Edith Cowan University Copyright Warning

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Pamela Stafford
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1 Edith Cowan University Copyright Warning You may print or download ONE copy of this document for the purpose of your own research or study. The University does not authorize you to copy, communicate or otherwise make available electronically to any other person any copyright material contained on this site. You are reminded of the following: Copyright owners are entitled to take legal action against persons who infringe their copyright. A reproduction of material that is protected by copyright may be a copyright infringement. A court may impose penalties and award damages in relation to offences and infringements relating to copyright material. Higher penalties may apply, and higher damages may be awarded, for offences and infringements involving the conversion of material into digital or electronic form.

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4 ABSTRACT A paradigm shift from mass marketing to the concentmted focus on one-to-one marketing has led to a barmge of tactical strategies to instilllong-tenn coosumer loyalty among organisations' most valued customers. At the forefront of these stmtegies are customer loyalty progmms. Since the inception of the first loyalty pm!,'111m, AAdvantage in 1981, the marketplace has seen a proliferation ofthese programs across a widening range of industries. Not surprisingly, this has led to significant interest in customer loyalty progmms among academics and practitioners. Despite the skepticism of academics relating to the effects of loyalty programs, many organisations have allocated a large amount of the or marketing budgets to developing, implementing and maintaining customer loyalty programs in the hope of genemting long-term loyalty in customers. To date, current evaluations of customer loyalty progmms have assessed the effects ofthese programs by focussing on behavioural measures (such as repeat purchases) and on economic outcomes (such as market share, penetration and share of wallet.) While these tmditional measures have contributed to the understanding of consumer loyalty and evaluations of a progmm's success, it has been recognised by researchers.hat the measures are inadequate to detennine and explain the loyalty-building attributes of loyalty progmms. Moreover, studies from the viewpoint of consumers remain lacking. In an attempt to bridge the gap, this qualitative study explores the attributes of customer loyalty programs that result in consumer loyalty to bmnds fium the perspective

,'111m, AAdvantage in 1981, the marketplace has seen a proliferation ofthese programs across a widening range of industries.

5 of the consumer. The fundamental significance of this study is the integration of the behavioural and the attitudinal theoretical approaches used to investigate these attributes. In addition to this integrative approach, the study incorporates theories from relationship marketing. The components of loyalty and attributes of loyalty programs that were investigated were drawn from an extensive review of the brand loyalty, relationship marketing and customer loyalty program literatures. These components and attributes were deemed to be the most significant in establishing long-term consumer loyalty. The data for this qualitative study were derived from twenty-four semi-structured focused interviews with consumers who qualified as members of customer loyalty programs. The tentative conclusions drawn from this research are that from consume(s points of view: (i) the act ofloyalty is exhibited by the continual repeat purchase of the same product from the same store, (ii) the key to a successful customer loyalty program is the implementation of a program that is flexible to its members, (iii) the key to a defensive orientated loyalty program is a good incentive structure and an effective communication program, and (iv) the development and sustenance of a relationship between a consumer and an organisation is vital to the brand loyalty process. The results of this exploratory study provide a deeper understanding of the customer loyalty program phenomenon and the identification of program attributes that result in long-term consumer loyalty from the perspective of consumers. This research highlights that further investigation is required into the loyalty-building attributes of customer loyalty programs, and this will be central to the development ofloyalty programs that satisfy consumers and effectively establish long-term loyalty to brands. II

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