Premium Essay

Customer Relationship Marketing

In: Business and Management

Submitted By haonhien91
Words 6969
Pages 28
|MRKT19049 |
|Assignment 1- Individual research report |

|

Executive Summary

This report explores the benefits of customer loyalty programs to both sellers and customers with a view to deciding whether such a program would be beneficial to the client, BGO – an online grocery retailer.

A review of the literature suggests that the benefits to sellers include higher customer retention rates, enhanced effectiveness of marketing initiatives, the development of affective commitment from customers, and improved measurement systems. All these factors contribute to higher profitability for the business. The literature suggests that the benefits to customers include both tangible, money-saving benefits and intangible social benefits, such as a sense of belonging. Flexibility is a highly important aspect of loyalty programs because it allows customers to choose their rewards and thereby increases the perceived value of benefits in the eyes of consumers. All scholars agree that the most important benefits of a loyalty program relate to money savings.

The results of the field research support most of the suggestions made in the literature. All the sellers interviewed in the survey agreed that loyalty programs were effective at retaining customers and improving business profitability. Customers highly valued the benefits they received, and especially flexibility in choosing from a variety of rewards. However, the notion that customers develop an affective commitment to the business, and highly value the social aspects of a loyalty program was not supported by the interviews. Instead, all customers emphasized the money...

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