Loyalty programs (FPs) in tourism: Importance of long term relationship with customers

Abstract

This paper emphasizes the significance of developing long-term relationships with customers through the introduction of loyalty programs in everyday business. The paper further presents a link between the creation of a solid consumer base and their value in providing stable profits to companies for a longer period of time. Thus, in order to better understand the importance of customer lifetime value, authors gave a simple example how companies could calculate potential profit of a single consumer. Also, the paper explains the principle of CRM and presents the rules in creating incentives for customers to engage in frequent purchases of tourism products. Especially, authors of this paper highlight the need of developing frequency programs (FPs) as a guideline in creation of customized relationships with customers, using examples from companies operating in the tourism sector.