How Do Customers Perceive Benefits of Loyalty Programs: The Case of Lithuanian Grocery Retailing

Abstract

Many retailers use loyalty programs to attract new customers and to retain existing ones. The program should be recognized as beneficial to customers in order to build customer loyalty. A critical key of a success of a loyalty program is whether a consumer can perceive and identify the benefits of membership and appreciate receiving rewards. If customers perceive little or no benefit from participating in a loyalty program, marketing investments might be inefficient or even become lost. Perceived benefits of loyalty programs have been analysed already for a couple decades, but there is a lack of research investigating how benefits of loyalty programs are perceived. Thus, the main aim of this research is to rank the benefits of loyalty programs in grocery retailing according to Lithuanian customers’ perceptions. Additionally, DIF analysis was done in order to see whether these perceptions vary depending on age, education level, gender and income. Results show that utilitarian benefits are the best perceived ones followed by the hedonic and the symbolic.

Keywords: perceived benefits, loyalty program, Rasch Measurement Theory, ranking, DIF analysis