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Estimation of Loyalty Programmes from Customers’ Point of View: Cases of Three Retail Store Chains

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Author(s): Liudmila Bagdonienė | Rasa Jakštaitė

Journal: Engineering Economics
ISSN 1392-2785

Volume: 5;
Start page: 51;
Date: 2007;
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Keywords: loyalty | loyalty programme | customer perceived value | retail store chains | estimation of loyalty programme form participants’ point of view

ABSTRACT
Long-term relationships between organization andcustomers and their loyalty become the most significantassumption of nowadays business success. To achievecustomer loyalty and enhance it loyalty programmes arecreated and implemented. It gains special importance inthose fields of activities where competition is strong andsupply is standard. But loyalty programme by itself doesnot guarantee success. Whether it reaches organization’saims first of all depends on the main thing if the programmeis beneficial to its participants. The article dealswith how loyalty programmes are estimated by Maxima,Iki and Norfos mažmena retail store chains’ customers.In the first part of the article concept of customerloyalty, essence of loyalty programme and how its valueis perceived by customer are analyzed in theoreticallevel; in the second part – results of Maxima, Iki andNorfos mažmena retail store chains’ loyalty programmecontent analysis and questionnaire investigation of customersare presented. Research shows that Maxima, Ikiand Norfos mažmena retail store chains’ loyalty programmesare closed; basis of reward (most often financial)is amount of points which depend on how muchmoney customers spend on buying goods. Similar formsof investigated retail store chains’ loyalty programmesdo not create special attractiveness which would stimulatecustomers to be loyal to certain retail store chain.Results of questionnaire investigation prove hypothesisthat through discounts investigated retail store chains’loyalty programmes more stimulate sales than enhanceloyalty. Most respondents point that participation in loyaltyprogrammes is beneficial financially but none ofthem mentioned getting emotional or social value. Itmeans that loyalty of programme participants is rational,so it can be not long-term. Almost one third of respondentsstates that declared benefit of loyalty programme isbigger than a real one. Possibility of retail store chains’loyalty programmes to grow loyal behaviour is doubtedbecause only half of respondents buy in the store in whichthey have loyalty card. Almost one third of respondentshas loyalty cards of two-three retail store chains; most ofthem do their shopping not far from their living/workplace or where goods are cheaper. Just a little bit morethan a third of Maxima LT and Iki retail store chains’loyalty programmes participants are satisfied by the servicesthey get but only half of them have intent to recommendthese programmes to people they know. Value ofloyalty programmes is doubtful even to the respondentswho do not participate in any investigated programmewhile investigation was in progress. Loyalty programmes orientated into sales stimulation and offered by retailstore chains lose their attractiveness in the eyes of a customer.It means that to attract independent customers andeven more important “to tie” them, retail store chainsneed a lot of organizational efforts and financial resources.All of that will increase costs of creating andimplementing loyalty programmes, that is why retail storechains should choose another type of loyalty programmeor look for new instruments to enhance loyalty.
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