Loyalty marketing and loyalty cards: a study of the Italian market

Abstract

Purpose Loyalty programmes are an important tool with which retail companies manage relationships. While the last fifteen years have seen a broad dissemination of loyalty programs in new sectors and new countries, since the early 2000’s, both in the academic and managerial world, the power of loyalty programmes to stimulate retention and support loyalty, has been brought into question. The present contribution focuses on these elements, analysing data collected on a sample of loyalty cardholders. Design/methodology/approach – The article presents the results of an exploratory study focused on a sample of loyalty cardholders by means of telephone interviews. Findings – The empirical data demonstrates that loyalty is not created and supported by a loyalty programme and proves how weak and limited such programmes are, especially point collection programmes. Programme effectiveness can however be achieved if there is a continuous search for differentiation and through reduced loss (discounts) and extra gain (prizes) initiatives. Research limitations/implications – The analysis of what customers expect and how they behave towards programme innovations needs further empirical detail. For the future, qualitative research should be provided, as well as analyses of a higher number of socio-demographical variables and life-styles. Originality/value – The study provides empirical data on customer behaviour and opinion towards loyalty programmes. The present contribution focuses on these elements, analysing data collected on a sample of loyalty cardholders

The influence of perceived benefits on the satisfaction with the loyalty program

“…Card loyalty programs are the most frequently used loyalty strategy by the major retailers (Sharp & Sharp, 1997) leading to the same tendency in grocery retailing. Loyalty cards in grocery retailing are being widely investigated from different points of view (Cedrola & Memmo, 2010;Leenheer et al, 2007;Demoulin & Zidda, 2009;Meyer-Waarden & Benavent, 2008). Loyalty cards most often work accumulating points through purchases and recording them on a card, provide tangible rewards, such as discount on future purchases, gifts and intangible rewards referring to preferential treatment as rewards adapted to the needs of client, preferential access to products, special communication or newsletters (Garzia-Gomez et al, 2012).…”

“…The essential question, no matter loyalty program type or structure, is value proposition. Any loyalty program must have some value proposition (Liu, 2007;Jorgensen, 2010;Bolton et al, 2000), though it gets challenging to the companies to design loyalty programs and rewards which would help differentiate from competitors (Daryanto et al, 2010). If there isn't any value, customers will hardly join the loyalty program, the satisfaction of members of the loyalty program will be low, and the loyalty program will not give desired results.…”

Extending Loyalty Programs with BI Functionalities

“…Customer loyalty programs are essential for every selling or trading institution [6,10,14,22]. Collecting data about customers and their preferences enables the creation of tailored products and services.…”

“…Current research on customer loyalty focuses mainly on customer shopping behavior, behavioral change and manipulation, reward strategies, and the design of loyalty programs [8,10,19]. While the business impact of loyalty programs and data mining techniques in general are researched extensively [22,26], there has been little publications on real world case studies, combining such loyalty programs with additional Business Intelligence (BI) functionalities for cross industrial small brick-and-mortar shops.…”

Los programas de fidelización online: un estudio desde la perspectiva del engagement marketing y las comunidades de marca

“…Las recompensas tangibles se ofrecen en todos los programas de fidelización y se pueden presentar en forma de ahorro de dinero para futuras compras, descuentos en la compra de determinados productos o regalos completamente gratuitos. Todos ellos pueden hacer referencia a los productos/servicios ofrecidos por la marca que ha implantado el programa (por ejemplo, un supermercado puede otorgar un descuento por la compra de una determinada marca de detergentes a los poseedores de la tarjeta de fidelización) o no (por ejemplo, un supermercado puede ofrecer un descuento para hacerse socio de un determinado gimnasio) (Cedrola y Memmo, 2010). Este hecho hace que las recompensas tangibles a su vez se puedan clasificar en función de su vinculación con los productos/servicios ofrecidos por la marca en directas (Kivetz y Simonson, 2002;Leenheer y otros, 2002;Yi y Jeon, 2003) o eficientes (Kim y otros, 2001) y en indirectas o ineficientes si no lo están.…”