Question

a. Identify and briefly describe a loyalty program that you are either a member of and/or feel is a good customer (Business to Consumer) loyalty program. b. Identify and explain the learning theory which underpins this loyalty program. c. Suggest some additional initiatives that could be added or changed with this program to increase loyalty (note: identify if these would be aimed at achieving affective loyalty and/or behavioural loyalty).

Answer 1

(a) Loyalty programs are the initiatives or programs which are launched by the companies in order to make sure that the loyalty of the customers is gained for the product and more number of customers become a part of the business for long.

The loyalty programme I have been a part of was "Starbucks loyalty programme". This was initiated by Starbucks where the mobile application was launched and the customers if ordered from the application or paid using their application were rewarded certain points. These points in future can be redeemed and converted to buy a drink or any product.   

(b) The learning theory which underpins the above stated loyalty program is "Operant Conditioning" theory. This theory was given by BF Skinner and he mentioned in his theory that it is quite possible that the behaviour will be repeated by the employee if he is rewarded for the good he did, or for following the behaviour.

Similarly, it is quite possible here as well that the customers will repeat the behaviour of ordering & making payments from the application in future as well, if they are rewarded in the present for this behaviour. Here the rewards are the points they get with every transaction, which can be redeemed by the customers.

(c) Following additions can be made in this loyalty programme in order to increase the loyalty of the customers:

• The company can make sure to offer additional golden points to the customers who regularly use the application. The golden points can be given for free by the company. This will again help in changing the behaviour of the customers in favour of the company.
• Further carry forward of the reward points should also be added into the application, so that the customers can use the points for longer period of time and with ease. This will help the customers use the application for more time and with more points/ rewards in hand.