Please, respond to the attached classmate discussion posts (125 words each). Thank you
Please, respond to the below classmate discussion posts (125 words each). Please, respond to the below two classmate main posts. (Please, the responses need to be a discussion, not an evaluation. You need to agree/disagree with their opinion and add the reasons why and information regarding the topic discussed. No citation required) Thank you Classmate discussion posts Discussion 1 Grant Ebreo Loyalty programs were intended to “retain customers and develop stronger customer-company bonds (So et al., 2015; Mangold and Faulds, 2009; Kreis and Mafael, 2014)” (Kwiatek & Thanasi-Boce, 2019). By promoting rewards, customers are encouraged to repeat transactions, buy in greater quantities, and more frequently. In developing a successful loyalty program, a company should keep in mind cost-effective strategies when implementing rewards. Rewards that deal significant costs to the company should be avoided. Another aspect should have a unique differential advantage in place for the customers since “many loyalty programs are simply copies of other programs” (Winer & Dhar, 2016). A Single company’s loyalty program may have a lot of members that can mislead actual performance of the program. However, “company performance should be evaluated in relation to customer activity more than just membership status and volume (Kwiatek & Thanasi-Boce, 2019). Lastly, having a loyalty program that support the brand’s value proposition creates a consistent message. Companies who consistently promote valuing customer experience should also incorporate those same ideals in their loyalty programs. Amazon prime membership is a great example that espouses these three aspects. The value of unlimited free shipping coupled with their streaming services, and other perks enhances the entire customer experience. Through Prime membership, the company can convince customers to buy from them exclusively. Lastly, having members to pay upfront, the company can offer unique cost saving deals for the customer without sacrificing profits. Reference Kwiatek, P., & Thanasi-Boçe, M. (2019). Loyalty program activity: Make B2B customers buy more. Marketing Intelligence & Planning, 37(5), 542-554. doi:http://dx.doi.org.saintleo.idm.oclc.org/10.1108/MIP-06-2018-0193 Winer, R. S. and Dhar, R. (2016). Marketing management (4th ed.). Boston, MA: Pearson Learning Solutions. Discussion 2 Leron Neal Loyalty programs are part of a customer retention strategy in a marketing. According to a study on customer loyalty, a truly loyal customer has a long-standing desire to continue a business relationship with a particular company (Isoraite, 2016). Oddly enough, loyalty programs are used to encourage repeat purchasing… (Winer, 2011). While repeat buyers do not exactly fit the description of a loyalist/apostle (Winer, 2011), they are still returning customers therefore loyalty programs do fit into the customer satisfaction equation. As stated by the Customer Insight Group, loyalty programs can reduce the likelihood that customers will move their business to a competitor (Burnett, 2015). The program must be well designed, however, in order to be successful. Derived from Winer, are the following three key aspects that a company must consider when developing a successful loyalty/reward program: a) cost-effectiveness; b) providing differential advantage; c) effective use of collected customer data (Winer., 2011). To illustrate this point, I consider my own experience as an occasional Starbucks customer and rewards program member. I commiserated with many consumers who were disappointed at Starbucks’ recent reward program changes. Mainly at the fact that I now have to spend more money before I get a free drink (Trezza, 2019). Most likely this was a cost-effectiveness driven decision. However, to maintain a differential advantage, Starbucks cleverly tried to put a positive spin on the change by adding the “benefit” of using fewer points (sooner) on free upgrades to regularly priced drinks. As for effective data use it comes as no surprise that Forbes would recognize this company as being “on the cutting edge… (Marr, 2018). In fact, launch of the new program included a significant increase in the amount of data being collected and analyzed to help with business decisions, dealing with everything from personalizing customer experience to product expansions and store locations (Marr, 2018). There is a lot more to effective loyalty programs than presented here. However, with so many companies across various industries making use of them, I cannot imagine any one formula that would fit every business scenario. What stands though, is reward programs are a part of a customer retention strategy and should have at least the three key aspects discussed here in order to be successful. References Burnett, S. (2015). Key Elements of Successful Customer Loyalty Programs. Customer Insight Group, Inc. Loyalty Blog. Retrieved March 26, 2020 from https://www.customerinsightgroup.com/loyaltyblog/key-elements-of-successful-customer-loyalty-programs/. Isoraite, M. (2016). Customer Loyalty Theoretical Aspects. Ecoforum, Volume 5, Issue 2 (9). Retrieved March 26, 2020 from www.ecoforumjournal.ro/index.php/eco/article/download/422/268 Marr, B. (2018). Starbucks: Using Big Data, Analytics and Artificial Intelligence to Boost Performance. Forbes. Retrieved March 26, 2020 from https://www.forbes.com/sites/bernardmarr/2018/05/28/starbucks-using-big-data-analytics-and-artificial-intelligence-to-boost-performance/#545ca02865cd. Trezza, K. (2019). Here's why many Starbucks fans are angry over new rewards program. Today. Retrieved March 26, 2020 from https://www.today.com/food/starbucks-updating-rewards-program-how-get-free-drinks-t150610. Winer, R. S., & Dhar, R. (2011). Marketing management. (4th ed.). Boston: Pearson Learning Solutions.