Buy term paper: TESCO CLUB CARD: IDENTIFY RELATIONSHIP BETWEEN CUSTOMER LOYALTY AND CUSTOMER SATISFACTION

The core aspects of loyalty programs
Wansik, B .and Seed S. (2001) identify such important aspects of loyalty programs:
1. Identifying potential customers
The first of the problems faced by the company is identification of the client. We mean by the term “identification” recognition of the buyer (especially a permanent buyer) of goods or services of the company. To give him any benefit, the company must be sure that the person frequents the company – to say, every Saturday and on holidays. To develop a method of identification is not always easy: of course, individual has their own ID (for example passport number, or TIN). The company’s goal – to make a queuing system as an individual, as a small private shop. However, such a natural for a small shop with a narrow range of customers and a permanent staff of the way as personal recognition, it becomes unacceptable when you zoom in business.
An important step in developing strategies for customer loyalty is to develop a methodology for their identification. This is necessary to analyze many aspects of the business – starting with the specifics of a particular area of activity and ending with seating contact with the client and indicative of a portrait audience. Sometimes you can use personal customer cards, choose a product identifier (serial number) or an object the provision of services , or more complex techniques. (Wansik. & Seed, 2001)
2. To attract customer … forever
Wansik. & Seed (2001) tentatively divide the ways of encouraging customers to continue to cooperate with the supplier of products or services into two types – direct and indirect. Direct methods include those that encourage the buyer with the financial side. Among them is the provision of various discounts (discount system), bonuses for purchases or services provided (bonus system), “gifts” personal sales (temporary discounts on favorite variety), etc. If direct methods of stimulation are simply, than indirect methods must be thought out carefully. The client must come to company with pleasure and prefer to use exactly company’s services – the task is not easy, as company has to combine a pleasant personal service and knowledge of preferences of customers, together with unobtrusive service. On the one hand, knowing the customer, company can make a right offer on the product range, on the other – do not restrict it in the selection, but stimulating to try something new.
After “identification” of client’s loyalty, a company can use this information as follows:
1. Restore the information system the history of relations with the client: what he buys, what services orders, changes in the dynamics of the volume of goods sold and services rendered over the certain period of time.
2. Knowing the total amount (in monetary terms) of service provided to this customer and length of relationship, company can determine how important the client is and provide him with the appropriate discount or even provide additional services free of charge (to make a “gift”). (Duffy, 1998)buy term paper
If the identification is going through the discount card, this method seems quite natural, or will be unexpected and pleasant for the customer. In addition, knowing about “constant” client (eg, using receipts for services rendered), the company can give him a plastic card.
Duffy, ( 1998) in his article claims that with support information system solutions, the organization can enter the “bonus” system, to apportion the conventional bonuses for purchase, and subsequently provide the client a choice “prize” for the accumulated points, or certain goods and services.
3. Indirect Methods of promoting customer loyalty
Indirect methods for promoting customer loyalty should be designed and implemented more carefully and subtly, as they are increasingly using psychological techniques.
Recognition of the client, attentive staff enables the person to feel, to some extent, as a unique client: he is loved, appreciated and respected. It is important to sometimes offer the customer exactly the sort of coffee which he usually drinks, exactly a cake which he liked the last time . And then it is necessary to thank clients for the daily visits to the company and offer a small discount. (Duffy, 1998)
To create such pleasant moments (which, of course, affect the subsequent choice of the client) requires three important components:
– carefully designed strategy of motivation;
– information decision support system;
– staff, who can enjoy the facilities of the system.

The effectiveness of of loyalty programs
Such authors as Donio, J, Massari, P, and Passiante, G ( 2005), Dowling, G.R. and Uncles, M. (1997) , O’Malley L. (1998) and other speak about the effectiveness and results of loyalty programs for companies.
Here is the answer to the question on the impact of loyalty programs on customer loyalty: “Many companies do not try to make contact with customers, the level of spending which revealed strong changes: due to whether such changes in market conditions, economic decline, lack of your favorite products or services to the buyer, or other difficulties? Will the nature of competition in general, or a competitor offered a similar product for the best price? Was it a bad experience with a seller who can fix any action? The actions according to the results collected in the program data can directly lead to the whole company of economic benefits ” (Reicheld, 1996).
Usually it is very difficult to achieve success quickly, but it’s today’s reality that most companies with similar programs require a rapid return on investments.
Butscher ( 2002) covers the question of measuring the success of loyalty programs. He states that To make sure that loyalty program is working, the company must start checking the accordance of achieved results and goals. He points two main forms of measurement of the degree of success: that are customer’s behavior and attitudes of customers .
The first method is Measuring behaviour. The analysis of consumer behaviour can help to identify and predict the results of the program. Measurement of behaviour requires a comparison between program participants and a random control group of buyers who did not participate in program. But if the company can not organize a logical structure measurements, it is forced to conduct periodic surveys of participants in order to track down the changes in their behaviour because of the program.
Also Butscher (2002) points the key elements to monitor the behaviour change over short periods of time (these elements are compared between program participants and control group):
1. The average size of sales per participant. These data tell about many things, but there should be separated by the impact of loyalty programs on the target group, leading to an increase in the number of customers, and impact, aimed at retention. For example, if the average sale to the buyer in the program increased as compared with the control group, it could be because all the buyers spend more, and more buyers, finally, have spent their money.
2. Number of inactive customers. This is a possible indicator of losses. If the company can separate the statistics in this group on the statistics of active buyers, then company will be able to assess the contribution of the program to the achievement of key objectives: keeping customers and increasing the share of buyers.
In the long term, at the time of the program, the company should come up with some kind of cost model, which combines data, establishing the origin of consumer intentions to withdraw from the company.
Measuring the relationship. Relationships with the customer are as important as they contribute to the formation of consumer behaviour. For building the desired relationships, it is appropriate to create a list of questions for a buyer that would :
– make him want to buy again,
– to suppress the possible negative impulses associated with the purchase,
– and encourage him to draw another buyer.
Butscher ( 2002) recommends that such issues should be established, at least twice a year, and ideally they should be challenging for a random sample of customers – members of your program and control group. Made at this time, the result should be evaluated by measuring the degree to which your program changes the ratio of buyers to your brand.



Author: essay
Professional custom essay writers.

Leave a Reply