Sample Essay

The various strategies that are used by retail businesses to increase customer loyalty include rewards, CRM and feedback programs. “As a result of the increased competition between self-service chains, retail managers to an increasing degree try to strengthen store identity and customer loyalty.” (Bech-Larsen, &Esbjerg, 2006) One form of such programs is the loyalty card program. The concept of loyalty cards and the store debit/.credit cards is to increase the loyalty amongst the customers and to increase repeat purchase through the dissemination of benefits and rewards to the customers.

“Loyalty cards are commonplace in European retailing; few retailers, however, are leveraging customer information to become more customer-oriented.” (Ziliani & Bellini, 2004) The other strategy adopted by the retailers to increase customer loyalty is to establish CRM based operations. “CRM is regarded as the integration of relationship technology (i.e. data consolidating and data mining) with loyalty schemes” (Minami & Dawson, 2008). The CRM technology allows the retailers to gather historical data on the customers who frequent the retailer and perform data mining on the raw data to make customer profiles. Targeting the customers as per the customer profiles allows the retailers to come up with loyalty programs that are better suited for their target market.

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