Investigating customer loyalty programmes : evolving to true customer loyalty

Davis, William John Gronow (2011-12)


Customer loyalty programmes are widely regarded by companies as an effective means of achieving a strategic advantage over competitors and as a highly-effective platform to build lasting relationships with their most-valued customers. However, in today’s fast-paced world and loyalty-mature marketplace, customer loyalty programmes are showing signs of limited sustainability. Companies are starting to realise the importance of focusing on deeper, more meaningful, relevant and mutually-beneficial relationships with their customers in an attempt to sustain brand loyalty. The process of developing true customer loyalty involves companies adding extraordinary human level customer treatment. The purpose of this study is to explore whether customer loyalty programmes are developing true customer loyalty amongst customers. This research study explicitly investigates the views, attitudes, beliefs and perceptions of consumers partaking in customer loyalty programmes. At the outset of the study a literature review was conducted to explore and discuss literature pertaining to the key concepts of this study, namely customer loyalty programmes and true customer loyalty. This research study initially made use of a qualitative research method in the form of a focus group. The findings from the focus group contributed to the design of the questionnaire for the survey. A survey formed the quantitative component of the research. The survey questionnaire was distributed by means of a mall intercept to shoppers in a predetermined shopping mall. The ordinal data was analysed using descriptive and inferential statistical methods. The analysis indicated a marked disconnect between customer loyalty programmes and true customer loyalty. Customer loyalty programmes are generally regarded by customers as discount drivers rather than loyalty drivers. Customers indicated superior service, quality, trust and aligned values as key drivers in developing true customer loyalty. The majority of respondents stated that their selected customer loyalty programme was not developing true customer loyalty. The study provides a clear indication that customer loyalty programmes are not shifting attitudes that lead to ongoing behavioural change such as motivating multiple purchases. A key recommendation resulting from this study is for companies to develop customer-centric loyalty programmes that sincerely consider the needs of the customer, rather than merely attempting to drive sales through discount initiatives masked as customer loyalty programmes.

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