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Abstract
Loyalty programs are becoming one of the most influencing factors for the increase of company profit. A loyalty program is an integrated system of marketing actions that aims to make member customer more loyal. The goal of these programs is to enhance customer relationships by offering high value to profitable market segments. This enhanced relationship leads to increase of customers loyalty casing repeat purchase, more purchasing, convincing other potential customers to purchase through words of mouth, refraining existing customers from switching, causing the increase of sale and consequently causing to increase the total revenue and total profit. This is a review article based on the study of research papers.
Introduction
The phenomenon of customers loyalty among marketers, received a great deal of interest (Reddy et al 2011) even customer loyalty was in mind of most marketers during the 1980s and many companies spent millions on management programs of customer relationship for building customer loyalty (Pitta et al 2006). Loyalty has become important over the past few years, because of increased competition within respective industries. Companies infer "loyalty" for having a similar meaning and have developed strategic advertising and marketing efforts for creating a connection between the customers and company (Liang 2008). Commonly speaking, customer loyalty is the intention of customers to repurchase products and services, which is the goal of industry (Pi, & Huang 2011). Customer loyalty is one of the key factors of success of a company (Krumay & Brandtweiner 2010).
Gudonaviciene & Rutelione (2009) expressed with citations that loyalty programs are becoming most influencing factor for increasing profit of the company. As Marshall (2010) asserted that practice and theory of marketing has increasingly become customer centered and managers increasingly emphasize on long-term customers relationships because it is assumed that the length of tenure of a customer, is related to, long-run profitability and revenues of company. Firms adopt many tactics to gain loyalty of clients, and customers' loyalty program is one among them. Thompson (2007) emphasized the importance of having a loyalty program intended for raving and recommending about a company's product or service and keeping customers coming back.
Ivanauskiene & Auruskevicien (2009) with citations expressed that loyalty programs are tactical marketing approaches almost common in all business industries. Companies develop and...