Importance of Loyalty Card in the Establishment for a Company
Abstract
Customer loyalty card is vital for the establishment of a business. It enhances customer satisfaction therefore ensuring their loyalty. This study aims at determining the importance of offering customer loyalty cards to the clients to overcome stiff competition existing in the area. The data collection method is mainly through structured interview and administering of the questionnaires. To ensure repurchase in a particular company or shop, customer loyalty card should be provided to the clients to monitor how they purchase. The parameters tested include naming contest where the public is given the opportunity to select the favorite name. Another perimeter is a test test. This is where several selections of planned featured house drinks on the sidewalk of the future storefront in conjunction with loyalty card sign-up. The public will vote on their favorite drink and will have the opportunity to help pick what will become the house signature drink through the results of their votes.
Keywords: Loyalty card; Customer satisfaction; Customer loyalty
Executive Summary
Origami Coffee is an independently owned coffeehouse. The store will provide the customers with a variety of choices. Tea and coffee of all kinds will be sold here. The coffee flavor will range from regular to raspberry-mocha flavor and the choices will range from latte to espresso. All English flavored varieties will be available. The Origami coffee mission is to offer a comfortable and friendly environment where the client is given high quality services, entertainment, and food at a fair price.
The coffeehouse is situated in a place where there are other stores providing similar services. The competition in the are is very stiff. To overcome this stiff competition, the management Origami coffee decided to conduct a survey to determine the approach they van use to acquire customers. The approach they are researching about is provision of the customer loyalty card to clients. These are cards offered to the customers by the business to enhance their loyalty to the firm. The data collection method will be through structured interview where the respondents are randomly chosen then a standard set of questionnaires are administered.
Origami Coffee is a coffeehouse that is owned and operated by its customers. Customers will be able to select from a wide range of options at the store. All varieties of tea and coffee will be available for purchase here. Latte, espresso, and various other coffee beverages will be available in various flavors, ranging from ordinary to raspberry-mocha flavor. All of the English-flavor variations will be available on the day. The aim of Origami Coffee is to provide a comfortable and welcoming environment in which the client may receive high-quality services, entertainment, and cuisine at a reasonable price. The company’s vision is to be the best coffee shop in the world.
The cafe is located in a neighborhood where there are other businesses that provide comparable services to the coffeehouse. The level of competitiveness in the area is really high. In order to compete against such fierce competition, the management of Origami Coffee decided to conduct a survey in order to establish the approach they would take in order to win new clients. A possible approach that they are investigating is the distribution of a customer loyalty card to customers. These are cards that a business provides to its consumers in order to increase their loyalty to the organization. The data will be collected through a systematic interview process in which the respondents are selected at random and then presented a standard set of questionnaires.
Review of the Literature
Customers in the retail industry are accustomed to visiting a variety of stores. Consequently, the focus is on understanding why clients differ in the method they share their acquisition acquisitions through merchants and how sellers might acquire a greater number of consumer expenditures in the future. Numerous studies have been conducted in order to determine the significance of providing customers with loyalty cards. In accordance with Magi (2003), many grocery shoppers have a primary store where they make a significant portion of their purchases. Among customers, there is a wide variation in the frequency with which other grocery stores are visited and, as a result, the proportion of sales that is allocated to their main store. Increasing the proportion of original and loyal customers, it appears, should be the primary goal of all shops in this regard. As a result of this, customer satisfaction is established, resulting in the creation of loyal customers. As a result of delivering a fair bargain, an increase in the proportion of regular and loyal consumers will be observed, hence increasing their loyalty and satisfaction.
Furthermore, studies demonstrating the need of monitoring the consistency and discipline of customers have been carried out as part of this research. Coll (2016) asserts that customer surveillance to check their consistency in the purchase and discipline is extremely significant in assessing their satisfaction with the product. The company’s close monitoring of its customers is essential because it allows it to identify the frequent customers and offer them a fair deal in order to increase their satisfaction. Many businesses have been providing their customers with cards that contain personalized encoding information that is scanned when the customer makes an online purchase from the business for numerous years. The practice enables businesses to establish personalized consumption patterns and to provide special promotions.
Literature Review
In retailing business, customers naturally patronize several outlets. Therefore, the concern is on why the clients differ in the way they share their acquisition acquisitions through retailers and how the sellers can acquire a larger number of consumer expenditures. Many studies have been carried out to pinpoint the importance of offering loyalty cards to consumers. According to Magi (2003), many grocery consumers have their main store where they make a large purchase share. The degree to which other grocery shops are used on a repetitive basis, and therefore, the share is given to their main shop store differs among customers. Apparently, the essential objective for the retailers should be to raise the share of the original and loyal consumers. For so doing, customer satisfaction is established, therefore, creating loyal clients. An increase in the share of frequent and loyal customers as a sign of providing a fair deal will be experienced, thus, enhancing their loyalty and satisfaction.
Moreover, studies showing the importance of surveillance of the consistency and discipline of customers have also been conducted. Coll (2016), states that surveillance of the customers to monitor their consistency in the purchase and discipline is very important in determining their satisfaction. Close monitoring of the clients is essential as it helps the company determine the frequent customers to offer them a fair deal to enhance their satisfaction. For several years, companies have been giving their clients cards outfitted with personalized encoding information that is scanned when the client purchase from the company. The practice allows the firms to establish personalized consumption and to provide special offers.
Additionally, consumer behavior and loyalty card system are important factors in designing marketing plans. Moore and Sekhon (2005), illustrate that there is a weak correlation between consumer behavior and the coalition loyalty card system. They suggest that loyalty card structures have a minimal chance of affecting the action of the clients. The consumers are willing to make joint attempts to earn points. However, the coalition loyalty card plan has no significant effect on consumer behavior. The degree of purchasing a particular product may be increased, but the attitude towards the system portrays no proof that suggests that the coalition loyalty card system is the cause of this increase. Even though the coalition loyalty system does not consider the clients as they to their competitors, the system is still making some achievements. It is one of the unique systems in the market, and it remains in the consumers’ minds. There is also a possibility to conclude that the coalition loyalty card’s main aim is not to affect the customers’ behavior. Therefore, the purpose of the coalition loyalty card scheme is to entice consumers to purchase the products of the company through the provision of fair offers and incentives.
Besides, loyalty card rewards impact customer satisfaction. According to Demoulin & Zidda (2008), loyalty cards are the most operative when the customers understand and respect the benefits related to them. They researched the extent to which rewards of the loyalty cards impact the satisfaction of clients. They also investigated the degree to which satisfaction with rewards of the loyalty cards affects the effectiveness of the schemes of the loyalty card. The study then confirmed that the clients with possession of loyalty cards are more loyal to the business. When the possessors of the loyalty cards with the reward programs, they become less price-sensitive and more loyal than the clients that are unsatisfied with the rewards of the loyalty card.
Moreover, loyalty cards provides various benefits and risks. According to studies by Everett (2009), on businesses that provides loyalty cards, she concludes that cards have several risks and rare benefits, though many firms have invested in them. She further argues that individuals cannot trust commercial organizations that store their data can protect them. She claims that the data given to retail businesses are prone to losses. Similarly, the handbook for the entertainment, Media, and advertising market research outlines a variety of areas comprising internet properties, providers of mobile services, multichannel operators, advertisers, advertisement agencies, newspapers, film studios, social networks, magazines, and multichannel operators (Miller & Washington, 2019-2020). A guideline is a user-friendly tool that offers an explanation of the trends of the market and plans for demographics concentrated on the advertising.
Experimental Design
A survey will be conducted in the local area regarding the initiation of a loyalty card system. The survey will be carried out twice in an interval of two weeks. The respondents in the study will be selected randomly from the town where the coffeehouse will be situated. The area is dominated by three shops which always gets the highest customers. and the satisfaction with the already existing coffee shops. The question examining the feeling of the participants in case the loyalty card is provided to them must also be included in the questionnaire. Finally, the collected data will be analyzed through ANOVA and correlation analysis to determine if offering a loyalty card (virtual or punch) will help draw business to their establishment. The parameters tested will include test tests, where several selections of planned featured house drinks on the sidewalk of the future storefront in conjunction with loyalty card sign-up. Another perimeter will be naming test, where the public will vote on their favorite drink and will have the opportunity to help pick what will become the house signature drink through the results of their votes. the public can suggest names for the house special which will be posted on your website with the public having the opportunity to vote for their favorite name. The next perimeter is the is to test the feeling of the customer concerning the offers of the loyalty card. The offers will include providing free coffee and tea for loyal customers.
Conclusion
In a nutshell, customer loyalty cards are a fundamental approach used by firms to enhance customer satisfaction. It ensures the loyalty of the clients, therefore, enhancing repurchase. Several studies have been conducted to justify the importance of customer loyalty. Many of them believed that loyalty cards entice the clients to purchase repeatedly in the company. When the clients understand and respect the rewards linked in the customer loyalty card, they will keep buying in the same shop or company in order to earn the offer or deal. In this research, data will be collected mainly through structured interviews and questionnaires.
References
Coll, S. (2016). Discipline and Reward: The Surveillance of Consumers through Loyalty Cards. Geschichte Und Gesellschaft, 42(1), 113-143.
Demoulin, N. T., & Zidda, P. (2008). On the impact of loyalty cards on store loyalty: Does the customers’ satisfaction with the reward scheme matter? Journal of Retailing and Consumer Services, 15(5), 386-398.
Everett, C. (2009). Loyalty cards: The risks and rewards. Infosecurity, 6(5), 17-19.
Magi, A. W. (2003). Share of wallet in retailing: The effects of customer satisfaction, loyalty cards and shopper characteristics. Journal of Retailing, 79(2), 97-106.
Miller, R. K., & Washington, K. (2019-2020). Entertainment, Media & Advertising Market Research Handbook. RKMA Market Research Handbook Series, 16, 179-182.
Moore, G., & Sekhon, H. (2005). Multi-Brand Loyalty Cards: A Good Idea. Journal of Marketing Management, 21(5-6), 625-640.
