Evaluating the Effectiveness of Loyalty Programs in the Retail Sector

Abstract

Developing customer loyalty is a significant goal of marketing, and loyalty programs are the means through which practitioners can reach it. Keeping loyal customers is a vital aspect for their success and keeping current customers is cheaper than attracting new ones. Today, loyalty programs are playing an increasingly significant role in organizations' relationships with their customer base across a variety of industries. Towards this direction, the aim of this study was to examine how Lebanese consumers view rewards from loyalty programs and to what extent this reward is meaningful for them. This study is based on a survey among 225 customers that own a loyalty card, of some major retail stores in Lebanon. Based on the findings, key relevant points were obtained and used for further development of loyalty programs, which can be adapted to the consumption behaviour of the Lebanese consumer. Finally, the outcome of this research will help marketers to plan efficiently their marketing plan based on customer's perception toward the reward therefore increasing profits in retail markets.