Impact of The Loyalty Cards On the Business Operations - Essay Example

 Impact of The Loyalty Cards On the Business Operations Introduction Every company looks to get a good amount of sales and also good growth in business. They try and expand their business process to other parts of various countries in the global world exploring new business to get more number of customers and to generate high revenue. Companies can increase their revenue by knowing the customers in a better way and understanding their exact needs and demands. They need to look out for both customer retention and also customer acquisition. Retaining the customers does give a lot of benefit to the company in having a continuous amount of the sales from the existing customers. The loyalty programs the main part for the company’s customer engagement. The companies do the loyalty programs by launching loyalty cards or also collaborate with the credit or the debit cards of the customers of different banks. In this report the various aspects for the importance of loyalty cards in the business growth can be seen by a thorough research. Discussion Literature Review In 2009, Dréze and Nunes said that customers are been influenced by the perception they get because of the importance they obtain from the loyalty cards as a loyal customer and it also provides a lot of pleasure for the customers, thus providing benefit both for the company and also for the customers. This results in repeat purchase and also for retaining the customers for getting a continuous sale from them. Thus the company gets a huge competitive advantage. According to Bolton in 2000, the level of membership does impact in a huge way over the psychological behaviour of the consumer and it does impact on a huge way over the buying power of the customers as their spending power does increase by a good amount (Brassington and Pettitt, 2006, pp. 56-64). This is because of the facilities that the customers enjoy by being a loyal customer to a particular company. As per De wulf in 2001, the specific awards that are been given to the customers based on the amount of purchase done by them do create a lot of impact in the mind of the customers and influences them to shop more. The loyalty programs become successful only when they are able to connect properly with the lifestyle of the consumers. These programs become a successful strategy only when they are able to connect the business operations to the customers in a better way and also increase the sales volume by a considerable good percentage (Pride and Ferrell, 2011, pp. 34-39). Hymowitz in 2004 did say that the loyalty programs do help the companies in increasing the repeat purchase of the customers and also in retaining back the customers in huge numbers. As the rewards do increase with the amount of purchase s the customers are influenced t buy more so that they can get more rewards. This is basically being governed by the loyalty cards which have a magnetic strip behind it containing a unique identification number for each individual customer. This number is been synchronised with the customer relationship management system inbuilt in the business operation of the company which does helps to have a close look over the purchase of each individual customer based on which the demands and the requirements of the customers can be analysed very easily. As per Stone and Bearman in 2003, the loyalty cards are been issued by the company from their original locations which is been integrated with the CRM system of the company. The customers can use these cards in the stores to get some discount and also some benefit on the other hand the company gets complete information about the purchase being done by the individual customer (Janotta, 2013, pp. 45-49). Thus the company understands the purchase behaviour of the customer, the frequency at which the customers visit the store and also the amount spent by the customer over their each purchase. This concept has been even supported by Priebtasch and McFeeley in 2011, a per them the loyalty cards do provide the company with a huge amount of information like the demographic data, the response of the customers to a particular scheme and also the location of the customers. All these data does help the company in improving their productivity and also their efficiency. Research question Is having a Store loyalty card a good choice? Research method The method used in this case for conducting the particular research is by using the secondary data. Using the secondary data from the scholarly sources that are available in various books and journals regarding to the same topic will help in understanding the topic and also help in coming to a conclusion about the topic. The data gathered from the books and the articles are been based on the research that is been done over the same topic to see the importance of loyalty cards in business operations. Qualitative method is been used in this research to analyse the topic and to come to a conclusion. There are many advantages with the qualitative research method. This method helps in collecting the data easily and the amount of investment in this process is also very less. The authentication of the process being genuine is very high as the data and the information is been gathered from the already conducted research by the scholars for the same topic (Knapp, 2000, pp. 23-28). This method is very useful to understand and conduct the whole research in a quick time as the time consumed in collecting the data and also analysing the information been collected is very easy and also less time consuming. Potential issues Though there are many benefits to the secondary research and also for the qualitative method, there many issues and disadvantages too with this method. The method doesn’t provide exact data which can be quantitatively analysed to get a clear picture of the topic rather it just provides qualitative information. The amount of biasness in this section cannot be negotiated as the researcher who has already made the research could have been biased towards one direction. Thus the result obtained cannot be the exact one that is been expected and thus the authenticity is bee lost in this process. This method is also not that good as the information been gathered is only from a few scholarly sources but the huge amount of other sources and the rest of population is not been considered at all. It is been focused only on a single side but it cannot be diverted at all to look the other aspects as well. The factor of being genuine of the project without being authentic is a big doubt for this method as the researcher can manipulate the information as their preference. Benefit of findings Looking at this case and after analysing the information that is been gathered from various books it can be seen that the loyalty card does play a big role in attracting the customers and also in increasing the sales volume of the company. It helps in segmentation of the customers thus the demographic information about the customers can be understood based on which the lifestyle of each individual customer can be analysed. This will help the company to know the exact requirement of the customers. Based on which the stores can be realigned so as to increase the sales volume of the company. The staff members are also been trained based on the information about the customer to make them understand how to behave and influence the customer to buy a particular product. The loyalty cards helps to understand the purchase behaviour of the customers which helps to know the demand of the various products at various locations based on the needs and wants of the customers. The promotional offers been made by the company do attract a huge number of customers and the loyalty cards do help to know the benefit that the company is getting from the promotional offer. It helps in knowing which promotional offer is being successful to attract more customers and have influenced the customers to buy more and which offer has not been successful in the increasing the sales. The loyalty cards to help the company to retain the customers and to influence them to buy more and the customers are also been influenced as they get discounted price and also certain offers from the loyalty cards. IT also encourages the customers as they get a better treatment after being a loyal customer for a particular company. Conclusion Thus the loyalty cards do impact the business operations in a huge way; it does make the company to make certain special schemes to attract the customers. It helps in retaining the customers and not allowing them to shift to the competitors thus providing a huge competitive advantage to the company. This research using the scholarly sources gives a clear indication that every store must have loyalty cards for the customers to understand the exact needs and demands of the customers thus enabling the company to know their customers in a better way. This will help them to serve the customers in a very good manner encouraging the customers to have repetitive purchase from the stores. This loyalty card will influence the customer to buy more as a result increase the sales volume of the company and help them in generating more sales revenue and also high profit margin over the other competitors present in the same market. Contents Introduction 1 Discussion 1 Literature Review 1 Research question 3 Research method 3 Potential issues 4 Benefit of findings 4 Conclusion 5 Contents 7 References 8 References Brassington, F and Pettitt, S. 2006. Principles of Marketing. London: Prentice Hall. Pride, W. and Ferrell, O. 2011. Marketing. Stamford: Cengage Learning. Knapp, E. 2000. The Brand Mindset. New York: McGraw Hill. Janotta, S. 2013. Loyalty Cards in the Apparel Industry in Germany and Spain : Is the Implementation of a Global Marketing Approach Reasonable when Operating Both in a Southern and a Northern European Country?. 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