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Essay / Improving the effectiveness and differentiation of loyalty programs
IntroductionTheoretical, managerial and empirical knowledge is studied in order to improve the effectiveness and differentiation of loyalty programs. Understand how economic, hedonic, relational, practical and informational rewards increase or decrease customers' perceived program benefits with loyalty based on an individual purchase reference. Through loyalty programs, members can enjoy monetary and non-monetary rewards. This research aims to study the influence of consumer action towards loyalty programs. How rewards can affect perceived benefits and then loyalty. This research studies two different sectors: the grocery and perfume sectors. These sectors are varied in terms of product involvement, while for grocery retail hypermarkets, product involvement is low and product involvement is high for perfume chain. It’s about identifying the relationship between these two different spending areas. Methodology This research was studied across two sectors, including grocery retail hypermarkets and perfumery chain. To ensure that the scales are relevant to the specific contexts of the two loyalty programs, the authors used concept mapping and expert assessment. The research also applies qualitative study to obtain the data. The authors pre-test each scale with a random sample of loyalty program holders from grocery and perfume to test the research instruments. The five-point Likert scale is used and uses exploratory (EFA) and confirmatory factor analysis (CFA) with three scales to construct the measurement model. Several factors are used to determine purchasing orientation in grocery retailing: economical, brand/store loyal, hedonic, socio-relational, and...... middle of paper .... .. nistic rewards and social relationships are linked to PI and RCP, the relationship must develop a hedonistic feeling. Conclusion and Recommendation Each customer has different purchasing behaviors. The use of loyalty programs is sometimes not intrinsically stimulated by the same target. This can only encourage them to react to purchase the goods or services. The loyalty program influences customers in their choice, but the factors (economic, brand/store loyalty, hedonistic, socio-relational and apathetic) push them towards the services. They are also positively correlated with intrinsic motivation and have a positive long-term impression on purchasing behavior and loyalty. The findings have significant implications for loyalty program managers to promote diverse rewards, segment their customer portfolios, and differentiate through non-monetary and monetary benefits..