Awareness, perceptions and effects of customer loyalty programmes within the retail sector of the Durban Metropolitan area

Abstract

A loyal customer can mean a consistent source of revenue to organizations. Organizations have shifted their emphasis of finding customers to one of keeping customers. One of the relationship-marketing tools employed to harness customer loyalty is the customer loyalty programme. Loyalty programmes are an established feature of the retail landscape in mature, developed markets. The South African market has recently seen the implementation of such programmes.

There is considerable debate as to the effectiveness of loyalty programmes in achieving customer loyalty. Research conducted in mature markets has revealed mixed results. The South African market has been shaped by the recent economic, political and social changes, and is unique in its make-up. The value and effect of loyalty programmes still have to be explored within this market.

The study aimed at exploring the awareness, perceptions and effects of customer loyalty programmes within the retail industry of the Durban Metropolitan area. Focus groups were conducted from which a questionnaire was formulated. The questionnaire was then distributed to 115 consumers with the Durban Metropolitan area.

The study revealed that the respondents within the sample had an accurate understanding of the purpose of a customer loyalty programme. A slightly higher proportion of respondents belonged to one or more customer loyalty programmes. It was revealed, however, that membership to customer loyalty programmes did not primarily influence purchasing behaviour. Consumers were influenced to join and use the customer loyalty programmes by the rewards and perks offered by the programme. Customers tended to favour programmes offering incentives perceived to be worthwhile and when the benefits of joining such a programme outweighed the cost. Regular customers are more loyalty programmes likely to join customer, thereby increasing the received benefits.