Customer Loyalty Program: A Case Study
Background
In a service oriented industry like the telecommunication industry, loyalty is of the greatest importance. Several studies have been conducted on the correlation between increased levels of customer retention to increased revenue and profits. Various strategies and programs are implemented by service providers to ensure their customers stay loyal and to reduce the number of customers who switch their services to other service providers.
One of the many strategies adopted by telecommunication service providers to improve customer loyalty is to implement Customer Loyalty Programs (CLPs). Having a customer loyalty program does not automatically guarantee customer loyalty, but it does help an organization in getting close to its
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O’Brien and Jones (1995) suggested five elements of loyalty program that will increase the program value – redemption cash value (redemption should have monitory value to customers), aspirational value (rewards that motivate a customer to change his/her behavior), choices of redemption (the more choices customers have, the more attractive the program will be perceived), relevance (the prospect of getting rewards from the program) and convenience (ease of use). For this study, we will investigate the rewards and redemption schemes perceived values. TM Rewards members can accumulate points when they pay their bills on time. Members can use these points for bill rebates or redemption …show more content…
What is the relationship between positive or negative customer feedbacks and loyalty program perceived value?
2. What is the most important element in CLP?
3. Would CLPs able to retain its members even if the members are not satisfied with the service quality of the service provider?
Research questions will be asked to target respondents who are TM Rewards members either through online survey or direct email survey. The researcher will be working with TM Rewards program manager in selecting potential respondents from a pool of 1.5 million members. Respondents will be selected from various demographic profile and geographic location. In order to improve the survey response, the researcher has proposed to Telekom Malaysia that target respondents be offered bonus points as an incentive for completing the survey.
The findings of the research questions could be used to develop a proposition to improve TM Rewards customer loyalty program value perception.
Research Objectives
The research objectives of the study are:
1. To investigate customers perception of loyalty programs provided by telecommunication service
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