Factors Driving Customer
Date
2011-05-13
Authors
Mahomed, Imraan
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Abstract
The South African food retail sector is extremely competitive, where high
customer churn and pressures on margins are common and are often linked.
Structured marketing efforts such as a customer loyalty programme can play a
key role in increasing customer retention of profitable customers whilst
promoting profitable behaviour. Food retailers in South Africa are awakening to
the benefits of introducing such programmes, but it has still not widely been
adopted.
A questionnaire-based survey was conducted amongst customers of
Woolworths Food in Gauteng. Customers were asked various questions on
aspects of satisfaction, loyalty and the Woolworths Difference Card loyalty
programme.
The findings of this research indicate that within the food retail sector customer
satisfaction is a key driver and precursor to customer loyalty. In addition,
participation by customers in a customer loyalty programme further enhanced
customer loyalty. Customers consider five dimensions when joining a loyalty
programme. These dimensions are ‘Sense of Belonging’, ‘Rewards’, ‘Ease of
Use’, ‘Accessibility’ and ‘Preferred Benefits’. This research should be of value to
companies intending to launch or have existing customer loyalty programmes
who are debating the implementation, modification or discontinuation of their
loyalty programmes.
Description
MBA - WBS
Keywords
Loyalty programmes, Customer perceptions