and loyalty to the retailer

International Journal of Research in Business and Social Science, 2023

Loyalty Programs (LPs) aim to increase profit by rewarding, with various benefits, customers who patronize the retailer. This study investigated the benefits LPs provide in the South African Fastmoving consumer goods (FMCG) marketplace and how these influence relationship quality and loyalty between retailer and customer. How the perceived benefits of LPs contribute to relationship quality (satisfaction, trust and commitment), and how they lead to loyalty are examined. To illustrate these relationships, a model showing three independent (perceived benefits, namely altruistic, consumeristic, and egoistic) and three dependent variables (relationship quality, namely trust, satisfaction, and commitment), plus customer loyalty, was developed. A quantitative survey was administered electronically over 11 days to a randomly selected sample of 5000 consumers per day from a commercial database, resulting in 1944 responses. After deletion of incomplete or inappropriate responses, 479 usable replies remained. Since this sample was self-selected, it should be considered a convenience sample. Structural equation modelling (SEM) with confirmatory factor analysis (CFA) was applied to test the hypotheses and develop the model. SEM indicated that respondents consider egoistic and consumeristic benefits as the same. Furthermore, trust and satisfaction manifest as a single construct. Both consumeristic and altruistic benefits had a significant positive relationship with this unified construct of trust/satisfaction, and the relationship between altruistic benefits and commitment was also positive and significant. Finally, although neither altruistic nor consumeristic benefits appeared to contribute directly to loyalty, a positive relationship existed between the new construct of trust/satisfaction and those of commitment and loyalty. The pathway to loyalty is indirect, and to reach this sought-after goal, relationship quality constructs must first be achieved.