Essay on Rewarding Customer Loyalty: Best Practices, Competitor's Response, Airline Examples

Introduction

The idea of rewarding customer loyalty is not new to organizations as numerous self-service businesses used the method to grow in the early 20th century. As time progressed, trading stamps and coupons were introduced to make their business attract more customers. The paper, therefore, is premised on a discussion regarding response to competitor's loyalty program, the best practice example of department store loyalty program, airline industry with superior loyalty programs, and new ideas for an airline loyalty program. Also, the political, economic, social, cultural, and ethical factors regarding customer loyalty programs are discussed.

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Response to Competitor's Loyalty Program

The company should respond to its primary market-leading competitor's latest loyalty program by mimicking actions such as those of airline frequent flyer programs, which rewards both customer and employee loyalty to attract more customers. Also, it should identify stakeholders and shareholders who account for most revenues. Thus, through technology, it will always facilitate different ways of tailoring offerings and programs to individual customers. Nevertheless, when the organization decides to offer rewards, they will always receive favorable treatment of taxes as the awards will not be counted as income (Deighton & Kindley, 2013). The action will then encourage customers to opt for their best or favorite providers, even though it might be costly to the company. As time progresses, the customer-based loyalty programs shall be widespread that will give the company a pleasing reputation.

Department Store Loyalty Program Best Practice Example

The department store or the brand's loyalty program can engage customers in being loyal by providing excellent customer service such that when a client rents a car for leisure or business, they should be added at least extra hours that will be assumed to be used in returning the vehicle (Deighton & Kindley, 2013). Discounts should also be offered for regular customers as they will tend to advertise the company while hiring more and meeting new people or friends daily.

Airline Industry with Superior Loyalty Programs

The airline premier loyalty programs are still working as they always focus on frequent-flyer programs that offer redeemable miles for free travel according to the paid miles traveled, for instance, American Airlines (McCall & McMahon, 2016). In most cases, the program is always successful as it has high perceived value for the clients who travel more often and costs Americans very little to obtain a free seat that would not have been occupied.

New Ideas for Airlines Loyalty Program

One can ensure that a new idea for creating customer loyalty is not replicated or rivaled by competitors by enacting copyright measures in the nation as well as the industry. Also, when the company is always known for delivering quality services, customers will ever boost their reputation by providing good reviews, which might prompt new customers to try the services. With the action, in case competitors try to replicate the ideas, there shall always be teamwork between the company and the customers to deny any false allegation.

Political, Economic, Social, Cultural & Ethical Factors

Political Factors

Political factors often relate to legislative laws, and they include political stability of a nation, environmental regulations, consumer protection laws, trade and tariff restrictions, employment laws, and tax policies (Deighton & Kindley, 2013). Therefore, to enhance customer loyalty, all the depicted factors should be adhered to for the success of the involved organization, customers, and the country at large.

Economic Factors

Economic factors include trends of unemployment, fiscal policies, exchange rates, interest rates, inflation rates, and economic growth indicators (McCall & McMahon, 2016). For the organization to retain its loyal customers, it should reduce its interest rates to them by offering discounts and being transparent so that there might be no inflation.

Social Factors

Social factors consist of social classes, population growth rate, health consciousness, career attitudes, age distribution, and other cultural aspects. Every organization often has its tradition and ways of accommodating clients without complaints being issued. For instance, platinum members should be offered there seats so that they do not struggle with other flight boarders (Deighton & Kindley, 2013). However, the action will always depend on different social classes as they will still have to be charged extra for their specialty. Customers who have children should also be offered individual seats that are secured for their kids in case of an accident that might occur.

Cultural Factors

Cultural factors include the tradition of an organization since it was established. For instance, offering discounts to loyal customers or the addition of extra time to rented vehicles. Also, the number of hired employees should balance in gender or the reporting time to work (Deighton & Kindley, 2013). The depicted often vary in different organizations, and every company often fights for the best reputation in their business.

Ethical Factors

Ethical factors include labor laws, tax laws, or other laws concerning the organization, which is not considered as political factors. For instance, the Olympic rent a car, or the American airlines have laws governing the employee interests as well as their service delivery (Wang, Lewis, Cryder, & Sprigg, 2016). In case an employee has many good reviews, rewards might be offered as a way of appreciating their services.

Conclusion and Final Analysis

In summary, the Olympic rent a car company should mimic the action of American airlines to earn customer loyalty. Also, the organization should focus on delivering quality and reliable services to its clients to enhance their reputation, which will, in turn, attract more customers. The organization should also prioritize its loyal customers and offer discounts to them to retain them. Different political, social, cultural, economic, and ethical factors have also been discussed, which should be followed by the organization for its success, that of the employees, customers, and the nation at large.

References

Deighton, J., & Kindley, J. (2013). Olympic Rent-A-Car U.S.: Customer loyalty battles. (Harvard Business School Case No. 913568).

McCall, M., & McMahon, D. (2016). Customer loyalty program management: What matters to the customer. Cornell Hospitality Quarterly, 57(1), 111-115. DOI: 10.1177/1938965515614099

Wang, Y., Lewis, M., Cryder, C., & Sprigg, J. (2016). Enduring effects of goal achievement and failure within customer loyalty programs: A large-scale field experiment. Marketing Science, 35(4), 565-575. Doi: 10.1287/mksc.2015.0966