What is the main purpose of Loyality Programs?
A successful and competitive company can be prosperous and hold a high business impact in the market by keeping the customers loyalty intact (Rust, R. T. & Oliver, R. L. (2000). Many of the business companies present in the markets have started to mainly focus on the present customers and how to keep them permanently by using different types of customer loyalty programs and also making use of the fully developed loyalty stimulation tools that results in a strong and effective method to strengthen the relationship between the company and the customers, be able to identify the most popular and in demand sale product amongst the customers, know how to best evaluate or choose the best selling price and also increase the profits and sales of the company. Therefore the main problem of this journal is concerned with the need to generalize the customer’s loyalty programs, develop and control the scientific literature and also to analyze the two big retailing nets in Tesco and Lithuania. The common strategy used by the company is the customer relationship management that only concentrates on the creation of the long lasting and strong relations with the customers that is retained for a long period of time in the company. Hence the company uses the loyalty programs for making an effective method of developing these types of relations with the customers. Many studies have shown that the present customers are more divergent, intelligent and demanding in nature and this results in them having greater levels of expectations from the sellers as their wants are higher than their needs. Therefore the company keeps these expectations of the customers in mind and hence has started to create many different loyalty programs so as to attract and maintain their customers. Although these loyalty programs give a lot of advantages to the company still they face a lot difficulty in estimating whether these loyalty programs operate effectively and how much knowledge the company has about these loyalty programs and regarding their customers’ needs (Teng, L. & Laroche, M. (2006). Thus the loyalty programs are not the only tool to solve the business problems as they need to be properly prepared for the tasks. The company used many Research methods such as the systemic and comparable analysis of scientific literature and also the case analysis. Planning and implementation of loyalty program is also a tough process so it has to be organized, observed and evaluated thoroughly.
The main purpose of the loyalty programs is to frequently allow the customers to buy the products as they would know them well and this in turn would save a lot of time and energy of the company (Reichheld, F. (2001). There is a lot of difference between the loyal customer and the level of the inertia of the customer’s involvement. The researchers have presented many factors for controlling the company by developing the loyalty programs in terms of the identification of the threats and weaknesses deep analysis of the expectations of the customers and also the analysis of the loyalty programs at the beginning. This will further work successfully for controlling the activities of the company. But many other researchers stated that the purpose could be also categorized according to the stability of the customer’s relations. For instance they could expand the categories which offer different products from the suppliers and also by raising the levels of the purchases of the customers and their consumption of the products there could be an increase in the profit levels of the company.
The main hypothesis sates that in the stability purpose category they could help control and build the database of the customer usefully and also help in developing a closer and stronger connection between the customers and the products. But the purposes may keep changing even after the company has implemented these loyalty programs. And however the other additional programs are excluded in the formation of the loyalty programs but they tend to develop and control these programs. There are many types of loyalty programs that define the principles of the working of these programs such as the nearness, stimulation, association and discounts to constantly maintain the connections of the customers (Dovaliene, A. and R. Virvilaite (2008). There are many advantages of these loyalty programs such as the memberships of the company will be open to all types of the customers and every member gets the same discount although they may have few purchase records and they could feel comfortable because the companies do not use their personal information like their place of resident, names and the amount of purchases they have done (Berman, B. (2006). Hence sometimes these programs are not at all rewarding for the loyal behavior as it does not stimulate the process of repeat purchase. This repeat purchase happens only when the loyalty programs are implemented properly. Therefore the companies must aim at improving their relations with the customers and also try to do link everything to every customer. By satisfying the customers there can develop a long term relation and create real loyalty which further leads to the high profits of the company (Flyvbjerg, B (2006).
However many companies also develop specific databases and be very proficient in the gathering of the data so as to manage the communication with the customers. This data collected can be included in the databases and can also help in the development of new marketing strategies and services. The companies are also inclines to use this information about the customers and make the target of the groups (BagdonienÄ—, L et al (2007). Many used the method of case study to evaluate the loyalty programs. According to these there are many ways of doing the research that is related to the social sciences. Hence there are very limited amount of variables that have an in-depth and examination of the case study. They provide a systematic way of looking at events, collecting data, analyzing information, and reporting the results.
This study can be done of a single group that involves an in depth examination of an event as they provide a systematic way of perceiving these events, analyzing the information, reporting the result and also collecting the data. This may result in the better understanding of the event by the researcher and also look at the future in a more better and important way. Therefore the researchers often use this information technique to attain the best information about the customers and the case studies often reveal more information because they activate the basic workings of the situation that is studied.
It can be concluded that many customers have been requesting for better loyalty programs and also to give them a better choice and option. However the needs of the customers are satisfied but yet they do not remain loyal always to one particular company The theoretical backgrounds of the article and later case study is based on scientific discussions and researches, committed to loyalty programs. The loyalty of the customers is gathered in the particular field where the competition is very intensive and also the theoretical backgrounds of the case studies is based mainly on the scientific researches that are committed to the loyalty programs (Humby, C et al (2007). Many companies also develop specific data gatherings to manage the communication with the customers in relation to the programs. These loyalty programs have a big impact on the companies and are used for the marketing strategies but however there is still a shortage as the time required for the implementation of these programs are of a very short duration.
BagdonienÄ— L., &; JakštaitÄ— R. (2007). ‘Estimation of loyalty programmes from customers' point of view: cases of three retail store chains’, Inzinerine Ekonomika-Engineering Economics.
Berman, B. (2006). Developing an Effective Customer Loyalty Program, California Management Review.
Humby C., Hunt T. & Phillips T. (2007). “Scoring Points - How Tesco Continues to Win Customer Loyalty”, 2nd. ed., United Kingdom, Kogan
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