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Posted: February 19th, 2022
Importance of Loyalty Card in the Establishment for a Company
Importance of Loyalty Card in the Establishment for a Company
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Abstract
A customer loyalty card is essential for the successful establishment of a company. It increases customer satisfaction, thereby increasing the likelihood of repeat business. The purpose of this study is to determine the importance of providing customers with customer loyalty cards in order to compete against stiff competition in the area. The majority of the data was gathered through structured interviews and the administration of questionnaires, among other methods. The enhancement of the customer loyalty card ensures that a customer will return to a particular company or shop. The purpose of this proposal is to determine whether implementing a customer loyalty card system will facilitate the attraction of more customers to a business. One of the parameters being tested is a naming contest in which the general public is invited to vote for their favorite name. Another perimeter will be a taste test, where customers will be able to sample various featured house drinks on the sidewalk outside the future storefront in conjunction with the signing up for a loyalty card. In addition to voting on their favorite drink, the public will have the opportunity to Help in the selection of what will become the house signature drink through their votes. These factors will be considered in conjunction with the possibility of implementing a customer loyalty program. The outcome of the study will determine whether or not the system can be implemented in coffee shops.
Customer satisfaction; customer loyalty; customer loyalty card are some of the terms used in this article.
Summary of the Report
The research is being carried out by Origami Coffee, which is a locally owned coffeehouse. Because there are several coffee shops in the area, Origami Coffee may face competition from these establishments. The strategy of Origami Coffee is to provide its customers with loyalty cards in order to attract them to the shop, thereby overcoming the stiff competition. When customers make purchases, a hole is punched in the customer loyalty work and the work is returned to the company. Certain discounts or offers are made available to customers who have certain holes punched in their loyalty cards. Clients are encouraged to return to the company several times in order to receive the offer as a result of this practice. The primary goal of this study is to determine whether providing customers with a loyalty card (punch or virtual) will Help them in attracting more business to their establishment in the future. Primary data will be collected through a structured interview and analyzed statistically in order to determine correlations between the variables under consideration.
Review of the Literature
A customer loyalty card is essential for the successful establishment of a company. It increases customer satisfaction, thereby increasing the likelihood of repeat business. Numerous studies have been conducted in order to determine the significance of providing customers with loyalty cards. According to Magi (2003), many grocery consumers have a primary store where they make the majority of their purchases. It indicates that customers have preferences based on their level of satisfaction. According to the findings of the study, implementing a customer loyalty card program in a new coffee shop would increase customer loyalty while also attracting more customers to the establishment. Customer loyalty and satisfaction can be increased by providing incentives for shopping, such as increasing customer shares or offering discounts.
Moreover, studies showing the importance of surveillance of customers’ consistency and discipline have also been conducted. Coll (2016) states that the customers’ management 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. As such, a loyalty card system would ensure customers return to the shop. Also, monitoring returning customers’ frequencies may provide their satisfaction levels with the coffee shop’s services. The benefits provided by the cards would increase the customer base.
Additionally, consumer behavior and loyalty card system are essential factors in designing marketing plans. Moore and Sekhon (2005) illustrate 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. As such, this study is essential to identify whether the introduction of a loyalty card program would affect customer behavior and contribute to increased sales and loyalty. The cards may entice and encourage customers to make a repurchase at the coffee shop.
Besides, loyalty card rewards impact customer satisfaction. According to Demoulin & Zidda (2008), loyalty cards are the most operative when the customers understand and respect their benefits. They researched the extent to which rewards of the loyalty cards impact the satisfaction of clients. The article states the importance of making known to the customers the rewards associated with the loyalty card. Based on this study, informing customers of the benefits attached to their card may increase their satisfaction levels, which is crucial in retaining customers. Thus, letting potential customers know the rewards associated with the loyalty card is postulated to attract them to the business.
Moreover, loyalty cards provide various benefits and risks. According to studies by Everett (2009) on businesses that offer loyalty cards, she argues that cards have several risks and rare benefits. Both the customers and business owners must understand the benefits and risks associated with loyalty cards. 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). However, although the cards satisfy all the non-repudiation, unforgeability, and double-spending requirements, the system does not fulfill the theft protection requirements (Cuennet, Pouly, & Radomirović, 2015). Thus, data collected from the loyalty card system would identify market trends and help design marketing strategies to attract more customers to the franchise.
Methodology
The study will be quantitative, which will use a survey to gather data for statistical analysis. The survey will be conducted in the local area regarding the initiation of a loyalty card system. The survey will be carried out twice in two weeks. The respondents in the study will be selected randomly from the town where the coffeehouse will be situated. As the business is located in an area dominated by three coffee shops, customer satisfaction with the existing coffee shops will be assessed. The question examining the participants’ feelings in case the loyalty card is provided 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.
Specific activities
The coffee shop will conduct specific activities to gather feedback from customers. It will conduct taste tests, where several selections of planned featured house drinks on the sidewalk of the future storefront in conjunction with loyalty card sign-up. Another activity will be the naming test, where the public will vote on their favorite drink and have the opportunity to help pick what will become the house signature drink based on their votes. The public can suggest names for the house special, which will be posted on the coffeehouse website, with the people having the opportunity to vote for their favorite title. Also, the coffee shop will request customers to join their mobile notification program, and they will receive text message notifications on each week’s specials to loyal customers.
Rationale
The study is carried out to determine how the purchase can be maximized in the newly opened coffeehouse. It determines the activities that the store owners should conduct to ensure customer satisfaction and loyalty. The approach under analysis provides loyalty cards to customers to assess whether they will result in increased customer loyalty.
Recommendations
The first recommendation is to provide proper and sufficient supervision and monitoring to customers possessing loyalty cards to ensure their accountability. Tracking of customer cards will prevent transferability of the card to other people. Moreover, it is vital to securely store customer’s information to prevent access by a third party (Cuennet, Pouly, & Radomirović, 2016). Protecting customer information prevents malicious people from using it for purposes other than the intended one.
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 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.
Cuennet L., Pouly M., Radomirović S. (2016) Guided Specification and Analysis of a Loyalty Card System. In: Mauw S., Kordy B., Jajodia S. (eds) Graphical Models for Security. GraMSec 2015. Lecture Notes in Computer Science, vol 9390. Springer, Cham. https://doi.org/10.1007/978-3-319-29968-6_5
Demoulin, N. T., & Zidda, P. (2008). On the impact of loyalty cards on store loyalty: Does customer 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.
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