The Impact of Customer Loyalty Programs on Customer Retention in the Retail Industry (original) (raw)
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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.
IMPACT OF CUSTOMER LOYALTY PROGRAMS ON CUSTOMER SATISFACTION AND LOYALTY
Marketing literature talks abundantly about the behavioral aspects of the consumer in terms of his satisfaction and loyalty. This research was undertaken in the apparel retail sector with the sole purpose of establishing a relationship between loyalty cards and its impact on customer satisfaction as well as loyalty. Prudently, there should be a positive relation between usage of loyalty cards and loyalty towards the store. This study however showed different results altogether. It was found that satisfaction and loyalty levels were same irrespective of customers using a loyalty card or not using a loyalty card. This inference signifies that there may be certain other factors which determine the loyalty of the customer other than loyalty cards.
This paper proposed to study the relationship between loyalty program with customer satisfaction and customer retention. The data will be collected among final year students in Private Higher Educational Institution in Pahang, Malaysia. Reliability test using Cronbach Alpha and the correlation between variables will be tested using Pearson Correlation coefficient. Generally, this study aims to add several theoretical contributions to the loyalty program literatures, and provides some contribution to an organization in helping them to retain their customer and therefore sustain in the industry.
The Effectiveness of Loyalty Program Towards Customer Loyalty
ADVANCES IN BUSINESS RESEARCH INTERNATIONAL JOURNAL
In the business field it is very important to win the customer heart and the success of the loyalty program offered to the customers depends on particular rewards given by the service provider. Loyalty and customer loyalty in previous research has shown a significant relationship. There are problems occurs in loyalty program where the customers has a low awareness about the loyalty program, and the delayed in receiving the rewards. Loyalty program are divided into two parts. The first part is soft attribute loyalty program and second part is hard attribute loyalty program. Soft attributes loyalty program are ways of doing things or code of conduct that are intangible and was meant to give customer sense of recognition. Hard attributes loyalty program are basically tangible elements such as discounts card and free gift. A total of 100 respondents were chosen from one selected retailers in Penang and a purposive sampling technique was used. The result shown that both hard and soft att...
The Effects of Loyalty Programs on Profits and Customer Retention
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The purpose of study is to do an empirical analysis of the effects of customer loyalty and how it relates to customer retention and increases overall profits, particularly in the hospitality industry. The hospitality industry is continually changing and is encompassed in a highly competitive environment. Loyalty Programs are a form of marketing strategies that are set to attract, maintain, and enhance customer relationships (Yoo, 2011). The discussion of the study indicates that there is a significant increase in company profits due to customer retention and loyal customers. In any business customer loyalty is a factor that drives the overall success of the company. It can be quite challenging because there are many other variables that affect customer loyalty which effects customer retention and profits. Variables that affect customer loyalty are increased competition and duplicate of products and services. Another variable is Customer relationship management, which is a strategic necessity for attracting and increasing loyal customers. This relationship encompasses every service related process and direct interaction ultimately enhancing the customer's overall experience.
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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 ...
The Effect of Customer Loyalty Programs on Customer Retention in Pakistan
Journal of Business & Tourism, 2021
The aim of our study was to build an extremely significant understanding of the influence of client's loyalty programs on buyer's retention. The context of the current study was set for Pakistani consumers. The current study inspects the key role of loyalty programs such as devotion programs, point framework, level reward framework and non-fiscal projects on the dependent variable: client retention. A quantitative analysis method was adopted to achieve the objective of the research. For the data collection, questionnaires were distributed randomly among customers. Our findings suggest that there is a significant impact of loyalty programs for retaining valuable customers. Evidently, a significant effect was noted for different types of loyalty schemes such as Tier reward, Point and Non-monetary schemes.
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In the present world, organizations have identified customers as the foundation of the business‟ success. In marketing, finding customers who are willing to purchase goods or services is not enough to build a successful marketing strategy. More focus should be given to retaining a customer for so long as well as attracting a customer by utilizing marketing strategies. Hence the researcher has developed this study to find the impact between different customer loyalty program strategies with the customer retention in the textile industry in Sri Lanka. Point system, gift vouchers and gift items and discounts were taken as proxies for the independent variable and customer retention has been considered as the dependent variable. The researcher used five-point likert scale questionnaire to collect primary data from retail customers of textile industry and questionnaires were given to 160 people. The researcher has used Cronbach Alpha to find the reliability and KMO and Bartlett's Test...
Implications of Loyalty Program Membership and Service Experiences for Customer Retention and Value
Companies that offer loyalty reward programs believe that their programs have a long-run positive effect on customer evaluations and behavior. However, if loyalty rewards programs increase relationship durations and usage levels, customers will be increasingly exposed to the complete spectrum of service experiences, including experiences that may cause customers to switch to another service provider. Using cross-sectional, time-series data from a worldwide financial services company that offers a loyalty reward program, this article investigates the conditions under which a loyalty rewards program will have a positive effect on customer evaluations, behavior, and repeat purchase intentions. The results show that members in the loyalty reward program overlook or discount negative evaluations of the company vis-à-vis competition. One possible reason could be that members of the loyalty rewards program perceive that they are getting better quality and service for their price or, in other words, " good value. "