LOYALTY PROGRAMS

Loyalty Programs

Loyalty Programs

Introduction

Corporate world has become quite challenging to handle and manage since the competition is so tough in the market. Recession has made the customers make much thinking behind making decisions. In such circumstances the importance of customer loyalty becomes extremely imperative in order to maintain the business and its growth as well. Customer loyalty is an entire comprehensive concept that has become quite popular in the past few decades. More loyal the customers, greater are the chances of maintaining the business by not losing the existing customers. There are several ways in which businesses can develop and maintain loyalty of their customers. The role of customer relationship gets too involved than in the normal circumstances. According to Hennig-Thurau (2000, pp.3-30), the image of the brand becomes one of the elements of the concept hat drives towards to establishing the factor of loyalty among the customers. This paper aims to consider and elaborate the rational behind customer loyalty with respect to selected business. The selected company is a wholesale company that deals in business to customer (B2C) business. In order to understand the topic, the impact of customer loyalty has to be evaluated. The fair evaluation leads to not only identifying the missing features but also manages to suggest for further development

Types of Loyalty Programs

According to Jodl (2010, pp.20-53), loyalty programs have to be well-planned and prone to make adjustments at the time of need. Any such program should have three main elements that are; core, layered program and promotions. The core program tends to represent the prime impact to make visitor join your program. The main efforts will feature the motives to attract and retain the customer for the long run. The core provides the structural support to the programs. Layering in the programs tends to add strength to the overall loyalty programs. It addresses the extent of affinity that prevails in the program. Promotion alone is a wide concept that indicates to the ability of the company to connect and communicate the number of programs you have aligned.

Simple Points System

This is a very simple and most commonly used mode of expanding customers' loyalty. The customers make purchases which are translated in terms of point that are accumulated to gain the eligibility to certain reward. According to Kincaid (2003, pp.11-29), the reward can range from discounts, specially tailored treatment and similar rewards that add interest of the customers.

Tier System to Reward Beginners

Locating and placing the needed balance between achievable and desirable rewards appears to be challenging for many of the companies. To further encourage the efforts, tiered system has been introduced. Under this system only little portion of rewards is introduced to encourage customers repeat purchases. Through this mode, the value of the rewards is also enhanced. This makes the customers keep a track of their points to win rewards.

Inducting Upfront Fee

This program tends to break the barrier in between the customers' intention to make purchases and your ...