Factors Driving Customer

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.