Impact of Reward Programs on Enhancing Customer Loyalty in Grocery Stores and Super Stores

Customer Loyalty Program

In today's highly competitive marketing climate, the only way to ensure revenue is to retain customers; move purchasers to customers, and enhance the customer satisfaction index for all clients. Customer loyalty and customer satisfaction are not synonymous, however, and they have differing meanings to different types of customers. Usually, customer satisfaction is a quantitative measurement of client attitudes about products, services, branding, or delivery. Customer loyalty is both the behavior of the customer (repeat clients) or a strong and robust attitude about the brand or service that makes shopping habitual. It is this loyalty of behavior that has a direct correlation to sales and market share since, depending on product or service, the amount a quality of competition varies significantly (Hallowell, 1996). Research also shows us that the place to enhance these issues is that the retail point of purchase; this is the place in which all the elements of the product or service come together and provide the greatest memory and impression of the company. In addition, POP expenditures are of increased significance to contemporary marketers: 1) they are more effective than advertising and promotion expenditures because there is a captive audience; 2) a decline of in-store sales support focuses the customer onto POP, and 3) there is an upsurge in impulse buying (Quelch and Cannon-Bonventre, 1983).

Most marketing research suggests that if a client is satisfied, they will stay with the organization until there is a better alternative. Despite their satisfaction, however, they typically do not feel an emotional tie to a brand -- instead, they shop for convenience. Loyal customers are quite different; they will remain with the product or service as long as possible because the feel a bond between themselves and the organization. They feel quite attached to the organization because they believe they are consistently receiving superior value and service (Increasing Customer Loyalty, 2011).

Value is also a key dimension for customer service to reach a desired goal. Satisfaction captures the results to a particular service. Value gives the organization a direction to turn, customer satisfaction the report card, and customer loyalty is the graduation diploma. Therefore, firm-customers may have value hierarchies before the purchase of service, whereas satisfaction offers a historical perspective. Furthermore, customer value is generic, while satisfaction judgments are specific to a particular service (Gitomer, 1998).

In addition, clients are now part of a universe that is so competitive with like-products and services that often something quite small will change their view of satisfaction. Negative words should be completely omitted -- say, "I will see what I can do for you," not, "I can't," This lends to a CES (Customer Effort Score) as a new way to predict and explain how to get more clients. Loyalty eroding issues are vast, though, and can ruin even the heartiest of programs. These include: 1) re-explaining an issue; 2) not finding answers or being able to interact on the web -- being forced to call a phone number; 3) not being able to solve service issues easily or being transferred or retransferred (Dixon, Freman and Toman in Increasing Customer Loyalty, p.12).