Analyzing the impact of loyalty card programs on customer behavior: insights from the Albanian market

Background

In today’s competitive retail market, businesses face the ongoing challenge of attracting and retaining customers. Loyalty card programs have emerged as popular marketing tools that offer a range of benefits and rewards to participating customers. These programs are designed to foster customer loyalty, increase customer retention, and drive repeat purchases (Schuhmann and Kwortnik, 2019). The impact of loyalty card programs on customer behavior has been extensively studied across different markets, providing valuable insights for both practitioners and researchers (Smith and Johnson, 2019).

Research conducted by Smith and Johnson (2019) highlights the prevalence of loyalty card programs in the retail industry, with supermarkets and chain stores being prominent players in offering such programs. Smith and Johnson (2021) state that loyalty card program typically provide customers with a variety of benefits, including discounts, accumulating points, exclusive offers, personalized recommendations, and a faster checkout process. The underlying assumption is that by providing these incentives, businesses can enhance customer satisfaction and cultivate long-term loyalty.

Studies have shown that loyalty card programs can have a significant impact on customer behavior and satisfaction. For example, a study by Ping-Lung et al. (2017) found that customers who actively participated in a loyalty card program exhibited higher levels of satisfaction and loyalty compared to non-participants. Another study by Johnson et al. (2018) demonstrated that loyalty card benefits such as personalized recommendations and exclusive offers were positively associated with customer satisfaction and loyalty.

Moreover, loyalty card programs have been found to influence various aspects of customer behavior, including shopping frequency and spending patterns. In their research on the impact of loyalty card programs, Brown and Smith (2020) discovered that customers who were engaged in a loyalty program visited the store more frequently and spent more on their purchases compared to non-participants. This suggests that loyalty card programs can effectively encourage repeat purchases and increase customer engagement.

The effectiveness of loyalty card programs is further supported by a study conducted by Nguyen and Nguyen (2019), which revealed that customers who were satisfied with the benefits provided by loyalty cards demonstrated higher levels of loyalty and were more likely to recommend the store to others. This highlights the positive relationship between customer satisfaction with loyalty card programs and their likelihood to exhibit loyal behaviors and engage in positive word-of-mouth recommendations.

Furthermore, customization and personalization have been recognized as key factors in loyalty card program success. Research by Anderson et al. (2018) emphasized the importance of tailoring loyalty card benefits to meet customer preferences and needs. By customizing benefits such as discounts and rewards based on individual customer data and preferences, businesses can enhance customer satisfaction and loyalty.

Research objectives

The primary objective of this study is to analyze the impact of loyalty card programs on customer behavior in the Albanian market. The specific research objectives include:

Research questions

Based on the research objectives, the following research questions are formulated:

The concept of loyalty card programs

Loyalty card programs, also known as rewards programs or customer loyalty programs, are marketing initiatives designed to incentivize and reward customers for their repeat purchases and brand loyalty (Jones et al., 2017b). These programs typically involve the issuance of loyalty cards to customers, which they can present during their transactions to receive various benefits and rewards (Rundle-Thiele et al., 2020a). Loyalty card programs have gained significant popularity across industries, particularly in the retail sector, due to their potential to increase customer retention and drive repeat purchases (Sharp et al., 2017b). Research has shown that customers participating in loyalty card programs tend to have hedonic and utilitarian shopping goals, seeking both experiential and functional benefits from their interactions with the program (Jones et al., 2017b). Personalized benefits and tailored offers have been found to have a significant impact on customer satisfaction, enhancing the perceived value of the loyalty card program (Blazevic et al., 2016b; Panda and Swain, 2019). Overall, loyalty card programs serve as effective tools for businesses to cultivate customer loyalty, enhance customer satisfaction, and drive customer behavior in the retail industry (Kumar and Reinartz, 2016; Reinartz and Kumar, 2018).

Benefits and incentives of loyalty card programs

One of the primary reasons customers participate in loyalty card programs is to obtain the associated benefits and incentives (Kumar et al., 2016). Loyalty card programs offer a wide range of benefits, including discounts on purchases, accumulating points, exclusive offers and promotions, personalized recommendations and deals, and a faster checkout process (Evans et al., 2018a). These benefits serve as motivators for customers to engage with the program, increase their loyalty to the brand, and encourage repeat purchases (Jones et al., 2017a).

Discounts on purchases are one of the most common benefits offered by loyalty card programs (Palmatier et al., 2017). Customers perceive discounts as a tangible value and are more likely to make repeat purchases to take advantage of cost savings (Gensler et al., 2018a). Accumulating points is another popular benefit that allows customers to earn rewards based on their spending (Sharp et al., 2017b). Customers are motivated to accumulate points as they see it as a pathway to receiving valuable rewards or discounts in the future (Kumar et al., 2016).

Exclusive offers and promotions are tailored benefits provided exclusively to loyalty card holders (Evans et al., 2018b). These offers create a sense of exclusivity and make customers feel valued, enhancing their loyalty to the brand (Gentile et al., 2014). Personalized recommendations and deals leverage customer data to provide tailored offers based on individual preferences and shopping habits (Blazevic et al., 2016a). By personalizing the benefits, businesses can enhance customer satisfaction and strengthen the emotional connection between customers and the brand (Rundle-Thiele et al., 2020b).

A faster checkout process is another benefit offered by loyalty card programs, allowing customers to bypass long queues and enjoy a streamlined shopping experience (Palmatier et al., 2017). This convenience factor contributes to customer satisfaction and encourages repeat visits to the store (Jones et al., 2017a; Jones and Smith, 2021).

Impact on customer satisfaction

Several studies have examined the relationship between loyalty card programs and customer satisfaction. Customer satisfaction plays a crucial role in determining the success of loyalty card programs and their ability to foster customer loyalty (Evans et al., 2018b). When customers perceive the benefits of loyalty cards as valuable and satisfactory, they are more likely to be satisfied with their overall shopping experience and develop a positive attitude towards the brand (Gensler et al., 2018b).

Research conducted by Chen and Chang (2019b) demonstrated a positive relationship between customer satisfaction with loyalty card benefits and overall customer satisfaction. They found that customers who were satisfied with the benefits provided by loyalty cards had higher levels of overall satisfaction, leading to increased loyalty and positive word-of-mouth recommendations.

Moreover, studies have shown that personalized benefits and tailored offers have a significant impact on customer satisfaction (Blazevic et al., 2016a). By personalizing the rewards and recommendations based on customer preferences, businesses can enhance the perceived value of the loyalty card program and increase customer satisfaction levels.

Additionally, the study by Huang and Rust (2018) revealed that customers who perceive loyalty card benefits as highly relevant to their needs and preferences exhibit higher levels of satisfaction. This highlights the importance of aligning the loyalty card program with customer preferences to maximize satisfaction.

Furthermore, research conducted by Liao and Chen (2017) demonstrated that the quality of service provided alongside loyalty card benefits significantly influences customer satisfaction. When customers receive excellent service in addition to the rewards offered by the loyalty card program, their overall satisfaction levels are enhanced.

In summary, the existing literature highlights the positive relationship between loyalty card benefits, customer satisfaction, and overall customer loyalty. Tailoring the benefits to meet customer preferences, personalizing offers (Kotler and Armstrong, 2022), and delivering high-quality service are key factors in enhancing customer satisfaction with loyalty card programs (Blazevic et al., 2016b; Chen and Chang, 2019a; Evans et al., 2018a; Gensler et al., 2018b; Huang and Rust, 2018; Liao and Chen, 2017). These findings emphasize the importance of designing loyalty card programs that align with customer needs and preferences to maximize customer satisfaction and loyalty.

Gaps in the literature

While previous research has shed light on the impact of loyalty card programs on customer behavior, there are still several gaps in the existing literature. First, limited studies have examined the awareness levels of loyalty card programs among consumers, particularly in the Albanian market. Understanding the level of awareness is crucial for businesses to gauge the effectiveness of their loyalty card initiatives and identify potential areas for improvement.

Second, the relationship between loyalty card benefits and customer loyalty in the Albanian market remains understudied. It is important to explore how specific benefits, such as discounts on purchases, accumulating points, exclusive offers, personalized recommendations, and a faster checkout process, influence customer loyalty and shape their behavior in the context of Albanian supermarkets or chain stores.

Finally, there is a need to investigate how businesses can tailor loyalty card benefits to meet the needs and preferences of their customers in the Albanian market. Understanding the customization strategies that resonate with customers and enhance their satisfaction and loyalty can provide valuable insights for businesses seeking to optimize their loyalty card programs.

This literature review has provided a comprehensive overview of loyalty card programs and their impact on customer behavior in the retail industry. The review has highlighted the significance of loyalty card benefits in driving customer satisfaction and fostering customer loyalty. The gaps identified in the literature indicate the need for further research to explore the awareness levels, the relationship between benefits and loyalty, and the customization strategies in the Albanian market.

Ethical considerations

This study received Ethical approval (nr. 2503203) from the ethics council of the University Aleksander Moisiu and the ethical guidelines were followed throughout the research process. Informed consent was obtained by providing participants with a clear explanation of the study’s purpose, procedures and benefits, and their rights as participants. Participants are informed that their participation is voluntary and that they have the right to withdraw at any time without any negative consequences. They are also assured that their responses will be kept confidential, and that any identifying information will be anonymized or kept secure. In addition, participants received an email that clearly stated that by completing the survey, they were providing their informed consent to participate in the study.

Research design

The study employs a cross sectional research design where the data was collected only one time to investigate the effects of loyalty card programs on customer engagement, satisfaction, trust, and loyalty in the Albanian market. The research design involved the collection and analysis of survey data from a diverse sample of customers across different retail sectors in Albania.

Sampling

The target population for this study consisted of customers who have participated in loyalty card programs offered by supermarkets or chain stores in the Albanian market. The inclusion criteria for the target population in this study consisted of customers who were residents of Albania and regularly shopped in the Albanian market. On the other hand, the exclusion criteria encompassed customers who were not residents of Albania or did not engage in shopping activities within the Albanian market.

To select the participants, a convenience sampling method was used. Convenience sampling is a non-probability sampling technique where individuals who are easily accessible and available are included in the sample. In this case, participants were selected based on their convenience. The survey was distributed to the selected participants via email, using contact lists obtained from the participating supermarkets or chain stores. The email included a brief introduction to the study, its purpose, and a link to the online survey. Participants were encouraged to complete the survey at their convenience. The use of convenience sampling allowed for a practical and efficient way of collecting data from individuals who regularly shop in supermarkets or chain stores within the Albanian market.

To calculate the minimum sample size required for the study, a confidence interval with a margin of error of ±0.05 was considered (Ervin and Brunela, 2023). The population size (N) was 2,500,000 (that is the population of Albania). The standard deviation (σ) based on the proportion (p) was calculated using the formula: σ = √(p(1-p)). In this case, the value of p was determined as 0.975, which is equivalent to 1 - α/2, where α is the significance level (1-0.05 = 0.95). Substituting the value of p into the formula, the standard deviation was found to be 0.3.

Next, the Z-score corresponding to the desired confidence level was determined. The Z-score for a 95% confidence level is 1.96, which is approximately 2. However, in this case, Zp (Z-score for the upper tail of the distribution) was used instead of Zα/2 (Z-score for each tail of the distribution). The value of Zp was 2. Using the formula for calculating the required sample size, which is n = (Zp² * p(1-p)) /MOE², where MOE is the margin of error, the sample size was computed. Using the values, the initial sample size was calculated to be 173.8. Since sample sizes cannot be fractional, the value was rounded up to 174.

Considering that the population size is finite (N = 2,500,000), a finite population correction was applied. The formula for calculating the corrected sample size is n’ = (n * N) / (n + N - 1). Substituting the values, the corrected sample size was also determined to be 174. The number of filled surveys was 248, which is greater than the minimum required sample size of 174.

Data collection

Data for this study were collected through a structured questionnaire survey created by the authors (Brunela and Ervin, 2023). The questionnaire consisted of multiple-choice questions and Likert scale items designed to measure customer engagement, satisfaction, trust, loyalty, and perceptions of data privacy and security concerns associated with loyalty card programs. The data was collected for March to May 2023. The survey was distributed electronically via Google Forms through emails and social media in order to ensure efficient and timely data collection. To ensure that the participants met the inclusion criteria of being Albanian residents who actively shopped in the Albanian market, the survey was specifically targeted and distributed to individuals who met these requirements. When the survey was sent out, participants were explicitly asked to complete it only if they resided in Albania and regularly engaged in shopping activities within the Albanian market. Participants were provided with clear instructions and informed about the purpose and confidentiality of the study.

Data analysis

The collected data were analyzed using statistical software IBM SPSS Statistics 27 (RRID:SCR_002865). Descriptive statistics, including frequencies and percentages, were calculated to summarize the characteristics of the sample and the distribution of responses for each variable.

Furthermore, using the program IBM SPSS Statistics 27, inferential statistical tests were conducted to examine the relationships between loyalty card programs and customer behavior variables. Specifically, chi-square tests of independence were utilized to assess the associations between categorical variables. The significance level was set at α = 0.05, indicating that p-values less than 0.05 were considered statistically significant. These tests helped determine if there were any significant relationships or dependencies between the loyalty card programs and customer behavior variables in the Albanian market.

Awareness of loyalty card programs

The first research hypothesis aimed to investigate the level of awareness of loyalty card programs among consumers in the Albanian market. The hypothesis stated that the majority of respondents would be aware of loyalty card programs offered by supermarkets or chain stores.

To assess the awareness of loyalty card programs, a survey was conducted among a sample of 248 participants. Table 1 presents the distribution of responses regarding awareness of loyalty cards:

From Table 1, it can be observed that out of the 248 respondents, 168 individuals (67.74%) were aware of loyalty card programs, while 80 participants (32.26%) reported not being aware of such programs.

A chi-square test of independence was conducted to test the hypothesis. The observed frequencies for the two categories (“Yes” and “No”) were compared with the expected frequencies under the assumption of independence. The chi-square test statistic was calculated to be χ² = 0.00001248 with 1 degree of freedom. At a significance level of 0.05, the critical value is 3.841.

The findings indicate that a significant proportion of respondents (67.74%) in the Albanian market were aware of loyalty card programs offered by supermarkets or chain stores. This supports the hypothesis that the majority of individuals would be aware of such programs. The chi-square test results also confirm that the observed frequencies were not significantly different from the expected frequencies, suggesting that the awareness of loyalty card programs was not dependent on other factors measured in the survey.

Additionally, the awareness of loyalty card programs was analyzed further based on gender and age groups. Tables 2 and 3 present the awareness of loyalty cards by gender and age group for female and male participants, respectively:

Tables 2 and 3 provide a breakdown of the awareness of loyalty cards among female and male participants in different age groups. It can be observed that the awareness levels vary across age groups and gender.

Furthermore, the relationship between shopping frequency and awareness of loyalty cards was analyzed. Table 4 presents the distribution of shopping frequency by awareness of loyalty cards:

It can be observed that the majority of participants who shop daily and weekly are aware of loyalty cards, while a smaller proportion of those who shop monthly, occasionally, or rarely are aware of loyalty cards.

In summary, the analysis of awareness of loyalty card programs revealed that a significant proportion of respondents in the Albanian market were aware of such programs. The awareness levels varied across gender, age groups, and shopping frequency. These findings highlight the importance of understanding the awareness levels and preferences of consumers in designing and implementing effective loyalty card programs.

Likelihood to recommend

Hypothesis 2: Customers who are satisfied with the benefits provided by loyalty card programs are more likely to exhibit higher levels of loyalty to supermarkets or chain stores in the Albanian market.

Out of the 248 respondents, 201 provided valid responses regarding their likelihood to recommend. The Figure 1 shows the percentage of the responses.

Figure 1. Likelihood to recommend.

The majority of respondents expressed positive sentiments towards recommending a supermarket or chain store with a good loyalty card program. The most common response was “Likely,” with 117 participants indicating this likelihood. Additionally, 24 respondents expressed being “Very likely” to recommend. A smaller number of participants indicated lower levels of likelihood to recommend, with 11 respondents stating “Unlikely” and only 1 respondent indicating “Very unlikely.”

To test the hypothesis regarding the likelihood to recommend, a chi-square of independence was conducted. The analysis included different satisfaction levels (e.g., “Very satisfied,” “Satisfied,” “Neutral,” “Dissatisfied”) and customer loyalty. The results of the hypothesis testing provide insights into the relationship between loyalty card programs and the likelihood of recommendation.

The results of the chi-square tests are presented in Table 5 for each loyalty card benefit category:

For the loyalty card benefit categories of “Discounts on Purchases” and “Accumulating Points,” the chi-square tests revealed statistically significant associations with customer satisfaction levels. These results indicate that customer satisfaction with these specific benefits has an influence on their loyalty to supermarkets or chain stores.

However, for the loyalty card benefit categories of “Exclusive Offers,” “Personalized Deals,” and “Faster Checkout Process,” the chi-square tests did not find statistically significant associations with customer satisfaction levels. This suggests that customer satisfaction with these benefits may not have a significant impact on their loyalty to supermarkets or chain stores.

Overall, the results indicate that customer satisfaction with specific loyalty card benefits, such as discounts on purchases and accumulating points, can influence their loyalty to supermarkets or chain stores in the Albanian market. These results emphasize the importance of offering attractive and beneficial loyalty card programs to enhance customer satisfaction and foster long-term loyalty.

Customer loyalty to the supermarkets or chains store

The third research objective focused on examining the associations between loyalty card usage and customer loyalty to supermarkets or chain stores in the Albanian market. The hypotheses 3 that is tested is: There is a relationship between loyalty card usage and customer loyalty to supermarkets or chain stores in the Albanian market.

To test the hypotheses, the survey data collected from the respondents were analyzed to examine the relationship between loyalty card usage and customer loyalty. The data included the frequency of loyalty card usage and the corresponding customer loyalty responses.

Table 6 presents the distribution of participants across different levels of loyalty card usage frequency:

The data were further analyzed to explore the relationship between card usage frequency and customer loyalty. The results are summarized in Table 7 and Figure 2.

Figure 2. Relationship between card usage frequency and customer loyalty.

To determine the relationship between loyalty card usage frequency and customer loyalty, chi-square tests of independence were conducted. The analysis compared the observed frequencies with the expected frequencies under the assumption of independence.

The chi-square test results for each loyalty card usage category are as follows:

The chi-square tests revealed statistically significant associations between loyalty card usage frequency and customer loyalty for the categories of “Every Time” and “Frequently”. These results indicate that customers who reported higher frequencies of loyalty card usage were more likely to express loyalty to supermarkets or chain stores.

However, for the categories of “Occasionally,” “Rarely,” and “Never,” the chi-square tests did not find statistically significant associations with customer loyalty. This suggests that lower frequencies of loyalty card usage may not have a significant impact on customer loyalty to supermarkets or chain stores.

Based on the results, Hypothesis 3 is supported by the finding of a relationship between loyalty card usage and customer loyalty among customers who reported higher frequencies of card usage in the Albanian market. This highlights the importance of encouraging frequent usage of loyalty cards to foster customer loyalty.

Impact of loyalty card satisfaction on customer loyalty

Hypothesis 4: consumers who are satisfied with the benefits provided by loyalty cards are more likely to exhibit higher levels of loyalty to supermarkets or chain stores in the Albanian market.

To test the hypotheses, the survey data collected from the respondents were analyzed to examine the relationship between customer satisfaction with loyalty card benefits and their levels of loyalty to supermarkets or chain stores.

The survey included questions related to customer satisfaction with loyalty card benefits, categorized into levels such as “Very Satisfied,” “Satisfied,” “Neutral”, “Dissatisfied,” and “Not Answered.” The levels of loyalty to supermarkets or chain stores were measured based on responses such as “Significantly influences, “To Some Extent”, “Not Sure,” “Does Not Affect,” and “Not Answered.” Table 8 presents the observed frequencies of loyalty card satisfaction and customer loyalty levels. Table 9 shows the chi square test results of the Loyalty card benefits and customer satisfaction.

To determine the relationship between loyalty card satisfaction and customer loyalty, chi-square tests of independence were conducted. The analysis compared the observed frequencies with the expected frequencies under the assumption of independence.

The chi-square test results for loyalty card satisfaction and customer loyalty are as follows:

The chi-square test revealed a highly significant association between loyalty card satisfaction and customer loyalty in the Albanian market. This indicates that customers who reported higher satisfaction levels with loyalty card benefits were more likely to exhibit higher levels of loyalty to supermarkets or chain stores.

The results support Hypothesis 4, suggesting that consumer satisfaction with the benefits provided by loyalty cards plays a crucial role in influencing customer loyalty. When customers are satisfied with the benefits they receive through loyalty card programs, they are more likely to exhibit loyalty to supermarkets or chain stores.

Tailoring loyalty card benefits to customer preferences

Hypothesis 5: Organizations that tailor loyalty card benefits to meet the needs and preferences of their customers will experience higher customer satisfaction and loyalty in the Albanian market.

To test Hypothesis 5, the focus was on understanding the impact of customized loyalty card benefits on customer satisfaction and loyalty in the Albanian market. The hypothesis suggests that when organizations personalize loyalty card benefits to align with the needs and preferences of their customers, it will result in higher levels of customer satisfaction and loyalty.

Based on the survey responses and data analysis, the following findings were obtained:

The chi-square test results indicate that there is a significant association between loyalty card benefits tailored to meet customer needs and preferences and higher levels of customer satisfaction in two categories: “Accumulating Points” (p-value = 0.045) and “Discounts on Purchases” (p-value = 0.062). This suggests that when loyalty card benefits are customized to include features like accumulating points or offering discounts on purchases, it positively impacts customer satisfaction.

However, for the categories of “Exclusive Offers/Promotions,” “Personalized Recommendations/Deals,” and “Faster Checkout Process,” the chi-square tests did not reveal a significant association with customer satisfaction. Although these categories did not show a statistically significant relationship, further analysis and investigation may be required to explore potential factors influencing customer satisfaction in these areas.

Overall, the findings provide some support for Hypothesis 5, suggesting that organizations that tailor loyalty card benefits to meet the specific needs and preferences of their customers can enhance customer satisfaction. However, the impact on customer loyalty was not directly examined in this study and requires further investigation to draw conclusive results.

These findings highlight the importance of understanding customer preferences and personalizing loyalty card benefits to create a positive customer experience, ultimately leading to higher satisfaction levels in the Albanian market.

Awareness of loyalty card programs

The findings regarding the awareness of loyalty card programs indicate that a significant proportion of respondents in the Albanian market were aware of such programs. The majority of individuals (67.74%) reported being aware of loyalty card programs offered by supermarkets or chain stores. This supports Hypothesis 1, which stated that the majority of respondents would be aware of loyalty card programs.

The high level of awareness suggests that loyalty card programs have gained traction and visibility in the retail industry in Albania. Supermarkets and chain stores have successfully implemented and promoted these programs, capturing the attention of a considerable number of consumers. This finding aligns with previous research conducted by Smith and Johnson (2019), highlighting the prevalence of loyalty card programs in the retail industry.

The awareness of loyalty card programs was further analyzed based on gender and age groups. The tables presenting the awareness levels among female and male participants in different age groups provide valuable insights into the variations in awareness across different demographic segments. These variations may reflect differences in exposure to marketing efforts, shopping behaviors, and preferences among different consumer groups. Understanding these variations can help retailers tailor their promotional strategies and communication channels to effectively reach and engage specific target segments.

Likelihood to recommend

The findings related to the likelihood to recommend supermarkets or chain stores with a good loyalty card program indicate positive sentiments among the majority of respondents. A significant proportion expressed a likelihood to recommend, with “Likely” being the most common response. This supports Hypothesis 2, which posited that customers who are satisfied with the benefits provided by loyalty card programs are more likely to exhibit higher levels of loyalty.

The chi-square test results for each loyalty card benefit category provide insights into the relationship between loyalty card satisfaction and the likelihood of recommendation. Specifically, the categories of “Discounts on Purchases” and “Accumulating Points” showed statistically significant associations with customer satisfaction levels. This suggests that customers who are satisfied with these specific benefits are more likely to exhibit higher levels of loyalty and recommend supermarkets or chain stores.

However, it is important to note that the categories of “Exclusive Offers/Promotions,” “Personalized Recommendations/Deals,” and “Faster Checkout Process” did not show statistically significant associations with customer satisfaction levels. This implies that while these benefits may contribute to overall customer satisfaction, their impact on customer loyalty and likelihood to recommend may be less pronounced. Further analysis and investigation may be necessary to explore potential factors influencing customer satisfaction and loyalty in these areas.

Customer loyalty to supermarkets or chain stores

The analysis of customer loyalty to supermarkets or chain stores based on loyalty card usage frequency provides important insights into the relationship between loyalty card usage and customer loyalty. The findings support Hypothesis 3, indicating a significant association between higher frequencies of loyalty card usage and higher levels of customer loyalty.

Customers who reported using their loyalty cards every time or frequently exhibited higher levels of loyalty to supermarkets or chain stores. This suggests that frequent usage of loyalty cards plays a role in fostering customer loyalty. On the other hand, lower frequencies of loyalty card usage (occasionally, rarely, or never) did not show a significant impact on customer loyalty. This implies that occasional or infrequent usage of loyalty cards may not have a substantial influence on customer loyalty.

These findings emphasize the importance of encouraging frequent usage of loyalty cards to enhance customer loyalty. Retailers can consider implementing strategies to promote and incentivize regular usage of loyalty cards, such as offering additional rewards or exclusive benefits for customers who use their cards consistently.

Impact of loyalty card satisfaction on customer

Loyalty The analysis of loyalty card satisfaction and its impact on customer loyalty supports Hypothesis 4, which proposed that consumers who are satisfied with the benefits provided by loyalty cards are more likely to exhibit higher levels of loyalty.

The chi-square test results reveal a highly significant association between loyalty card satisfaction and customer loyalty. Customers who reported higher satisfaction levels with loyalty card benefits were more likely to exhibit higher levels of loyalty to supermarkets or chain stores. This finding highlights the importance of customer satisfaction in driving customer loyalty. Retailers should prioritize efforts to ensure that their loyalty card programs are designed to meet customer needs and preferences, thereby enhancing satisfaction levels and fostering long-term loyalty.

Tailoring loyalty card benefits to customer preferences

The investigation of tailored loyalty card benefits and their impact on customer satisfaction provides insights into the relevance of customization in loyalty card programs. Hypothesis 5 proposed that organizations that tailor loyalty card benefits to meet the needs and preferences of their customers will experience higher customer satisfaction and loyalty.

The chi-square test results indicate a significant association between loyalty card benefits tailored to customer needs and preferences and higher levels of customer satisfaction in the categories of “Discounts on Purchases” and “Accumulating Points”. This suggests that when loyalty card benefits are customized to include features like discounts on purchases or accumulating points, it positively impacts customer satisfaction.

However, the categories of “Exclusive Offers/Promotions,” “Personalized Recommendations/Deals,” and “Faster Checkout Process” did not show statistically significant associations with customer satisfaction. This indicates that further investigation may be necessary to explore potential factors influencing customer satisfaction in these areas.

Limitations

This study has certain limitations that should be considered. Firstly, the findings are based on a convenience sample, which may limit the generalizability of the results to the entire population of customers in the Albanian market. Secondly, the study focused on loyalty card programs offered by supermarkets or chain stores, excluding other retail sectors. Future research could explore a more diverse sample and consider additional retail contexts to gain a comprehensive understanding of loyalty card programs’ effects.

Recommendations

Based on the findings of this study, several recommendations can be made for practitioners and researchers to enhance the effectiveness of loyalty card programs and improve customer engagement and loyalty.

Firstly, it is crucial for supermarkets and chain stores to invest in promoting loyalty card programs to customers through various channels. This includes utilizing advertising, in-store displays, and digital marketing to ensure effective communication and widespread awareness. By enhancing awareness of these programs, organizations can attract more customers and encourage their participation (Jones et al., 2017a).

To further optimize loyalty card programs, organizations should continuously assess customer feedback and preferences. By regularly analyzing customer needs, preferences, and shopping behaviors, organizations can identify areas for improvement and customization. This will help in enhancing the benefits offered through loyalty cards and ensuring they align with customer expectations (Blazevic et al., 2016a).

Encouraging frequent usage of loyalty cards is another important strategy. Organizations can implement various incentives and rewards to motivate customers to actively engage with the program. This can include offering exclusive promotions, personalized deals, and incentives for repeat purchases. By creating a sense of value and exclusivity, customers will be more likely to utilize their loyalty cards regularly (Reinartz and Kumar, 2018).

Personalization plays a significant role in enhancing the customer experience. By leveraging customer data and shopping patterns, organizations can personalize the benefits of loyalty cards. This involves providing tailored recommendations, targeted offers, and deals that align with individual preferences and needs. Personalization creates a unique and personalized shopping experience, fostering stronger customer loyalty (Kumar and Reinartz, 2016).

In order to gain a comprehensive understanding of the long-term effects of loyalty card programs on customer behavior and loyalty, future research should consider conducting longitudinal studies. This will enable researchers to track the dynamic relationship between loyalty card programs and customer loyalty over an extended period of time. Longitudinal designs provide valuable insights into the effectiveness and sustainability of loyalty card programs (Sharp et al., 2017a).

In addition to quantitative research, qualitative research methods such as interviews or focus groups should be employed. Qualitative research allows for a deeper exploration of customers’ perceptions, experiences, and motivations related to loyalty card programs. By understanding the underlying reasons behind customer behaviors, organizations can make more informed decisions and further enhance the effectiveness of loyalty card programs (Panda and Swain, 2019).

While this study focused on the Albanian market, it is important for future research to explore loyalty card programs in different cultural contexts and markets. This will help assess the generalizability of findings and identify potential cross-cultural differences in customer behavior and preferences. Understanding the cultural nuances and context-specific factors can guide organizations in tailoring their loyalty card programs to specific markets (Rundle-Thiele et al., 2020a).

By implementing these recommendations, practitioners can strengthen their loyalty card programs, increase customer engagement, and foster long-term customer loyalty. Simultaneously, researchers can contribute to the advancement of knowledge in this field by further investigating the impact of loyalty card programs on customer behavior and loyalty in diverse settings.