Title: Loyalty card programs, customer relationship and information technology: an exploratory approach

Authors: Alan D. Smith, Jodi A. Potter

Addresses: Department of Management and Marketing, Robert Morris University, 600th Fifth Ave., Pittsburgh, PA 15219-3099, USA. ' Department of Management and Marketing, Robert Morris University, 600th Fifth Ave., Pittsburgh, PA 15219-3099, USA

Abstract: Loyalty card-based initiatives are structured programs utilised in supermarkets and retailers, industry wide, with the purpose of providing value-added benefits, namely: savings, rewards and perks, directly to the customer. Through both theoretical and empirical methods, a market survey of the effectiveness of loyalty card programs in the Pittsburgh, PA metropolitan area that focused on supermarket and retailer-based loyalty card programs, resulting in 200 completed questionnaires among web-enabled professionals. Statistical analyses via multiple linear regression and principal-components analysis, via factor analysis, revealed many layers of complexity, especially concerning the comparative success of loyalty card programs between supermarket and more durable goods-based retailers. The factor-based constructs are, in order of the greatest explained variance, technology sophistication, purchase amount, number of loyalty programs, maturity and financial means, purchase selection and store selection, resulting in significant combined variance of 68.921%. Although all constructs were positively associated with using loyalty cards during their purchases, not all were found statistically significant, suggesting that such extensive use of loyalty cards cuts across age, income, financial income levels, technological savvy, purchase amounts and type of purchases. Recommendations for customer relationship management are made concerning loyalty card programs and their overall improvement.

Keywords: customer behaviour; customer relationship management; CRM; loyalty cards; supermarkets; retailing; Pittsburgh; United States; USA; customer research; business innovation; information technology.

DOI: 10.1504/IJBIR.2010.029541

International Journal of Business Innovation and Research, 2010 Vol.4 No.1/2, pp.65 - 92

Published online: 30 Nov 2009 *

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