Is a Reward Scheme Effective at Increasing Customer Retention - Dissertation Example

Design/methodology/approach. The study is quantitative research, which takes on a descriptive-correlational research design. Using a purposive sample of UK and HK patrons of Tesco and ParknShop, the research made use of a survey questionnaire to gather primary data and address the objectives of the study. The responses were encoded onto the Statistical Package for the Social Sciences (SPSS) version 17.0 for statistical analysis. Findings. The study found that satisfaction with the loyalty scheme is significantly correlated with the frequency of shopping at the retail entity for both UK and HK samples.

Moreover, satisfaction with the loyalty scheme is significantly correlated with the frequency of using the loyalty scheme card for both UK and HK samples. The Chi-square tests suggest that for UK and HK patrons, there is an apparent judgment on customer loyalty as contributed by loyalty schemes, and this is primarily positive. These suggest that both UK and HK customers have a relatively positive attitude towards the value and contribution of loyalty schemes in building customer loyalty. Loyalty schemes are significantly correlated with the frequency of recommending the loyalty scheme card to friends and family for both samples.

The outcomes indicate that there seems to be a relationship between beliefs and loyalty behaviors for UK and HK patrons.Such loyalty schemes should be further investigated in terms of their effectiveness in maximizing value for their patrons and profitability. Tesco and ParknShop should make a continual effort to instill stronger engagement from its clients to enhance their customer value proposition at the least possible expense. There are other relationships marketing programs that may serve a similar purpose such as discount coupons, personalized offers, credit cards for the retail institution, among others.

Keywords: Customer loyalty in retail, retail marketing, customer loyalty, Tesco, ParknShop.