Loyalty/reward programmes : are they the most influential strategic solution for client retention?

Abstract

The biggest challenge facing organizations in service industry today is that of customer retention. Loyalty/reward programmes have been promoted as the ultimate strategic solution towards customer retention by some industry experts, while the others question its influential potential as a customer retention strategy. The primary purpose of this research was to establish whether loyalty/reward programmes, as one of the main contributing Customer Relationship Management (CRM) factors, are either simply a fad or actually a fab solution! Subsequently, the research focused on the evaluation of the three most noted and influential CRM components in current literature and concluded that service quality and customer contact rated higher than loyalty/reward programmes with what should be considered the ultimate critic, namely the customer, or rather 60 of them.