How digitalization has affected the importance of customer loyalty and the nature of customer loyalty programs : Case Study: Developing Case Company X's customer loyalty program

Abstract

In recent years, digitalization has introduced significant changes and great challenges in the retail industry, making it one of the biggest game changers in the field of customer loyalty marketing. Therefore, the aim of this study was to investigate how digitalization has affected the importance of customer loyalty and the nature of customer loyalty programs in retail. The research focused on examining the effects of digitalization on customer expectations and what kinds of changes this phenomenon has introduced regarding the initial power setting between consumers and retailers. This was an organizational case study for Case Company X. The author of this research has worked for the case company and recognized major deficiencies and development possibilities regarding the company’s customer loyalty program. The purpose of this study was to offer justifiable suggestions regarding the development and improvement of Case Company X’s customer loyalty program. The research methods chosen for this research were case study and desk research. Traditional quantitative and qualitative research methods were excluded completely to protect the identity of the Case Company X. A thorough literature review was conducted by placing particular emphasis on the role of customer relationship management, customer experience, and customer satisfaction in building customer loyalty. Suggestions concerning the development of the customer loyalty program of Case Company X were provided through performing a SWOT analysis. Results showed that the importance of customer loyalty has increased due to the changed customer expectations resulting from digitalization. This research also suggested that Case Company X should expand its customer loyalty program online, develop a mobile application for the loyalty program, invest in better CRM systems and focus on delivering personalized experiences.