Digital Loyalty Programs: Do They Create Loyalty?

Laura Beyer Skrydstrup

Student thesis: Master thesis

Abstract

With digital loyalty programs trending in Denmark and a lack of existing literature focusing on this subject a need for research in the field was identified. Through a customer focus, it was analyzed how digital loyalty programs affect the loyalty for Danish women toward companies and which strategic challenges companies face when launching digital loyalty programs. In order to conduct a thorough analysis, the research focused on how the digital loyalty programs created value for the customers, how the communication from the companies on different media channels affected the customers’ attitudes and lastly how the effects of the loyalty programs were reflected in the companies’ brand equity. Data was collected by using in depth interviews with customers from different age groups, which were determined by their media use. Firstly, the findings showed that digital loyalty programs can create company loyalty and affect the customers’ buying behavior if used correctly to match the customers’ needs and wants. Important elements of the loyalty programs included user friendliness and relevance, which both affected the use of the programs. Furthermore, the likelihood of obtaining rewards, the relevance of the rewards, the reward options and the monetary value of rewards and the overview and option of getting feedback on their membership affected the value of the loyalty programs, which was found to be practical and emotional value. Secondly, personal communication had a great impact on the customers’ attitudes toward the companies and the perceived relevance and perceived originality affected the users’ engagement in the communication on the different media channels. Thirdly, brand resonance was found when the customers were satisfied with the loyalty programs, felt the communication was personalized and perceived the loyalty program as relevant and meeting their needs. Thus, it was suggested that companies should consider how the digital loyalty programs meet the needs of the customers, and how to improve the relevance and user friendliness of the programs. Furthermore, personalized communication is very important as it is shown to impact, how attached the users felt to the company and thereby how loyal they were and to which degree brand resonance was present.

EducationsMSc in Business Administration and Organizational Communication, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2017
Number of pages157