Are Loyalty Programmes Really Worth in the Mobile Phones Services Industry?

Abstract

The marketers face a huge challenge on how to retain their existing customers due to entrance of new competitors both from local and international arena. To retain customers, their needs, and wants should be successfully satisfied since highly satisfied customer stays loyal longer. In this context, customer loyalty is recognized as a key factor to retain customers in long run. In recent years, many companies have introduced loyalty programmes with the goal of enhancing customer loyalty. Loyalty programmes aim to enhance customer purchasing, but it is particularly the company?s best customers that are most likely to subscribe as members. To take advantage of the loyalty program, a customer must become a member and must identify himself as such at every purchase occasion. A unique trait of a loyalty program is that customers decide explicitly whether to participate in the program. The mobile phone service industry plays as one of the major service industries with a higher growth rate in this decade. The mobile phone is a stronger tool today, which strengthens the relationships or social bonds among family members, friends, and other interesting parties. Mobile phone service providers have a challenge how to keep customers loyal in long run. They attempt to keep customers loyalty through implementing loyalty programmes since most of customers would prefer to contribute to loyalty programmes since they have opportunity to be rewarded for their patronage. Therefore, this tool has become more popular among marketers and use as an effective tool to enhance customer loyalty. This study was focused to identify the impact of loyalty programmes on customer loyalty implemented by Dialog and Mobitel for their prepaid packages. The survey method was used as the main research method. The convenience sampling was used for the study and the sample consisted of 200 respondents. The study was conducted at the end of 2010 in two major provinces such as Southern and Sabaragamuwa in Sri Lanka. The study attempted to identify the nature of loyalty programmes, conditions of participation, active contribution, and satisfaction level of prizes awarded. T- test was used to analyze the data and the study results show a significant difference in implementation of loyalty programmes of Mobitel and Dialog, while Mobitel prepaid customers have demonstrated higher level of contribution for loyalty programmes and exhibited higher level of loyalty.