Exploring the Relationship Between Customer Loyalty and Electronic Loyalty Schemes: an Organisational Perspective

Electronic loyalty schemes (ELSs) first appeared on the Irish retail landscape when Superclub was launched by the Irish grocery multiple Superquinn in 1993. While ELSs are now commonplace in the Irish retail sector, the rationale for their introduction remains unclear. Loyalty measurability remains a ubiquitous concern within the business literature. This paper offers an organisational perspective on the role and operation of one electronic loyalty scheme. It investigates the benefits of ELSs and their contribution or otherwise to the development of loyalty. The paper reiterates the belief that the real advantage of ELSs resides with their data mining potential to produce rich marketing information for strategic advantage. The article concludes that in a competitive context, the true value of any advantage arising from loyalty schemes is questionable, that strategic decisions based on behavioural measures alone are suspect and that greater opportunities exist to employ more innovative and creative strategies in rewarding ‘loyal’ customers.