Perception of Loyalty Programmes and their Influence on Purchase Behaviour, Store Attractiveness and Loyalty

Abstract

The most important challenge faced by retailers in India and across the world is that of appropriate and actionable use of the customer database and successful implementation of the CRM programs to improve profitability and Loyalty programmes being one of the most important tools of customer relationship management are used by retailers to build strong relationships with customers that leads to long-run profitability. The ever increasing number of factors influencing customers’ shopping decisions, have made retailers look for every opportunity to creatively improve customer experience and boost customer loyalty. Large format, chain retail stores in India (also known as departmental stores) like Lifestyle, Pantaloons, Shoppers Stop and Westside who have implemented loyalty programmes as relationship management tools, have been considered for the this study. The purpose of this study is to understanding the perceptions of the ‘member’ customers of the respective stores’ loyalty programmes, towards the program benefits, influence of their perception on purchase behaviour, store attractiveness and loyalty. A non-probabilistic method of sampling was used for the purpose of data collection. Correlation was done to find the perception of Loyalty program benefits on Purchase behaviour, store attractiveness and Loyalty. Factor analysis and regression was carried out to find the influence of customer perception of loyalty program and its benefits towards purchase behaviour, store attractiveness and loyalty. The finding of the research will help retailers to understand their customers better and thus design more effective loyalty programmes in the coming years.
Keywords: Customer benefits, Customer satisfaction, Long-term relationship, Profitability.