The effect of retail customer loyalty schemes detailed measurement or transforming marketing? (original) (raw)
Related papers
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 ...
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...
An empirical analysis of the components of retailer customer loyalty programs
International Journal of Retail & Distribution Management, 2008
Purpose -This paper sets out to determine the benefits offered to customers and activities taken by retailers, whether or not they have formal customer loyalty programs, whether there are differences in the benefits/activities of retailers with and without formal loyalty programs and finally, whether specific benefits/activities of retailers can predict whether or not they have formal loyalty programs. Design/methodology/approach -A questionnaire was sent to a random sample of retailers in one US state. In addition, respondents reporting that they had formal loyalty programs received a telephone call lasting less than ten minutes designed to gather further information regarding their loyalty program. x 2 , Kendall's W and logistic regression analysis were used to test the purposes of this study. Findings -The most used benefits/activities of participating retailers are: demonstrating having the customers' interests at heart, providing financial incentives to selected customers, sending thank you notes to customers, and identifying customer preferences and recording them to guide future actions. In addition, a model was developed that was used to predict those retailers that had formal loyalty programs.
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. .
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.
2014
Several studies have established that it is more costly to acquire customers than it is to retain existing customers. These findings have led to a number of firms instituting loyalty programs as a means forincreasing customer retention. In this study we extend prior research by identifying which customers within a loyalty program are more likely to be retained, thus enabling firms to strategically allocate marketing resources according to the likelihood of individuals remaining as customers. Data from a European loyalty program were used for this investigation. The loyalty program allowed customers to make purchases from a network of partner vendors as well as out-of-network purchases.Logit models which yielded retention scores were constructed. Testing of the models showed that customers were more likely to be retained if they were heavy purchasers and/or maintained a low ratio of in-network to out-of-network purchases.
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...
The Impact of Customer Loyalty Programs on Customer Retention in the Retail Industry
2021
As the importance of the concept of customer loyalty increases, organizations are investing more towards loyalty programs for retaining their existing customers as well as attracting new customers. This study analyzes the literature to synthesize some debatable areas such as types of customer loyalty programs and their impact on customer retention. This research is carried out as a systematic review, evaluating ten recently published research articles due to their high relevancy. Our analysis identifies four major categories of customer loyalty programs in the retail industry namely, point system, rewarding system, loyalty card system and gift card system. Further, it is found that a rewarding system is the most effective type of loyalty program in the retail industry where retailers can be provided additional rewards based on the customers' loyalty levels. Through this study, it is found that all four types of customer loyalty programs are positively correlated with customer retention while the rewarding system has the highest co-relation with customer retention.