Understanding the factors influencing loyalty programs across different industries

Abstract

The first time a customer gets in contact with the loyalty program is when he buys the product. The program enhances the product experience and augments the loyalty of the customer towards the brand which in turn, increases the chances of him becoming an advocate. Then the second customer gets to know about the program through his friend. After becoming aware of the program, he compares with other program while taking into consideration the product experience itself. The basic premise here is that a loyalty program can only add to the experience if product in itself has a positive impact on the customers, and not otherwise. Of the recent times, organizations have put a lot of focus on loyalty programs, mostly focusing on the product they service. However, it has to be yet examined that whether a loyalty program can be designed agnostic of the product or the industry. Loyalty Programs serve a twofold purpose of increasing the wallet share of the customers as well as making them advocates to promote to other customers via positive word of mouth publicity.