Loyalty ProgramIntroduction Loyalty programs have been used over a period of time by industries, companies and firms in all business sectors primarily to put up, enhance and sustain associations with their customers for the present and long-term future of the existence of these businesses. Loyalty programs can be termed as well put up marketing tactics that prize customers for the way that they frequently buy or seek services from the businesses. The reason that many of the businesses mention for utilising loyalty programs is that they are a means to make profit.
This is because they believe that if a customer is loyal and buys or seeks services from the business over a period of time, the customer shall use up more money for the goods or services while at the same time reducing the amount of money required to serve him or her. However, it has been studied and shown that customers who are loyal are not necessarily profitable just in the same way that not all customers who bring profit are loyal. Loyal customers, it is believed, have a greater probability to market the business on their own initiative than customers who are non-loyal hence this is a reason for firms to come up with loyalty programs.
In general, loyalty programs are used by marketing arms of firms to provide a means that builds a relationship between the firm and the customer hence markets the firm (Kumar 2008). AimsThe aim of this report is to give a detailed description on loyalty programs. The benefit of loyalty programs on the viewpoint of the customer and the business is looked at in this report in regard to the advantages and disadvantages.
The manner in which loyalty programs are managed is looked at in the report by comparing brick-and-mortar against online services in regard to their advantages and disadvantages. This report describes the perceptions that customers have on loyalty programs. Do they trust, value or adopt these loyalty programs? Trusting and valuing of the loyalty program is very important if the customer is going to adopt the practices that the loyalty program sets out. Without them, then the loyalty program cannot work or result in the desired outcomes.
It is the aim of this report to describe these virtues in regard to loyalty programs and point out their importance in the adoption of the loyalty programs. ScopeThe aims of this report cannot be attained without looking at the broader scope of loyalty programs. What are loyalty programs? What do they represent in business? How are they implemented? What effect do they have on the market share of a business? Do they help in improving the profits that a business gains or do they reduce these profits?
This requires that loyalty programs as a topic be evaluated based on the available literature that touches on them. The way in which businesses manage and organize these loyalty programs will be assessed in this report looking at how the customers view the programs, their attitude and their reaction towards loyalty programs. The ways in which the business and the customers benefit from loyalty programs together with the efforts that the businesses put up to sustain the programs is an aspect that is looked at by this report.
To identify the results of loyalty programs, the report includes a survey done on people that helps to understand customer perceptions on loyalty programs.