Impact of customer retain and engagement factors of loyalty card program on customer satisfaction in supermarket industry

ABSTRACT The super market industry in Sri Lanka is highly competitive and a drastic improvement has been observed in the last decade as consumers lifestyle is changing with greater degree of influence by Western lifestyles. Due to heavy completion in the super market industry, super markets are pushed into a situation to focus more towards customer acquisition and retaining programs in order to increase their market share. However, leading super market chains suggest that despite acquisition programs making impact, customers who have been already acquired by the organizations are switching to competitors. Hence, in order to obtain competitive advantage over competitors, super market chains ought to focus towards executing effective customer retaining program like loyalty program that would have a positive impact on the business performance of the organization. However presently, super market chains have implemented loyalty programs that don’t yield expected benefits due to drawbacks in the loyalty programs which prevent customers from participating to the loyalty programs due to customer dissatisfaction on loyalty program. The research is essentially aimed at identifying factors that have impact on customer satisfaction on customer loyalty program to participate in super market industry. Anticipated Benefits, Privacy concerns, Variety seeking, Customer involvement and commitment are four key factors identified through literature survey that have impact on customer participation to loyalty program. The results of the study discuss the impact of customer retain and engagement factors of loyalty card program on customer satisfaction and the significant impact of those factors on the customer satisfaction. Keywords: Anticipated Benefits, Commitment, Customer Involvement, Privacy concerns, Variety seeking