Effectiveness Of Loyalty On Customer Retention - 884 Words

This figure explain about how prospect ladder up to become a partner of the company. It is company’s service quality, trust, commitment and communication that leads customers from prospects to partner. However, it is not really easy task for companies to achieve customer as partner. It needs extensive effort from brand to get it. Loyalty program In the initial part of study, it has elaborate meaning of loyalty. Now, this section has presented literature on effectiveness of loyalty on customer retention. Loyalty program often considered as value sharing or enhancement instrument. Sabol, 2002) addressed that value enhancement function is important because of ability to provide superior value to customer relationship and retention. Loyalty program provide value to consumer in two stages. (Bolton, 2000), has explained stages in brief that in the first stage program points are issued to customer and the second stage when customer redeemed those points. Though these points value don’t have any practical value unless customer redeemed them. However, according to the study by (Machanda, 2004) showed that it has important psychological meaning to customer. Points accumulation can gives customer feelings of benefits and these benefits are able to give customer positive value perception. It is because customer can redeemed those values later for rewards. At redemption stage, customer receives both economic and psychological value. Thus it enhances appreciation and recognition ofShow MoreRelatedFinal Consumer Behaviour944 Words   |  4 PagesConsumers as dollar bills! The more consumers they influence to buy their products the more market share (penetration) their brand will have, the more successful their company will be. Of course its not all that simple, acquiring and keeping new customers can be a daunting task without the right knowledge and tools. 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