Building Loyalty Through Customer Satisfaction

1.0 Introduction

1.1 Background of the study

Customer loyalty results when a customer remains faithful to a particular business entity, and this is noted when the customer makes frequent purchases. It is perceived that customer loyalty is a behavioral concept, entailing a repetition of product or service purchase, thus, measured as the series or share of purchases, referrals, magnitude of relationships or all of the above mingled together (Liu, 2007). Loyal customers have proven to be beneficial to a business entity, since they make frequent purchases of products and services, thus, increasing a firm’s profitability. On the other hand, for a firm to enhance customer loyalty, it has to ensure that it provides quality products and services that meet or exceed customer expectations and promote customer service in order to improve customer satisfaction (McCall & Voorhees, 2010).

Customer satisfaction is the basis of customer loyalty and acts as a process of building sustainable customer relationship that culminates to an organization’s competitive advantage. Notably, customer satisfaction is regarded as a barometer that predicts the future customer behavior (Liu, 2007). In this regard, it should be treated as the key focus for any business seeking to convert customers into loyal customers. It is impossible for a business to grow in case the company ignores or disregards the needs of a customer. Satisfied and loyal customers are much economical to retain as compared to attracting new customers (Sharp, 2016). For this reason, it is worth taking note of the fact that for organization to be successful in future, it is important that it maintains a high rate of customer loyalty, owing to the fact that it costs more to acquire new customers as compared to maintaining an already existing customer.

Owing to high competition in the industries, firms such as Sainsbury’s have resorted to the adoption of loyalty schemes in order to gain a competitive edge against their competitors. Loyalty programs refer to the techniques that a firm uses to encourage more purchases from existing customers (Chen & Hu, 2010). These loyalty programs are often considered as value sharing instruments and can enhance consumers’ perception of what a firm has to offer. Moreover, they highly influence customer buying behaviour especially those that are perceived to be best, in terms of fulfilling customers’ interests. In line with this, loyalty programs need to reach the right customers and need to be built within proper discipline and strong financial model (Mimouni-Chaabane & Volle, 2010). Customers are usually attracted to firms that offer loyalty schemes that match their needs. Consequently, loyal customers help firms’ profit portfolios through their willingness to increase the purchase frequency, increase the spending by patronizing new products/services, recommend the benefits to others and provide valuable feedback for the improvement of service (Chen & Hu, 2010).

1.2 Aim of the study

This study focuses on the role of loyalty cards on customers’ buying behavior, and also, how they affect Sainsbury’s customers. It is evident that loyalty cards enhance customer retention, owing to the fact that they offer rewards, as they are regarded as an incentive for the customers to have regular purchases at Sainsbury’s. This study therefore sought to determine how loyalty schemes affect consumers’ buying behavior within Sainsbury’s in the last three years. The main aim of this study is then as presented below:

To determine how loyalty schemes affect customers’ buying behavior within Sainsbury in the last three years.

1.3 Objectives of the study

In order to carry out the research efficiently, the aim was split into specific objectives as follows;

To analyze the impact of loyalty schemes on customers’ buying behavior

To determine the level of influence that loyalty schemes have on customer preferences

To evaluate the influence that loyalty schemes have on getting repetitive customers

To determine the level of customer satisfaction with respect to loyalty schemes in Sainsbury’s

1.4 Research questions

The aforementioned research objectives were then formulated into research questions, which would need to be answered in the study. Having answered the research questions implies that the objectives would be met and so is the aim of the study. The research questions are as presented below

What are the current themes on customer loyalty within the retail sector

Is there a link between loyalty schemes and loyal customers?

How does the sales and types of schemes compare in the last three years?

1.5 Rationale of the study

There has been stiff competition due to advancements in technology in the UK retail sector, thus creating a need for businesses to adopt customer loyalty programs to counter the competition (Van Doorn et al., 2010). Over the years, Sainsbury’s has been using loyalty schemes to aid it in retaining its loyal customers and attracting new ones, in order to boost the profit of the organization. In this regard, it is the responsibility of Sainsbury’s loyalty programs to offer value, as well as other customer benefits. It is then or great importance for this study to determine how loyalty schemes affect customers’ buying behavior in Sainsbury’s within the last three years (Huang & Chen, 2010).

1.6 Outline of the study

The first part of this study is the introduction, which provides the background information of the study, aim, objectives, research questions, purpose, as well as the rationale for conducting this research. In addition, it also provides a summary of the dissertation structure. The second chapter provides a critical review of the existing academic literature, which purposes to identify various theoretical ideas, theories, concepts, as well as issues that relate to loyalty schemes, and their effects on the buying behavior of customers. The third chapter provides various research methods, thus describing various types of research that this study adopted. These include the research design, the sampling design, as well as other relevant techniques that were considered as appropriate for this study, thus, justifying the final methodology that has been selected. The fourth chapter provides the research findings, which summarizing the findings derived from the primary research and secondary research. Aside from this, this chapter also provides a discussion of the findings. Finally, the last chapter provides the conclusion and recommendations chapter, which summarizes main points that were identified in the process of conducting the research. This chapter points out the significant directions that are of great importance for further studies. Moreover, the chapter provides a summary of the study’s overall findings, as well as the critical success factors that may be necessary for the design of effective loyalty schemes that enhance long-term customer trust and loyalty.

2.0 Literature Review

2.1 Introduction

This chapter provides reviews from the literature, based on the research questions. The literature reviews presented in this section have been derived from scholarly books, journals, as well as websites, which relate to the loyalty schemes adopted in Sainsbury’s, in the last three years, and how they affect customers’ buying behaviour. Firstly, this paper will provide Sainsbury’s company profile. Following this, it will provide an insight regarding loyalty schemes and customer loyalty, and then provide the types of loyalty schemes adopted at Sainsbury’s in the last three years. Thereafter, this chapter will provide a deep understanding of how loyalty schemes affect customers’ buying behaviour within Sainsbury’s. Finally, this chapter will provide a conclusion, which will summarize its entire content.

2.2 Sainsbury’s company profile

Sainsbury’s is a public limited company, established in 1869, and presently, it is one of Britain’s longest standing food retailing chains. It is worth noting that Sainsbury’s started as a chain of grocery, which aimed at producing its products at affordable prices. In line with this, it is clear that the company’s aim of producing products at affordable prices was its market entry strategy (Sainsbury’s plc, 2019). Moreover, it is evident that the company operates in a variety of store formats, which includes convenience stores, as well as supermarkets. It has an online grocery and also engages in general merchandise, whereby, it provides clothing, technological products, loyalty programs, as well as energy solutions, amongst others (The Guardian, 2010). The company has approximately 440 stores in the UK and its largest store stocks over 23,000 products. Evidently, Sainsbury’s was once the UK’s largest food retailers. However, due to stiff competition in the market, Tesco pulled into being the leading brand, and with time, Asda followed after Walmart stores acquired it, thus, threatening Sainsbury’s to drop to position three (Reuters, 2019). The company has employed 160,500 employees and its headquarters is in London, UK. It is also evident that it has taken 16.5% of the UK’s retail market share. Significantly, in 2018, Sainsbury’s had a revenue of $39,927.48 (Sainsbury’s, 2018). The company’s annual revenues in the years between 2014 and 2018 are as provided in the figure below.

2.3 Loyalty schemes and customer loyalty

Hill & Alexander (2017) point out that loyalty schemes purpose to establish and also maintain a significant relationship with customers, majorly because it is easier retaining a loyal customer than finding a new one. Noteworthy, loyalty schemes are designed, with an aim of rewarding customers who make their purchases frequently. In other words, it is a company’s strategic way of showing its customers gratitude (Zichermann & Linder, 2010). As such, loyalty schemes may include benefits associated with discounts, long-term special offers, cash-backs, coupons, as well as free products amongst others. Loyalty schemes ensure that a company engages its customers, enhances loyalty, and can as well encourage customers to promote a company’s brand through word-of-mouth to other customers (Gómez et al., 2012). Customer loyalty is a vital aspect of a business, which provides either a product or a service. Many companies such as Sainsbury’s, (in the past three years), purposed to engage in various ways that increase the loyalty of their customers, majorly because it promotes a positive effect on the company’s profitability (Allaway et al., 2011). Significant to note is the fact that the attachment of customers to a specific brand over a long time is regarded as loyalty. In this regard, customers are able to express their brand loyalty by purchasing the product continually and engaging in positive referrals through word-of-mouth. Kim et al. (2013) indicate that there are certain factors affecting customer loyalty and they include the product quality that a company provides and the company’s corporate image. Studies such as that conducted by Ramanathan et al. (2017) often conclude that a positive relationship exists between a company’s corporate image and customer loyalty, whereby, the better the corporate image, the higher the rate of customer loyalty. Moreover, the satisfaction of customers is regarded as a major aspect, which affects customer loyalty (Meyer-Waarden, 2015). This is owing to the fact that a satisfied customer can be a loyal customer to a company, and can, therefore, purpose to spread positive reviews about the brand through word-of-mouth. However, it is also evident that a satisfied customer may as well fail to be loyal. In this regard, companies such as Sainsbury’s should be obligated to ensure that its customers are satisfied and loyal, and this can easily be enforced when the company purposes to engage more customer loyalty schemes (So, et al., 2015).

2.4 Types of loyalty schemes used at Sainsbury’s in the last three years

2.4.1 Point System

The point system type of loyalty scheme is commonly used by various businesses, and it supports repeated, as well as short-term purchases (So, et al., 2015). Customers gain points each time they purchase an item, and in turn, the cumulative points that they collect are exchanged for a given reward. In the last three years, Sainsbury’s has been engaging in Nectar card loyalty scheme, which is the UK’s most extensive loyalty scheme (Moneywise, 2018). The scheme is app-based and allows Sainsbury’s customers to cumulatively collect points, not on the basis of how much they have spent, but for how often or how long they have purposed to be shopping with Sainsbury’s. Sainsbury’s adopted this loyalty scheme, in order for it to know its customers better than any other person and presently, the company has significantly acquired a significant insight level, which then has enabled it to invest in loyalty, as the most significant customer asset (Kumar & Reinartz, 2018). By presenting their Nectar membership card at the checkout, customers earn their loyalty points in various Sainsbury’s in-store supermarkets. Moreover, by registering a Nectar membership along with payment details, Sainsbury’s customers can as well earn points whilst shopping online with Sainsbury’s. It is significant to note that Nectar loyalty scheme is free to join, and it allows Sainsbury’s customers to acquire one point for every £1 that they spend in Sainsbury’s supermarkets and Sainsbury’s online stores (French, 2018). Additionally, customers can also accrue their points using Sainsbury’s bank products. Sainsbury’s purchasing credit cards for banks, for instance, allows customers to earn a total of 1000 Nectar points every time they spend a total of £35 or more during the first two months, and this can accumulate up to 10,000 points (Moneywise, 2018). It is also significant to note that Sainsbury’s allows its customers to five their five favourite offers, in order for them to be able to build more points, based on the items they purchase regularly. This poses as a significant and effective way of tapping into Sainsbury’s customers’ frequent habits, thus ensuring that they prefer purchasing the items they need from Sainsbury rather than its competitor companies. Significantly, Sainsbury’s 500 Nectar points are equivalent to £2.50 in worth (Moneywise, 2018). Sainsbury’s adds the points earned by its customers to their specific member accounts and they can be redeemed, and used for a wide variety of voucher-based rewards. As such, these rewards can be spent in-store or online, straight from the card. It is also evident that the reward can be used in buying treats such are holidays, day outs, or even hotels at nectar.com. Sainsbury’s purchases indicate that it is getting a significant value, based on brand loyalty (French, 2018). In the company’s brand loyalty index, 71% of its customers noted that Sainsbury’s has a good loyalty scheme (Nectar), and 46% of the customers note that the loyalty scheme offers good, as well as frequent promotional offers, thus implying that customers like such loyalty schemes (Baldwin, 2018).

2.4.2 Gift cards

Offering gift cards to a company’s valuable, as well as loyal customers poses as an effective way to retain them. This results in strong customer engagement, as well as an increase in the forms of business, which the company does with the customers. Customers can pre-load their gift cards and can decide to redeem them for fully-priced services, as well as merchandise. The most significant aspect of gift cards is that customers choose when they can decide to redeem them when it is most convenient for them to use them (Kumar & Reinartz, 2018). Sainsbury’s has been using gift cards as a loyalty scheme to retain its loyal customers in the last three years. The company’s gift cards can be used in purchasing products in all the varieties of Sainsbury’s stores, as well as coffee shops, which include designer ranges like TU clothing, and also “different by design” forms of homeware (do Vale et al., 2016). Unfortunately, Sainsbury’s customers are not able to redeem their gift cards online. The gifts come, attached inside an envelope, in order to make them look like perfect gifts for special occasions that include birthdays, anniversaries, as well as weddings (Sainsbury’s plc, 2009). Sainsbury’s customers can take their cards to various checkouts and load a given amount (ranging from £1 to £2000) (Sainsbury’s plc, 2009). As such, the card user can then be able to utilize all the amount on the card, or can as well use it partly. Noteworthy, the cards can be re-used, and can be reloaded as often as the customer wishes. Additionally, bulk discounts do apply on these cards, as Sainsbury’s customers can pay less but get more. In line with this, they can collect more Nectar points on purchases, when they redeem in-store (Sainsbury’s plc, 2009).

2.4.3 Coupons

Coupons are an effective way of influencing consumer behaviour. Prior to starting a coupon program, a company should consider the short-term, as well as long-term goals for the business (Hassan & Parves, 2013). It is significant to note that using coupons, can enhance customer loyalty, and can make loyal customers to refer other potential customers through word-of-mouth. However, according to Mrkosová et al. (2014), a company involving in coupons as a strategy should consider the costs involves, as they may result in a reduction of profit, the brand messaging, thus, emphasizing on what the coupon says about the brand, and finally, the company should consider its new and long-term customers. For instance, when trying to reach new customers the company should purpose to dictate where, how and when to promote its coupons (Andriyanenko et al., 2014). Significantly, Sainsbury’s has been using coupons in gaining loyal customers in the last three years. Sainsbury’s offers coupons on first orders made for groceries, and this applies to a household that has not used Sainsbury’s first-time offer. Notably, Sainsbury’s deducts the coupon value from a customer’s order for online groceries, on a condition that the value of products that the customer has ordered for exceeds the qualifying expenditure, which is stated on the coupon (Mrkosová et al., 2014). It is significant to note that Sainsbury’s uses unique coupon codes, and they can only be used in certain shops, thus implying that a specific coupon code for a specific shop cannot be used in another Sainsbury’s online shop. On the other hand, in a bid to retaining its loyal customers, Sainsbury’s charges a minimal fee delivery fee ranging from £1 and £7 for orders of over £40, and as such, a fee ranging from £4 and £7 is charged on orders that should be delivered on the same day (Ali & al Karim, 2011). It is also notable that for orders that are under £40, Sainsbury’s charges £7 as the delivery fee, especially for standard delivery, and in addition, it charges £9 when the orders should be delivered on the same day. Of importance is the fact that Sainsbury’s provides a coupon for retaining its loyal customers, whereby it does not charge any fee for delivering products online, when the grocery orders are worth £100 or higher than that, for products booked to be delivered from Monday to Thursday in the afternoon (after 2 pm) (Hassan & Parves, 2013).

2.5 How loyalty schemes affect customers’ buying behaviour within Sainsbury’s

Customer loyalty poses as a paradox. It is regarded as an attitude-based phenomenon, which can be influenced by initiatives such as loyalty schemes. Demand-enhancing potentials of loyalty schemes are more limited than they may be hoped (Teicher, 2013). There are three perspectives, based on loyalty, which aid in understanding the concept of customer loyalty and they encompass customer brand acceptance, customer brand buying behaviour, as well as customer brand commitment. The loyalty schemes used at Sainsbury’s company purpose to create a bond between Sainsbury’s and its customers. Although the aforementioned three loyalty schemes attract a wide customer interest, they are often difficult to support, using the present knowledge regarding competition, as well as buying behaviour (Hessburg et al., 2010).

2.5.1 How the point system affects customers’ buying behaviour within Sainsbury’s

The benefits associated with customer loyalty are significantly established, as to be enhancing profitability, as well as business sustenance. Notably, outgrowing this form of loyalty acceptance has been under extensive focus, based on Sainsbury’s effort towards maintaining customer loyalty, and stimulating repeat purchases (Teicher, 2013). It is significant to note that Sainsbury’s uses loyalty schemes to encourage its customers’ repeat patronage by offering them a reward value. It is evident that customers are naturally value-driven, and their purchasing decision is based on their value perception. According to Singh & Khan (2012), if customers examine a specific loyalty reward scheme, and note that it is more useful as compared to competing schemes, it is evident that they would be more likely to participate in the loyalty scheme, even in an instance where the customer is in other several schemes. As such, it is evident that customers do hold varied perceptions regarding different loyalty schemes characteristics. In ensuring that customers redeem their points, Sainsbury’s purposes to impose high-spending thresholds, as well as point expiry and this increases the frustrations of customers, in an instance where the points expire prior to them having the opportunity of cashing them in. Conversely, organizations prefer to have a long-term expiration policy. However, Magatef & Tomalieh (2015) point out that there is fear that without the pressure of expiration, customers’ purchases may possibly decline. Moreover, their loyalty may as well fade. Significantly, Sainsbury’s encourages its customers to redeem their rewards, and it is notable that this affects their buying behaviour before and after the redemption. It is noted to occur when these customers redeem part of their accumulated points (Suh & Yi, 2012). It is evident that before and even after purposing to redeem their loyalty points, customers do purchase unusually, as they engage in frequent purchases, as they spend a lot of money per purchase, even in an instance where they are not pressured (Barik & Mittal, 2013). The effects of redemption purchases are noted to be stronger, as compared to the point pressure effects, especially for customers, who weeks before redeeming their points, failed to have sufficient points, which they could subsequently redeem. As such, it is worth noting that redeeming points significantly creates positive feelings, as well as attitudes, which drive customers into purchasing more frequently at Sainsbury’s, thus increasing their loyalty (Henderson et al., 2011).

2.5.2 How gift cards affect customers’ buying behaviour within Sainsbury’s

Customer loyalty at Sainsbury’s is also illustrated in their buying behaviour towards gift cards, which are linked to their satisfaction. It is worth noting that gift cards make customers satisfied, especially when they are able to get treats. In this regard, the implication of their satisfaction is reflected in their buying behaviour, as it is noted that customers who pre-load their gift cards from Sainsbury’s are much loyal (Mimouni-Chaabane & Volle, 2010). The most significant aspect of gift cards is that customers choose when they can decide to redeem them when it is most convenient for them to use them. In this regard, their buying behaviour increases when they plan to have a treat and even after when they intend to purchase them for fully-priced services. In accordance with the writings of Zhao et al. (2014), Sainsbury’s has been using gift cards as a loyalty scheme to retain its loyal customers in the last three years. Ultimate loyalty of the customers emerges due to perceived product superiority, social bonding, synergistic effects, as well as personal fortitude, which then increases the frequency of the consumers’ levels of purchase. In addition, bulk discounts do apply to these cards, as Sainsbury’s customers can pay less but get more, and this increases the frequency of their purchases. Moreover, they can collect more Nectar points on purchases, when they redeem in store, and this increases their loyalty, as well as purchases (Melis et al., 2015).

2.5.3 How coupons affect customers’ buying behaviour within Sainsbury’s

A study conducted by East et al. (2016), on Sainsbury’s customers indicated that coupons have a significant impact, owing to the fact that 45% of the shoppers noted that they purposed to load coupons to their customer loyalty cards, and 90% of them indicated that the coupons changed their buying behaviour. It is evident that Sainsbury’s customers, having coupons buy more, sooner, and they buy products, which they may not have considered otherwise. It is worth noting that because of the availability of the present digital coupons in Sainsbury’s, there is ease in acquisitions, and as such, customers purpose to make their lists and end up protecting their budgets (Malik et al., 2013). Sainsbury’s uses value discount offers, where their customers purchase their products at a high cost, but the delivery of their products are done freely or cheaply because of the coupons, depending on whether the customers are to be retained or gained. In other words, it is evident that coupons increase the customers’ frequency of purchasing. Cost advancement lessens the costs that customers incur at Sainsbury’s and in this manner, Sainsbury’s increases the motivation of the customers to buy (Eri et al., 2011). Generally, value discounting poses as a practice used in initiating item trial, and repeating the purchasing behaviour of current, as well as new customers, and consequently increasing customer loyalty.

2.6 Conclusion

From the above provision, it is evident that sufficient information has been provided, which relate to Sainsbury’s company profile, which then indicates that it has many customers, both online and in store, which then requires it to reinforce customer loyalty. The three customer loyalty schemes used in Sainsbury’s for the last three years (point system, coupons, and gift cards) have been looked into, and the manner in which they affect Sainsbury’s customers’ behaviour is elaborated fully. The provisions in this chapter will aid in providing backed up information, which would be used in the subsequent chapters.

3.0 Methodology

3.1 Introduction

This chapter provides a description of the research methodology that was adopted for this study, thus enabling the researcher to achieve the set research objectives. This chapter will describe different research types that were utilized for the purpose of the research. They include primary and secondary research, qualitative analysis, qualitative data, convenient sampling method, as well as online questionnaire. Moreover, this chapter draws upon various relevant techniques, thus justifying the finally selected methodology.

3.2 Research design

This study used a descriptive research. According to Bernard (2017), a descriptive study is significant in determining who, when, what and how of a given research topic, which is of great essence to a study. The main objective of this study focuses on determining how loyalty schemes affect customer buying behavior within Sainsbury’s in the last three years. Secondary data were derived from various publications of loyalty schemes, scholarly books and journals, as well as Sainsbury’s websites, especially those that touch on customers. Secondary research was included in this study, owing to the fact that it provides information that has already been researched by other scholars, thus, providing significant backed up information that can support the data provided from the primary research. On the other hand, primary data was derived from the actual process of the research. A pilot study was as well conducted in the course of the first week of the study, in which case, errors that were found in the research instruments were rectified, prior to proceeding with the study (Sekaran & Bougie, 2016). The study was conducted in the London city by use of online survey.

3.3 Sampling design

A total of 120 respondents, who are Sainsbury’s customers were engaged in this study. They were sampled from online platforms such as from Sainsbury’s Facebook page, Instagram page and also through email. Notably, the researcher used random sampling, in order to avoid any form of biasness, when selecting the participants for the study (Saunders, 2011). The participants were selected, based on their willingness to participant on this study, owing to the fact that Sainsbury’s has many customers who would have loved to participate on this study. However, various circumstances may prevent them from availing themselves for the research. In this regard, the only factor that was considered was whether the participants had used Sainsbury’s loyalty schemes. This therefore, implied that regardless of age or gender, the 120 participants selected for this study, aided the researcher to determine their views regarding loyalty schemes and its effects on their buying behavior at Sainsbury’s within the last three years.

3.4 Data collection

This study used qualitative research in collecting data. It is significant to take note of the fact that qualitative research was the most appropriate method, as it aids the researcher to determine the views of the participants, their thoughts, as well as opinions regarding an issue. This could consequently aid in bringing forth another subject, which may have been overlooked, yet of great importance to the study (Lindlof & Taylor, 2017). In focusing on qualitative research, this study used questionnaires. Precisely, the study used semi-structured questionnaire, which involved structured questions. This study opted for this type of questionnaire, owing to the fact that it preventing the participants from providing irrelevant information, aside whatever they have been asked on the questionnaire (Fowler Jr, 2013). Additionally, owing to the fact this study involve many participants, it was appropriate to use short and precise questions and answers, which could be quicker. Moreover, for the fact that the participants were to answer these questions without any guidance from the researcher, and at their free time for one week, the questions had to be very simple, or with little complexities. For these reasons, it was appropriate to use structured questions. The participants were issued with the online questionnaires, as it also considered to be cost-effective (Bryman, 2016). The participants were given a period of one week to provide their answers in the questionnaires, thereafter, they were collected back for analysis. The responses of the participants were measures using various scales, meant for different types of questions. These included the normal scale, the rank order scaling, Likert scaling and the ordinal scaling (Bell et al., 2018).

3.5 Validity and Reliability

Reliability is concerned with measuring the consistency, as well as stability with which the used data collection instruments purpose to examine the problem in the study. There are two common tests used in reliability and they include test-retest, and split-half reliability (Robson, 2011). On the other hand, validity test involved in data collection instruments enables a researcher to be able to ascertain whether he or she is measuring the correct concept. A researcher should ensure that the following re attained; the validity of the content, the construct validity, and the criterion validity (Bell et al., 2018). In order to be able to achieve the constructs validity, the researcher in this study ensures that the actual study findings were similar to the findings that were derived from the pilot study, which had been carried out, prior to the actual study (Lindlof & Taylor, 2017). On the other hand, in order to achieve the reliability of this study, the researcher ensured that the questionnaire was pre-tested with one participant, in order to authenticate reliability. Notably, the pre-testing was conducted using a different participant, other than those that had been selected for this study, in order to avoid any influence on the actual participants prior to when the actual study was conducted (Lindlof & Taylor, 2017). Moreover, the researcher also purposed to ensure reliability by assuring the participants that any of their comments, opinion, or even any other vital information at they gave were based on their sole decision, and as such, it would be treated with utmost confidentiality (Fowler Jr, 2013). Owing to the fact that timing posed as a critical issue in this study, the researcher provided the participants with ample, and appropriate time for them to answer the questionnaires, such that their usual daily schedules would not be interrupted.

3.6 Ethical approval

The respondents were assured that their answers would be treated as highly confidential, and as such, they were only to be known to the researcher. In this regard, once the analysis was completed, the respondents were assured that their answers would be discarded. In order to facilitate confidentiality, the questionnaires were designed in a way that did not require the participants to provide their personal details on the questionnaires (Fowler Jr, 2013). Secondly, the participants were given an opportunity to withdraw from the participation whenever they felt like changing their minds, and in such a case, if a participant’s input had already been collected, that implied that it would be discarded. According to Bernard (2017), these two ethical approval practices were regarded as most appropriate as the study was based on qualitative research, which entailed judgmental information such as the experiences, attitudes, as well as opinions of the customers on loyalty schemes and how they affected their buying behavior.

3.7 Conclusion

Based on the provisions in this chapter, it is significant to note that the research methods used, will enable the researcher to conduct a proper analysis of the subsequent chapter (Analysis chapter). The analysis would thereafter aid in meeting the aim of the research.

4.0 Analysis

This chapter provides an analysis of the findings, as well as a significant discussion, which would consequently meet the aim of the research. This chapter will start by providing the findings from the primary research, then the findings from the secondary research. Thereafter, it will provide a critical discussion, which will be followed by a definitive conclusion.

4.1 Findings from the primary research

From the above figure and table (figure 1 and table 1), it is evident that 30% of the participants claimed that they visited Sainsbury’s retail stores 2-3 times. On the other hand, 20% of them noted that they had visited the retail stores 4-6 times, whereas 70% of them claimed that they had visited the stores more than 6 times.

From the above table (table 2), it is evident that brand availability is the most important factor that encourages Sainsbury’s customers to shop at its retail stores, followed by the loyalty scheme benefits as it follows the same order, until the staff service being ranked 7.

From the above figure (figure 2), clearly it indicates that 90 of the participants are holders of loalty cards, whereas 10 of them are not. Moreover, 20 of the participants don’t bother if the retailer they shop from has a loyalty scheme or not.

From the above table and figure (table 3 and figure 3), it is evident that 25% of the participants notes that they have been using the loyalty program at Sainsbury’s for 0-1 year. The same percentage goes for the participants who have been using the loylaty program between the period of 1-2 years. Moreover, 41.7% of the participants have been using the loyalty program for 2-3 years and 8.3% of them have been using it for more than 3 years.

Figure four indicates that 30 participants note that from the loyalty program, they benefit from express counters, 30 of them also stated that they gain from redeeming points. On the other hand, 40 of them note that they gain from special discounts and 20 of them note that they gain from other factors.

From figure 5 above, 90 participants strongly agreed that loyalty program influenced their buying behavior, 10 of them agreed, 15 of them were neutral, 5 of them disagreed and none of them strongly disagreed.

From figure 6 above, 90 of the participants were strongly satisfied with loyalty programs offered at Sainsbury’s, 10 of them were satisfied, 15 ha a neutral stand, 5 of them were dissatisfied, and none of them strongly disagreed.

4.2 Findings from the secondary research

Research from secondary sources note that customer loyalty is the existing strength between a person’s relative attitude, and repeat patronage. In a bid to constructing customer loyalty, various loyalty programs should be conducted on a repetitive business basis, whilst focusing on rewarding customers (Liu, 2007). Based on the findings in the primary research, it is evident that customer loyalty represents a paradox, owing to the fact that it is regarded as an attitude-based phenomenon, which can be greatly influenced by Customer Relationship Management (CRM) activities. For instance, when Sainsbury’s increases popular loyalty, as well as affinity programs (McCall & Voorhees, 2010). The potential of demand for loyalty schemes is notably limited, than it may be hoped. There are three different perspectives regarding loyalty that aid in understanding the loyalty of customers, and they include customer brand commitment, customer brand buying, as well as customer brand acceptance. Liu (2007) point out that loyalty programs that aim are bonding customers with a firm or its products/services through offering additional incentives such as brand availability, experience with the billing counter, seasonal promotion, store ambience, and quality staff service among other factors pose an interesting dilemma. Although these schemes and the additional incentives attract a widespread interest of the customers, they are often difficult to support, whilst considering customer buying behaviour and the current competition in the market (Sharp, 2016). Past researches do suggest that most loyalty schemes do not alter the structure of the market, rather they might purpose on protecting incumbents, and thus, could be noted to increase the marketing expenditures. Retailers such as Sainsbury’s should be obligated towards establishing their strategies to revolve around their customers and should as well build their brands. This can be achieved when they keep growing consistently. They also have to design various customer centric approaches, which enhances customer satisfaction. It is evident that customers will only be loyal is they are benefitting from their relationship with the company (Huang & Chen, 2010). In this regard, Sainsbury’s should consider the preferences of customers, which lead to their gain, in order to enhance their company’s profitability. A review from the literature also classifies CRM in relation to customer lifecycle, owing to the fact that a customer’s like towards a firm may not be generally continuous (Mohsan et al., 2011). Notably, customers be in some instances be dissatisfied with a given loyalty program, and this could consequently impact negatively on the buying behaviour of the customer on a long-term perspective. In a bid to motivating customers towards buying a company’s products or services on a repeated basis, is to increase the incentives, accompanied with the loyalty programs. Kumar (2010) state that owing to the fact that this would lead to increased benefit from the side of the customers, customer loyalty would as well increase and the customers would be able to buy more products from the company repeatedly.

4.3 Discussion

Research from the literature review indicates that satisfaction should be regarded as a necessary step when there is need to enhance loyalty formation. However, it usually becomes of less significance, especially when loyalty begins setting in through other different mechanisms (Wolny & Charoensuksai, 2014). Such mechanisms, when they are omitted from a consideration in the current model, they include roles associated with personal determination, as well as social bonding at a personal or institutional level. When such additional factors, are brought forth into account, the ultimate loyalty emerges, and in this case, it is in a combination of product superiority, social bonding, as well as personal fortitude and their synergistic impacts (Malik et al., 2013). When each of them is not attained, or the organization is unable to attain them, then loyalty potential erodes. The conclusion derived from this conclusion is then evident that loyalty cannot be derived or pursued as an ultimate goal, owing to the nature of the category of the product or disinterest of the customer (Sharma, 2014). However, for some firms such as Sainsbury’s satisfaction poses as the major feasible goal that the company strives to achieve, and in this respect, satisfaction remains the company’s worthy pursuit, whilst considering the obligation of the company to meet the needs of the customers in the marketing community (Rani, 2014).

Although it at times becomes difficult to define loyalty, whilst considering certain situations, the analysis of the research study expounds on how profitable loyal customers can be to Sainsbury’s, how significant it is for the company to retain them, especially by carrying out zero defection schemes, or even by conducting studies on complaints and defections (Gattorna, 2013). In simple terms, it is significant to take note of the fact that customer loyalty creates value to an organization over any other thing and as such, anything that might undermine it, ought to be identified and eliminated (Tingchi Liu et al., 2013). This clearly arise from various studies that note that customers are often very sensible on the quality of services that a company offers to them, and this includes reliability, simplicity, as well as guarantees (Rani, 2014). As such, it is worthwhile for organizational marketers to explore various services, which can be developed with an aim of meeting the needs of the customers. Another aim of customer management is by isolating and also locking them from the company’s competitors’ efforts, owing to the fact that both are complementary, but are not incompatible (Malik et al., 2013). Finally, the respondents noted that they receive various benefits from Sainsbury’s loyalty schemes and these include express counters, they are able to redeem their points, and they receive special discounts. Owing to these benefits, customers note that they are satisfied with the loyalty schemes. This then makes it clear that the benefits that come with loyalty schemes, enables the customers to have more sales whenever they visit Sainsbury’s retail stores, as they purpose to accumulate their points, to be able to reach the maximum number of points for redemptions (Malik et al., 2013). Overall, it is significant to note that the participants for this study acknowledged that loyalty programs are very significant to retail firms. This is based on the major fact that they benefit the firm and the customer as well.

5.0 Conclusions and Recommendations

This dissertation has brought forth a deeper focus, which is customer satisfaction. It is evident that satisfying a customer is a major objective of every business, and as such, businesses acknowledge that retaining their current customers is more profitable, as compared to having to attract and consequently win new ones to replace those that have been lost (Malik et al., 2013). Management, as well as marketing theorists bring forth the significance of customer satisfaction, which is of great importance to the success of a business. They note that it is through customer loyalty that customers can adopt into a firm’s loyalty program. Sainsbury’s uses loyalty schemes as one of its major marketing strategies, and it evident that it is beneficial to both its business, and to the customers (Mandhachitara & Poolthong, 2011). Significant to note, is the fact that customer loyalty is an important tool, which Sainsbury’s uses to create its brand awareness, and as such, since three years ago, the company has been able to use loyalty schemes in making its relationship with customers to be more communicable and also meaningful to the customers. Sainsbury’s has loyalty schemes, which are beneficial to consumers, and as such, they influence their buying behavior. Notably, these loyalty schemes enable them to have more sales, whilst on the other hand, Sainsbury’s benefits from increased profits. For the last three years, the company has been able to understand the expectations of its customers, and this has aided it in meeting their satisfaction, which enhances loyalty (Gattorna, 2013). Sainsbury’s should be obligated to measure the effectiveness of the loyalty schemes periodically, to enhance more profitability for the customers and for the company. Notably, this would certainly aid in increasing the footfalls, as well as the conversion rate of its stores. Moreover, it will aid in enhancing the company’s brand loyalty, especially in the minds of the customers.

5.1 Recommendations

Based on the provisions of this paper, it is significant for Sainsbury’s to look into the following recommendations, in order to boosts its profitability through the use of loyalty schemes, to influence a positive customer buying behavior.

Firstly, the company should purpose on creating mass awareness of its various loyalty schemes, whilst aligning their benefits to the customers. This will enable most of the customers to adopt to its usage, whilst on the other hand it will increase the company’s sales and consequently, its profitability. Secondly, Sainsbury’s should purpose to design the most effective strategy that can aid in making its customers feel privileged using its loyalty schemes. For instance, the company should have a separate billing center, and should also adopt the enforcement of proper attention to the customer by the sales representatives. Thirdly, Sainsbury’s should ensure that its loyalty schemes are designed in a way that suites the requirements of the customer in a finer way, and in this way, the company should separate various loyalty schemes during certain occasions and seasons, in addition to its already normal ones.

Fourthly, Sainsbury’s should focus assisting the customers with their loyalty cards whenever they are buying and as such, the firm should ensure that sales representatives provide the customers with the right guidance. In line with this, the sales representatives should be able to make the customers to understand the significance of accumulating, and also redeeming their points whilst they increase their purchases of the company’s products and services. Finally, and of much great importance is that Sainsbury’s should a database technology, in order to be able to establish personalized dialogues with its customers. In this way, Sainsbury’s will be able to increase more customer loyalty.

5.2 Suggestion for future studies

Notably, this research study is not adequately comprehensive. It is clear that it has a few gaps, which calls for further research in a few areas. The study was conducted through online platforms (emails and Facebook issuing of questionnaires), and as such, the results that have been derived may not depict a full representation of how customers at Sainsbury’s perceive loyalty schemes and how it affects their buying behavior. In this regard, the researcher suggests that there is need for further research to be conducted through face-to-face interviews, in order to obtain a deeper explanation of the perceptions of the customers on loyalty schemes, and how it is concerned with their loyalty to Sainsbury’s.

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