“Loyalty may have been created with the intention

“Loyalty
programs were the brain child of airlines”

Currently,
most of the industry has introduced different type of loyalty programs to their
target segments. This has happened according to the concept of “Given the
increasingly high cost of creating new customers, organizations have turned
their attention to ways of retaining the loyalty of current customers”
(Brassington & Pettitt, 2006)

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The
market environment of the every industry has been more turbulent and dynamic.
Numerous organizations are competing in the same target segments. In this kind
of environment condition, it is very imperative organization to retain their
existing customers. To do that in different manner most of the organization has
adopted to loyalty programs.

Basically,
loyalty programs are a marketing strategy based on offering an incentive with
the aim of securing customer loyalty to a retailer. Achieving rewards is
related with purchasing frequency, so these types of programs are also called
frequent purchase programs (Shoemaker and Lewis, 1999)

In
present day business, loyalty programs are adopted by almost every business.
Especially the retailers (groceries, fashion chains, food chains, electronic
appliances, etc.) are now introducing rewarding programs based on repeat
purchase.

In Sri Lanka Dialog has its Star
Points, Arpico has its
own Privilege Card, Keells Super has had its own Nexus card, Cargills introduced their own

Loyalty
card in the latter 90s which is nowhere to be seen for the last 10 years, and No-Limit too has introduced their
loyalty program which goes by the name Arapima.
Aitken Spence Hotels have had
their own loyalty program. Even the small and medium grocery stores in small
localities are now offering this kind of loyalty schemes.

This
situation may have been created with the intention of differentiating from the
competitors and focusing on customer retention, where the effectiveness of
these programs is really matter to the businesses.

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