LOYALTY PROGRAMS IN RETAILING: IMPACT ON CREATING LONG TERM CUSTOMER RELATIONSHIPS IN INDIA

The retail industry in India has experienced a revolution in the last three decades. It has changed from a product oriented industry to market-oriented to provide service and experience to the customer, with a customer-centric focus. This has been an effect of the hyper competition in retail markets. Today all retailers are doing their best to exert maximum efforts to distract the customers from other retailers, which has resulted in increased customer focus on not only customer satisfaction but bringing in customer delight. In order to attract the existing customer for repeat purchase and to up-sell and cross-sell at a lower cost, customer relationship programs are used as a strategy as an existing satisfied customer can be retained at a lower cost than attracting new ones. Therefore companies have started paying attention to retaining the existing customers and making profits through them via loyalty programs. In this process through the customer care the company looks forward to create customers who are satisfied and loyal. Customer loyalty program is one of the most widely used ways of working with customer care. It is believed that loyal customers are profitable and these programs help the company in building a bond with the customers. The customers are offered various benefits like Gift cards, frequent purchase program, point program, rewards, offers, Schemes in the loyalty programs. In this study we plan to observe how the different companies use the loyalty programs in their business while focusing on long term relationship with the customers and improvement of sales. A customer survey has been conducted at Lifestyle, Pantaloons, shopper’s Stop and Westside to evaluate the customer loyalty programs.