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Loyalty Programs. Role, Structure and Potential Benefits

  • Alina Filip

    ()

    (Bucharest Academy of Economic Studies)

A loyalty program consists of an integrated system of marketing activities, aimed at increasing members’ loyalty by rewarding customers according to their purchasing frequency and amount spent. Loyalty schemes, customer clubs and sales promotion techniques are the most common relationship tools used in marketing practice. To join the program and receive a card, consumers must fill in a registration form, providing demographic, behavioural or even psychographic data. Loyalty schemes and customer clubs offer long lasting benefits to participants. Sales promotion techniques can be used both as tools to attract new customers, as well as instruments to stimulate repurchase behaviour. The potential of a loyalty scheme to achieve members depends mainly on rewards value, diversity and timing. Similar, the success of clubs depends on whether customers perceive enough relational benefits according to their personal interests. Although currently, loyalty programs have become very popular, programs effectiveness and implicitly the managerial decision to implement them are determined by different factors, including: homogeneity of supply and products purchase frequency, competition and consumer demand characteristics and the internal environment of the company.

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Article provided by Academy of Economic Studies - Bucharest, Romania in its journal International Journal of Economic Practices and Theories.

Volume (Year): 1 (2011)
Issue (Month): 2 (September)
Pages: 88-93

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Handle: RePEc:aes:ijeptp:v:1:y:2011:i:2:p:88-93
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  1. Z. John Zhang & Aradhna Krishna & Sanjay K. Dhar, 2000. "The Optimal Choice of Promotional Vehicles: Front-Loaded or Rear-Loaded Incentives?," Management Science, INFORMS, vol. 46(3), pages 348-362, March.
  2. Coviello, Nicole E. & Brodie, Roderick J. & Munro, Hugh J., 2000. "An investigation of marketing practice by firm size," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 523-545.
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