Empirical Study Of The Effectiveness Of The Loyalty Program In Retailing

Along with the marketing from the traditional "product marketing" to "relationship marketing", the company pays more and more attention to take customers as the center of the marketing strategy. In this context, loyalty program as effective means of customer relationship marketing generates at the historic moment. However, Some scholars think that loyalty program is a waste of resource, almost no help to company profits improvement. In addition, some scholars believe that loyalty program can promote customers to buy, improve company efficiency and alleviate price competition. The study is carried out based on the extensive application of the loyalty programs and it seems not to give company to benefit from this contradiction.In this study, we use the transaction data of a large shopping mall in Beijing with 870 customers in 19 months. The 19 months purchase history will be divided into two periods. Through analysis of customer buying behavior on customer loyalty, we can validate the effectiveness of shopping mall loyalty program.Firstly, the contribution of this study is that we establish the research hypothesis and build the logistic regression model, then use the transaction data to analysis the purchase amount,purchase frequency and the product category on the customer loyalty. The results show that the customer in T0 period with bigger purchase amount and higher purchase frequency also maintain a high level of purchase behavior in T1 period.Secondly, the study introduction of reward threshold above the basic model.The regulatory role of the reward threshold confirmed the reward threshold set of differences in customer loyalty to different moderating role.The research findings show that customer buying behavior can have a positive impact on customer loyalty, and loyal customer buying behavior stability. Purchase a lower level of the customers the possibility to improve the level of its purchase in the future. In addition, the study demonstrated that reward threshold in the higher level are better able to encourage customers to improve their buying behavior.So enterprises should pay attention to the cultivation of their own loyal customers. Because of the buying behavior of loyal customers with a certain degree of stability, Enterprises should focus on customer retention to this type of customers, keep a higher loyalty with marketing tools. At the same time, enterprises should also focus on the excavation of purchase behavior potential to the lower level purchase behavior customers, and to promote their level of purchase in the future. In addition, enterprises should pay more attention to install the reward threshold, not too low or too high reward threshold.