Impact of Online Food Aggregator (OFA) Loyalty Programs on Customer Loyalty: An Empirical Study

Purpose: This study aims to assess the impact of loyalty programs on customer loyalty towards competitive online food aggregators (OFA) operating in India. A literature review shows that the online food delivery market has experienced significant growth over the past decade and has contributed significantly to economic and social causes in society. Loyal consumers are the lifeline of the industry; hence, using Expectation Confirmation Theory, this study examines how OFA loyalty programs contribute to the perception of customer loyalty and its manifesting variables. Design/methodology/approach: A consumer survey of 100 respondents, conducted using convenience and judgmental sampling, was administered to existing OFA customers through a structured questionnaire. The data were analysed using multivariate and inferential statistical analyses in MS Excel and SPSS. Findings: The study showed that the free delivery loyalty program had the greatest impact on customer loyalty, followed by coupons and free dining. This study shows that loyalty level has a significant positive relationship with WOM, recommendations, and repurchases. Loyal customers repurchase from their most-used OFA and engage in WOM and make recommendations for the OFA. However, customers do not hesitate to switch to competitive OFAs for better extrinsic offers. Research limitations/implications: The study’s managerial implications are discussed. Managers can develop innovative marketing strategies by offering free delivery as the most important component of a loyalty program. Owing to the chosen research approach, the results may lack generalisability. This study can be enhanced by including more locations, additional sample respondents, and external factors that may also impact customer loyalty and brand switching, regardless of the OFA loyalty program.