Customer reward programmes and customer loyalty in a German agribusiness

Abstract

This research addressed the benefits of the introduction of a customer reward programme in the German agribusiness industry. It analysed whether such a reward programme improves a company’s competitive advantage. Customer loyalty, revenues, profit contribution and acquisition of customer information were identified as relevant parameters to contribute to the research objective. The samples were taken from customers of a world leading company in the agribusiness industry with about 28.000 employees. Interviews were conducted to gather information on above mentioned parameters. 2.500 customers and leading marketing people of the sample company delivered relevant information during these interviews. On top of that databases and official government statistics were used. Regarding customer loyalty a net promoter score was calculated for members and non-members of the customer reward programme of the sample company. A Likert scale was used to calculate a net promoter score to make a judgement on customer loyalty. Using a Likert scale for this kind of analysis presents a novelty to the research community. For the other parameters (revenue and profitability) a significance test was performed for members and non-members as well. For profitability considerations market shares had to be analysed. The analysis of market shares was done for the sample company but also for main competitors with a significant association between membership in a customer rewards programme and size of the market share. The customer information parameter was analysed using qualitative interviews with leading marketing people of the sample company and official databases. As a result significant associations between membership in the programme and the individual parameters were identified. This led to the conclusion that the introduction of a customer reward programme is worthwhile in the German agribusiness industry and it was concluded that there is most likely a general pattern behind these findings. Based on the research results a company is advised to introduce a customer reward programme especially if competitors have already done so.