Levels of customer loyalty and perceptions of loyalty programme benefits : a South African retail example

Abstract

Organisations use loyalty programmes to stimulate customer loyalty, and consumers presumably join these programmes to obtain a number of benefits or rewards arising from their membership. While consumer loyalty and loyalty programmes have been popular research topics, research which investigates customers’ perceptions of loyalty programme benefits relative to their level of loyalty to the organisation have been largely neglected. To address this void, our research assessed the members’ loyalty to a South African grocery retailer, clustered them into four groups (true, spurious, latent and low loyalty) based on their level of loyalty and examined their perceptions of the benefits offered by the retailer’s loyalty programme. Four latent dimensions of perceived benefits (Convenience, Recognition, Entertainment, and Savings and exploration) resulted from the factor analysis. Significant differences were found to exist in the case of all these dimensions relative to the four loyalty levels.

Keywords

• benefits
• consumer loyalty
• grocery retailer
• loyalty rewards
• loyalty programme
• perceptions
• retailer
• store loyalty
• south africa