Customer Perceptions of Loyalty Programs in an Emerging Market Context

Abstract

Difficult economic conditions place pressure on organisations to attract new customers and retain existing ones. One strategy employed to realise this goal is the use of loyalty programs. This paper sought to determine the drivers of customer participation and non-participation in loyalty programs and to determine customer perceptions of loyalty programs. Based on a sample of 181 respondents, the findings show that the main drivers of customer participation in loyalty programs include quality and price while the main reasons for non-participation include lack of offers of membership and the perception that the benefits of participation are not worth the effort. Customer perceptions of loyalty programs were found to be aligned with previous findings in the literature and focussed on rewarding frequent shoppers and ensuring repeat patronage. The study findings were mainly consistent with the literature.

DOI: 10.5901/mjss.2014.v5n23p278