The Relationship between Loyalty Program, Customer Satisfaction and Customer Loyalty in Retail Industry: A Case Study

Most businesses such as retail business implemented loyalty program to increase their customer's satisfaction and deter their customer from defecting to their competitors. However, the success of this program is not substantiated. The problem appears that supermarket chain loyalty programs are not successfully creating loyalty. All suffer from being too much alike and most loyalty programs feature membership card in the markets. These loyalty mechanisms are not creating ultimate loyalty to one supermarket because customers belong to more than one supermarket loyalty program in order to get special price and promotions. Thus, this study is intended to investigate the relationships among loyalty program, customer satisfaction and customer loyalty in retail industry. The findings indicate that there are positive and significant relationships among loyalty program, customer satisfaction and customer loyalty. The findings confirm that Shopping Partners’ Program, Gift Redemptions, Insurance Coverage, and Special Price significantly influence customer satisfaction and Shopping Partners’ Program, Member's Day, Rebate Gift Voucher and Special Price significantly influence customer loyalty. However, Rebate Gift Vouchers, Member's Day and Magazine does not significantly influence customer's satisfaction and Gift Redemption, Insurance Coverage, and Magazine does not significantly influence customer loyalty. The implications of the findings are discussed.