University essay from Blekinge Tekniska Högskola/Sektionen för management; Blekinge Tekniska Högskola/Sektionen för management


In the current competitive market environment, customer loyalty efforts is one of the most important factors for achieving strategic success, especially considering that increased loyalty and customer satisfaction can have a positive influence on long-term financial performance of business entities. Since research has shown that retaining current customers can be more profitable than trying to find new ones, developing loyalty plays an important part in any marketing strategy aiming to create competitive differentiation and thus gain a unique position. Customer rewards programs (CRPs) and particularly, club cards, are considered to be a leading relationship marketing method. Despite their wide proliferation, club cards have revealed positive outcomes for firms and distinctive advantages to customers. In recent times, significant research has been carried out on issues regarding customer loyalty; however, not much of it has focused on the club card phenomenon and its impact in terms of customer satisfaction, recommendation and purchase increases as contributions to company profitability. Since traditional loyalty programs focus mainly on short economic profits and relationships, the club card has emerged as the value/customer-oriented option that focuses on longterm relationships. Through vast data resources, club card programs allow the tracking of purchase habits/increase and offer special treatment to the best customers. This underscores the uniqueness of this specific loyalty program, which results in improved customer satisfaction and retention. In this study, an analysis of club cards as a popular form of CRP that seems to have a positive influence on customer satisfaction, recommendation and purchase increase has been undertaken. It employs quantitative research techniques and tests a relevant hypothesis through the use of surveys sent to 500 customers with focus on three successful club card loyalty programs: Air Miles, Tesco Lotus and H&M. Programs on three different continents, North America, Asia and Europe were chosen to explore the impact of club cards, to provide the analysis a degree of general world-wide relevance. The findings of this research show that club cards do have a particular positive influence on customer satisfaction, recommendation and purchase increase. They provide customers with a feeling of being special, enhance long-term relationships and encourage customers to recommend membership to others, thus influencing positively the long-term financial performance of a firm. The survey responses indicate that the club card is one of the most popular CRPs which encourages loyal customers to continue to patronize the company. However, there is a need for more research in this field, particularly in the area of comparison of club cards with other forms of CRPs. It is anticipated that the findings of this research effort will provide an impetus for further research within the scope of loyalty programs, marketing strategy, customer retention, and customer relationship management.

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