The impact loyalty program elements on customer retention for Malaysian retailers

Abstract

A loyalty program is a marketing strategy designed to encourage customers to continue shopping at the store or use the products. In the retailing industry, the loyalty program has been widely used as an approach to building closer customer relationships and eventually customer retention, particularly as the rivalry becomes more intense. Hence, this research aims to examine the impact of loyalty program elements on customer retention for Malaysian retailers. The research suggests a model of four loyalty program elements namely loyalty card, discount price, gift voucher, and special treatment in determining how a loyalty program can assist retailers in Malaysia retain their customers. Using the survey method, 201 data has been collected. The data has been analyzed using SPSS version 25. The findings show that discount price is the loyalty program element that increases customer retention the most, followed by special treatment and loyalty cards. However, the influence of the gift voucher element on customer retention is not significant. These findings provide insights to Malaysian retailers particularly on how to improve and allocate promotional resources more effectively if a loyalty program is being employed.