Alvaro, Fernel Jean May 10,2019

Pascua, Remy rose BSAC,1

Rato, Regine

Importance of Customer Loyalty Programs on the Customer Retention

This study aim to make us understand about the importance loyalty programs on the Customer retention.
Which this was applied on Jordanians customers. The study try to find out about the loyalty programs ,point
system, tier system reward charges of an upfront free for VIP benefits ,and non-monetary programs. The
researcher conducted a survey and collect some findings. There were 350 questionnaires that was given to
different customers in Jordanians. All the of the participant has a different perspective backgrounds. Which in
the data that collected it shows that the most effect of this was Tier System reward next was the charge Up-
front free for VIP benefits and last was the point system, the Non- monetary program was the lowest effect.
The loyalty of one customer is important for a one business it is a very helpful to make that business to be
known. According to Roking 2005, having a loyalty program is a one effective idea in your business and to
make your customer be loyal in you. By doing this there some benefits to the both of you and your customers,
which your loyal customers can get some discount and for your company it can always gain an income from
them. In the statement of (Singh & Imran 2012) the rate of retailers lose was 25% of their customer every year
and gain profits by more than 25%. Making your customer always go back to your company is a good sign of
having a relationship between and your customer which also known as Relationship Marketing by this they
wouldn’t mind about the offers of other company. This is helpful also for those customer to reduce information
processing, and perceived risk associated with future decisions. To achieve doing loyal programs you must
apply some several types of loyalty program like giving some discounts through airline companies, and hotels
chain rewards consumers. Also by using some platinum, gold and silver tiers when they are purchasing. In the
US household has 21 loyalty program membership but fewer are active and the reason for this lack of reward
relevance, structures and poor quality customer service. For this we need to strengthen and improve loyalty
programs that would like by the customer something unique that they can’t resist, something that they really
want. We must know what do are customer basic wants and need to do that we need to do a customer profile
to know more about them (Raw Shaw, 2015).
Next going to the other side lets discuss about customer retention, customer loyalty and loyalty programs. So
Customer Retention which means company keeps its customer by providing great customer service. This was
a crucial component of customer relationship it aims to evoked emotions by their experience combining with
their organization strong reputation. If there were no emotional bond through you and your customer then it
would be impossible for that customer to be loyal. Retention program aim to turn the occasional customer into
frequent customer which they will be recommended the business to their relatives and friends. To sum this up
Customer retention has the power to earns the business nice reputation and goodwill in a competitive market
also this is about the customers and their experiences. Which they focuses on repeat purchasing (Henning &
Klee, 1997) which they are becoming a loyal customer. Speaking of customer loyalty which is the willingness
of any customer to purchase company’s products and also services by (Singh and Khan 2012). Becoming loyal
customer is knowing that the company has a really good service that was based on their experiences and
because of this customer will go back again and again to buy in you companies products. It means that your
company satisfied what your customers needs and wants, but you won’t stop you need to improve your
products and services so that many customer will go back to your company and become a loyal customers.
Lastly loyalty programs this was the company made for their customer by having advanced access to new
products, special coupons or free merchandise. To connect all this three you need a loyalty program to gain
the trust of your customer which the customer retention and so that there would be customer loyalty.
There are types of loyalty programs which are Points system most commonly use for customer earn points by
discounts, gifts and special treatment can consider as short-term purchases, Second Tier system which offer
small rewards as a based offering the difference of this in point system is that customer extract short-term than
the long-term value like airlines, hospitality businesses or insurance company, Next was the charge an Upfront
Fee for VIP benefits most applicable to business that thrive on frequent or repeat purchase, While Non-
Monetary Programs around Your Customer's Values provide value to customers in other ways than discount
and dollars rewards. Depending on the customer’s, The Partner with another Company to Provide All-Inclusive
Offers by providing customers with valued services beyond what the company can offer will grow the
companies network to reach their partners’ and customer. Going to Loyalty card program is were customers
are offered product discounts, coupons, points toward merchandise or some other reward in exchange for their
voluntary participation in the program, Frequent Buyer Program retailers offer the low free service to the
customers, Gift Card or Certificates introduced gift vouchers with specific amount and validity of their company,
Return Policy for Loyal Customer offers the extended return policy to the Loyal Customers. This provides
confidence to the customers as return is always a major concern of many, Payback money to loyal customers,
Discount over time or volume of goods, Lastly Bundle goods sells various goods or services with the main item
at no extra cost. (Singh &Khan, 2012). The benefits of this is the cost of serving loyal customers are less and
loyal customers are low price sensitive.

The objectives of this study is know the relation of loyalty programs to customer retention, identifying the effect
of point system, tier system rewards, charging an upfront free VIP benefits, and non monetary on customer
retention. The importance of this is to make us understand the loyalty programs and customer retention. The
ages range from 20s to 60s were they engaged in one or more loyalty programs. Many type of business can be
seen anywhere, and there were they offer different types of loyalty programs to gain the loyalty of their
customers and to make their business known to different places. This purpose of this is to show how this
loyalty programs and the types of this would relate on customer retention. It seek to answer the questions that
if there is a relation about customer retention to the loyalty programs, point system, tier system reward, charge
an upfront fee for VIP benefits, and non-monetary programs. To able to answer this the researcher uses two
languages which is (English and Arabic). The questionnaire card that was given to the customer has a three
parts, the first part is about demographical factors, second is about type of loyalty and lastly about the attitude
of the participant about each statement regarding the different types of loyalty.

To conclude all this we can say that loyalty program is very important to the customer retention, because
without this you can’t get the trust of your customer and you can’t keep them to stay on your company. Making
this for a business is a very helpful one it could benefit you and also your customers, you can gain income they
can have some discounts it is just a fair play. Also the goodness of this is you can have many customer to buy
on your products, because of those loyal customer who recommend your business to their friends, family,
neighbor and relatives. In all the types of loyalty program that I mention the Tier system reward was the most
effective to use, as we can see many of us are interested in long terms like insurance company which has
many choices like life insurance and etc. , next here is the charge up-front fee for VIP benefits , following by
the point system and in the bottom was non-monetary programs based on the result. So marketers must know
how to innovate loyalty programs that would reflect the customers shopping attitudes and lifestyle in order to
keep your business strong and to have a long life time customer. Keep on improving your loyalty program on
your business so that your loyal customer won’t get bored in a same routine you also need to do some twist to
make it more exciting and to have more customers. Always remember that customer’s are always right.