Effectiveness Of Loyalty Programs Research Articles

Brand Churn A Significant Percentage of Customers Leaving for Competitors

Abstract: Brand churn, characterized by a significant percentage of customers leaving for competitors, poses a substantial challenge for businesses across industries. To understand the underlying factors contributing to brand churn and devise effective retention strategies, a survey questionnaire method was employed. The questionnaire was designed to gather insights into customers' reasons for switching brands, their perceptions of competitor offerings, and their preferences for brand loyalty incentives. A diverse sample of respondents representing various demographic segments and purchasing behaviours was targeted to ensure comprehensive data collection. The survey findings revealed key drivers of brand churn, including dissatisfaction with product quality, pricing competitiveness, and customer service experiences. Additionally, insights into customers' perceptions of competitor brands and the effectiveness of loyalty programs in retaining customers were garnered. The results of this survey provide valuable insights for businesses seeking to mitigate brand churn by addressing customer needs and preferences effectively. By implementing targeted retention strategies informed by these findings, businesses can enhance customer loyalty, reduce churn rates, and maintain a competitive edge in the marketplace.

Redesigning loyalty marketing for a better world: the impact of green loyalty programs on perceived value

PurposeGiven the controversial nature of the effectiveness of loyalty programs (LPs), this paper examines the effect of a new type of LP, namely green LPs, on consumers' perceived value of LPs. Specifically, the authors identify three types of green LP design and test their impact on perceived value.Design/methodology/approachAn experimental protocol involving 1,016 shoppers was adopted in order to analyze the three types of green LPs identified in the literature.FindingsSupported by social exchange theory (SET), the results show that a green LP can influence the perceived value of LPs. Such programs can drive psychological value in addition to the economic value linked only to monetary incentives. LPs rewarding sustainable behavior appear to be the most significant generators of value.Originality/valueSince corporate social responsibility (CSR) is now critical to a company's success, this study investigates how firms can integrate it in order to improve the effectiveness of their LP design.

Time‐Limited Loyalty Rewards*

I examine an infinite‐horizon model in which a monopolist can commit to sell the good to repeat customers at a reduced price. Such an option may or may not expire. Consumer preferences are subject to temporary shocks, which implies that loyalty rewards can raise efficiency by contracting prior to private information arrival. I show that expiration dates enhance the effectiveness of loyalty programs by disciplining consumers, who otherwise would excessively delay the redemption of rewards, and reduce the frequency of purchases. Moreover, if firms can influence future regular prices then loyalty programs become more profitable, but may harm consumers.

Marketing Research of Effectiveness of Loyalty Programs of Retail Trade Enterprises

The formation of customers/clients’ loyalty, along with the growth of the company's profitability, sales volume and market share, is one of the main objects of any business. The increase in competition makes companies to use actively different ways to attract and retain customers. The name – “incentive programs” - indicates that the main goal of these programs is to provide consumers with benefits. The best way to encourage people is to give them some benefit - material, emotional, psychological. The pandemic has shown the power of investing in the customer experience, that has driven brands and consumers to technology, and many marketers recognize that it will play a tremendous role in shaping the customer experience. Based on the relevance of the problem, the purpose, aim of the research is to research consumer loyalty to brands in the field of retail sales. In the research there is used a quantitative research method that is based on the questionnaire survey. This method definitely gives opportunity to study viewpoints of population in a measurable way. At Akaki Tsereteli State university, there was conducted a marketing research, 195 respondents were interviewed throughout the city – Kutaisi. The viewpoints of the clients surely and definitely confirm that those programs can be extremely effective in order to influence clients in the retail field. The majority of the clients say that they are strongly attracted by the self-service retail shops, if the program is quite attractive and offered products and services have high quality. Keywords: Loyalty, Loyalty program, pandemic, discount, brand.

Effects of Service Quality, Loyalty Programs, Pricing Strategies, and Customer Engagement on Firms’ Performance in Egyptian Travel Agencies: Mediating Effects of Customer Retention

ABSTRACT Service quality, loyalty programs, pricing strategies and customer engagement play a vital role in customer retention and firms' performance. The current study aims to investigate the service quality, loyalty programs, pricing strategies and customer engagement, and to examine the mediation effects on firms' performance. A quantitative method was employed using a survey to collect data from a random sample of relevant managers in travel agencies. Structural equation modelling (WarpPLS) is used to test the research propositions. The research uses a survey for data collection of 350 responses from travel agents' managers to test the associations between service quality, loyalty programs, pricing strategies and customer engagement, and customer retention and firms' performance. The finding revealed that the service quality, loyalty programs, pricing strategies and customer engagement have positively affected customer retention. In addition, customer retention has positively affected firms' performance. These findings have empirical implications for policymakers, trip planners, travel marketer's, governments and academics.

Quantifying the effect of status in a multi-tier loyalty program

Multi-Tier Loyalty Programs (MTLPs) have become a popular marketing instrument to develop customer-firm relationships. Within a MTLP, customers are assigned to different tiers based on their purchase behavior. In this article, we examine whether and when tiers in the MTLP are effective in influencing customer purchase behavior, specifically share of wallet (SOW). A unique business-to-business dataset of a firm in the German agricultural market from 2009 to 2017 is used for the analysis. Data is available on the customer-specific tier level in the MTLP each year. We utilize a Tobit-style panel regression model for the analysis which is inspired by the Regression Discontinuity Design approach. This study makes several important contributions. First, it examines the effect of status in MTLPs and uses causal design to quantify the hitherto intangible effect of customer tiers. Second, this study reveals important insights on how the tier levels interact with other drivers of customer-firm relationships. Third, we use an interesting dataset from a B2B market and thereby contribute to the limited existing literature on the effectiveness of loyalty programs in B2B markets. Armed with a new understanding of how customers respond to tier levels or the negative effects of tenure especially in the highest tier, academics and managers gain new perspectives of whether and how loyalty programs affect customer behavior and drive desired outcomes in the marketplace.

Do customer loyalty programs enhance customers buying behaviour in supermarkets in Kenya?

This study aims to examine the effect of customer loyalty programs on customer buying behavior in supermarkets in Nairobi City County, Kenya. Specifically, the study sought to establish the effect of reward programs, point accumulation programs, and reward frequency programs on customer buying behavior. A descriptive research design was employed, and questionnaires and interview guides were used to collect data. A sample of 384 respondents was selected from a target population of 985,016 using the non-probabilistic purposive sampling method. Findings indicate that consumers’ level of preference for the particular supermarket loyalty programs was high in specific supermarkets. It was also found that points’ redemption rates differed among the supermarkets. The majority of the supermarkets allowed customers to redeem their points at any time and customers preferred benefits connected to frequent visits and fast points reimbursement based on the reward method used. The study concluded that point cumulative program and reward method program positively and significantly affects consumer buying behavior but reward frequency negatively and significantly affected customer buying behavior. The study recommended that the point accumulation program should be made easier for customers by the marketing departments in the supermarkets.

The Effect of Customer Loyalty Programs on Customer Retention in Pakistan

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.

Assessing the Influence of Loyalty Programs on Customer Satisfaction by Mobile Phone Users in Selected Public Universities in Western Region of Kenya

Customers have become more sophisticated and they are enjoying more alternative options of brands, for any organization, there is a need to understand what kind of service or products it offers, and for whom. Organizations have embraced the concept customer relationship management practices since it focuses on managing relationship between its current and prospective customer base hence helping in building long lasting relationships which consequently give the organization the joy of retained customers. The specific objective of study was to determine the effect of loyalty programs on customer satisfaction. The study was guided by the social exchange theory which focused on the fundamental principle that humans in social situations choose behaviors that maximize their likelihood of meeting self-interests in those situations. Descriptive and explanatory research designs were utilized in this study and the following networks were sampled; Safaricom, Airtel, Orange and, yuMobile A questionnaire was used to collect data from sample size of 250 respondents who were sampled from the staff of public universities in the Western region which included Moi, Masinde Muliro, Maseno, Jaramogi Oginga Odinga, University of Eldoret and Kisii University. Data collected was analyzed by use of descriptive and inferential statistics. Multiple regressions were used to establish the effect between customer relationship management practices, customer satisfaction and customer Retention. Further, Loyalty programs had significant effect on Customer satisfaction, also it was established that, Customer satisfaction was significant in predicting customer retention. The study recommends that service providers should put more emphasis on Customer Relationship Management Practices since they influence customer satisfaction and hence customer retention. The study provides new theoretical insight into factors influencing customer retention by incorporating customer satisfaction as a mediator in the relationship between Customer Relationship Management Practices and customer retention.

Brand equity effects on financial performance in Japanese fashion market: applying complexity theory via fsQCA

ABSTRACT This study applies complexity theory to examine the effects of loyalty programs (LP) and consumer characteristics, as well as the perceptional and behavioral brand factors that influence brand equity and firm financial performance. It focuses on 14 Japanese fashion brands for a specific duration of the COVID-19 pandemic. Further, this study considers the effects of complex components on performance (brand equity and firm financials) by testing the asymmetric relationships that exist between brand equity, LPs, and financials via fuzzy-set qualitative comparative analysis. We mainly address two research questions: (1) Do insights on brand equity from young generations contribute to firm financial outcomes? (2) In the declining fashion market, do LPs affect brand equity and firm financial performance? The results present causal configurations that could either directly, or indirectly, and positively, or negatively, influence outcomes (brand equity and firm financials) depending on various contexts, such as consumer demographics and shopping conditions.

Loyalty program and communication effectiveness as drivers of store loyalty

PurposeThe purpose of this study is to determine the direct effect of a loyalty program on program loyalty and store loyalty and to determine the role of communication effectiveness as a mediating variable in moving customers from program loyalty to store loyalty in the context of micro, small and medium enterprises (MSMEs).Design/methodology/approachRespondents of this study were 100 customers of the MSMEs that sell Batik products in Cirebon, Indonesia who were selected by the purposive sampling method. This study focuses on primary data collected through a structured questionnaire. Data were analyzed using SmartPLS 3.0 to determine the causality relationship between variables and to test the communication effectiveness as a mediating variable.FindingsThe results of this study indicate that the loyalty program has a significant effect on program loyalty; program loyalty has a significant effect on store loyalty and communication effectiveness, and communication effectiveness has a significant effect on store loyalty. Other results indicate that communication effectiveness partially mediates the relationship between program loyalty and store loyalty.Research limitations/implicationsDespite the significant implications, this study has four limitations. First, the research results cannot conclude the store in general because the sampling of this study is limited to MSMEs only. Future research is needed to explore more deeply to compare store loyalty to MSMEs and non-MSMEs. Second, this research is only aimed at MSMEs that have loyalty programs. Future research can be carried out by comparing MSMEs that have loyalty programs and MSMEs without loyalty programs. Third, this study only uses two independent variables and one mediating variable. As is well known, there are many other variables that are antecedents of store loyalty. Future research needs to be done to explore the effect of other variables (mediating and moderating) on store loyalty, such as service quality, company image and customer satisfaction. Fourth, the research sample is only 100 respondents. Future research should use a larger sample as this research is customer-based.Practical implicationsThis study has a significant impact on MSMEs management by providing strategies that can increase and retain customers who have high store loyalty. MSMEs need to design loyalty programs to influence customer perceptions of status, buying habits and relationships with companies. If a customer associates a high value with loyalty program membership, the customer is more likely to find the communication relevant and credible, leading to effective communication that can increase store loyalty.Social implicationsThis study provides real strategies and opportunities for MSMEs to develop so that they can survive or compete with similar companies. It is hoped that MSMEs will be able to absorb more labor so that it can increase the contribution of MSMEs to the national economy.Originality/valueThis study addresses the inconsistency of various results from previous studies regarding the relationship between program loyalty, loyalty programs, communication effectiveness and store loyalty, both directly and indirectly. In addition, several studies have been carried out in large corporate contexts. However, according to the authors’ knowledge, this research is for the first time being conducted in the context of MSMEs.

Do preferences for private labels respond to supermarket loyalty programs?

This paper examines the effects of supermarket loyalty programs (LPs) on the demand for private labels (PLs). Using transaction level data on grocery purchases and individual level information on the membership of loyalty programs, I estimate a model of demand in which membership may affect the consumers’ valuation for PLs, their sensitivity to price changes and have spillover effects on both named brands (NBs) and rivals’ PLs. My identification strategy of the membership effect exploits observed variation in shopping patterns at the consumer level over time and includes a control function using LP characteristics as instrumental variables to account for a potential selection bias related to unobserved factors of the membership decision. I find a significant effect of LPs on consumer preferences for PLs. Compared to non-members, membership reduces consumers’ price sensitivity for the products sold by the supermarket they are members of, but increases it for products sold by supermarkets they are not members of. These effects are weaker for households that are members of the LPS of multiple supermarkets. Further, I use my demand model along with a supply model to simulate counterfactual scenarios in which supermarkets unilaterally modify their LPs to make it more difficult for customers to benefit from them. I find a considerable decrease in the demand for PLs and an increase in the demand for NBs. In response, supermakets decrease PLs’ prices and increase NBs prices in order to partially offset the impact on PLs’ demand.

Effectiveness of Loyalty Programs in Customer Retention: A Multiple Mediation Analysis

The impact of loyalty programs on customer retention was investigated in this study. Concomitantly, the mediating effects of brand association and customer satisfaction between loyalty programs and customer retention were also tested in three ways, viz., in parallel, distinct, and sequential through a series of structural models. The study focuses on the Malaysian national car sector, and empirical data was collected from 313 Malaysian national cars users through convenience sampling. This explanatory, quantitative research adopts a questionnaire as a survey instrument, and the collected data was first subjected to normality and reliability assessment followed by confirmatory factor analysis, structural equation modeling using IBM SPSS AMOS 24. Multiple mediation analysis was then conducted, and results were confirmed through bootstrapping. Findings show that there is a significant positive impact of loyalty programs on customer retention. The brand association has a full mediation effect between loyalty programs and customer retention when tested in parallel with customer satisfaction; on the contrary, customer satisfaction demonstrated an insignificant mediation effect. On the other hand, when tested distinctly, brand association showed a partial mediating effect while there was no mediation effect of customer satisfaction. Besides, customer satisfaction and brand association demonstrated sequential partial mediation.

Loyalty Marketing Strategies and Tools of their Implementation

The article considers the factors of formation of consumer loyalty to the company and brand, loyalty strategies and tools for their implementation. The authors substantiate the importance of forming consumer loyalty. The list of strategies that lead to the formation of general consumer loyalty to the company and brand is defined on the example of a company-manufacturer of freshly roasted coffee. The combination of marketing tools that ensure the success of the loyalty strategy is considered. There are groups of consumers by level of loyalty, which must be taken into account when selecting strategies and measures for the formation of loyalty. The complexity of evaluating the effectiveness of loyalty programs is investigated and the main metrics for quantitative measurement of the level of loyalty are proposed. It is concluded that the result of assessing the level of consumer loyalty is to make an informed decision to develop new loyalty programs or adjust existing ones to create maximum consumer loyalty. Recommendations for improving consumer loyalty management strategies and relevant marketing tools are provided.

The economic worth of loyalty programs: An event study analysis

Despite significant research and progress in examining the effects of loyalty programs on consumer behavior and firm performance, the firm value implications of these programs are still unclear. The article investigates whether loyalty program introduction affects firm value, as measured by abnormal stock returns. The authors test the hypotheses empirically by conducting an event study of 260 announcements which cover 110 firms in the United States across different industries for 18 years from 2000 to 2017. Findings reveal that the introduction of loyalty programs, on average, positively influences firm value. The results of this study also reveal the existence of contingencies including synergies with complementary market-based assets and market conditions of lower uncertainty in determining the value of loyalty programs. The authors conclude that the value of loyalty programs is greater when the perceived risks of purchase are lower.

Analisis Pengaruh Bauran Pemasaran, Loyalty Program, Intentions to Switch Terhadap Kepuasan Pelanggan dan Implikasinya Pada Loyalitas Pelanggan PT. Bank Negara Indonesia 46 Merauke

This study aims to analyze the effect of marketing mix on customer loyalty, analyze the effect of loyalty programs on customer loyalty, analyze the effect of intentions to switch on customer loyalty, analyze the effect of customer satisfaction on customer loyalty, analyze the effect of marketing mix on customer loyalty through customer satisfaction and analyze the effect loyalty program to customer loyalty through customer satisfaction PT. Bank Negara Indonesia 46 Merauke. The sample in this study was 76 customers. The analysis technique uses path analysis. The marketing mix has a significant positive effect on customer loyalty. The loyalty program has a significant positive effect on customer loyalty. Intentions to switch has a significant negative effect on customer loyalty. Customer satisfaction has a significant positive effect on customer loyalty. The marketing mix does not have a significant effect on customer loyalty through customer satisfaction. Loyalty programs do not significantly influence customer loyalty through customer satisfaction. Intentions to switch affect customer loyalty through customer satisfaction PT. Bank Negara Indonesia 46 Merauke.

The Effectiveness of Loyalty Program Towards Customer Loyalty

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 attribute has a significant relationship with customer loyalty.

THE ROLE OF DIGITAL INNOVATION, PERCEIVED VALUE, AND LOYALTY PROGRAM ON CUSTOMER LOYALTY AT GARUDA INDONESIA

Airlines business is a competitive industry, which pushes the airline company to make changes in its strategy to retain current customers or to get more customers. Garuda Indonesia as the flag carrier is also a Full-Service Carrier that operates among other Low-Cost Carrier in Indonesia. To win the competition with these Low-Cost Carriers, Garuda Indonesia has to make strategies in Digital Innovation, Perceived Value, and Loyalty Program. This study aims to analyze the effect of Digital Innovation, Perceived Value, and Loyalty Programs on customer satisfaction and trust that will impact on customer loyalty at PT Garuda Indonesia. Data is taken from the questionnaire answers of the respondents. The respondents are Garuda Indonesia passengers who fly international and domestic route and also a member of GarudaMiles (Loyalty Program of Garuda Indonesia). The results show Digital Innovation and Perceived Value have a significant impact on customer satisfaction and trust. While Loyalty Program has no significant impact on customer satisfaction and trust. The results of the study also show that customer satisfaction and trust had a significant impact on customer loyalty.

IS LOYALTY PROGRAM AS A MARKETING TOOL EFFECTIVE?

Loyalty programs are an ubiquitous instrument of customer relationship management. 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 loyalty programmes to retain & reward existing customers and maintain relationships. One of the best ways to keep customers coming back for more is by establishing an effective loyalty or rewards program. Loyal customers, it is said, are worth striving for. They spread positive word-of mouth, reduce defection rates, and amplify the purchase frequency, to name just a few examples. But what can be done to induce that loyalty? Can loyalty schemes help us to do so? In this paper, we try to determine whether loyalty cards issued by stores have an impact on customer loyalty. The aim of this research is to enhance our understanding of loyalty program effectiveness.

An emerging theory of loyalty program dynamics

As exemplary instruments of relationship marketing, loyalty programs are being implemented and studied at an unprecedented rate. Yet real-world efforts often fail—or at least do not live up to expectations—and despite the growing richness of loyalty program literature, the field remains fragmented. Thus, a comprehensive perspective is required. To guide further research and suggest ways that managers might improve loyalty program effectiveness, this article synthesizes insights on loyalty programs from empirical research and underlying psychological theories. The proposed conceptual model of loyalty program effectiveness consists of psychological, design, and operational elements; in turn, it suggests a set of 12 propositions that account for differential effects across customer acquisition, onboarding, expansion, and retention stages. With an evolving theory of loyalty programs across relationship dynamics, this propositional inventory parsimoniously delineates the trade-offs associated with relationship stage–based management of these programs. The proposed comprehensive foundation can guide loyalty program practice and research.