The Effectiveness of Loyalty Programs in Shaping Long-Term Customer Retention

Muhammed Zakir Hossain, Fabiha Enam and Fariha Tazin
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Muhammed Zakir Hossain: Associate Professor, Department of Business Studies, State University of Bangladesh, Bangladesh
Fabiha Enam: Senior Lecturer, BRAC Business School, BRAC University, Bangladesh
Fariha Tazin: Assistant Professor, Department of Business Studies, State University of Bangladesh, Bangladesh

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Abstract: Loyalty programmes have proved to be a key strategic initiative for companies looking to build lifetime value and remains part of the weapons (ammunition) in their arsenal. Thus, being able to quantify which are the leading drivers (or success factors) behind the effectiveness of structured loyalty programs is important at a moment when many organizations in sectors such as retailing, hospitality and telecommunications services finalize their investments into this category. The purpose of this study is to empirically investigate how five important antecedents—loyalty program attractiveness (LPA), reward value perception (RVP), personalization level (PL), customer engagement (CE) and customer satisfaction(CS)—affect long-term customer retention(CTR). In this paper, CTR is taken as the dependent variable, and other factors (LPA, RVP, PL, CE, CS) are set as independent variables. The research instrument To collect data the researchers developed a structure questionnaire based on previous validated scales. A convenience sampling method was employed and 360 self-administered questionnaires were completed by customers involved in different loyalty programs. We received 196 responses, and after excluding 18 incomplete answers, the final sample unit was n = 178. The correlations between variables and hypotheses were tested in a model through the SPSS (version 26), using a significance level of 5%. The findings confirm that all five independent variables exert the significant impact on LCR. Finally, the work concludes with theoretical and managerial contributions and directions for future research.

Keywords: Customer Retention; Customer Satisfaction; Customer Engagement; Personalization; Reward Value Perception; Loyalty Program Attractiveness (search for similar items in EconPapers)
Date: 2026-01-06
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Published in European Journal of Science and Modern Technologies, 2026, 2 (1), pp.111-123. ⟨10.59324/ejsmt.2026.2(1).08⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05736406

DOI: 10.59324/ejsmt.2026.2(1).08

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