The impact of new partners entering partnership loyalty programmes on customer acquisition and retention

Abstract

The aim of the research is to determine how the entry of a partner into a partnership loyalty programme affects customer acquisition and retention for the new partner and existing partners. This research addresses the gap in academic research pertaining to customer acquisition and retention. This study aimed to provide business practitioners with insight when deciding whether to start a standalone single vendor programme or to join an existing partnership programme. This research was a descriptive longitudinal study of a partnership loyalty programme that operated in the financial services sector. The study aimed at producing an accurate representation of the impact of an event and the subsequent changes over time. In this case the event was a new partner joining the programme and the constructs that were analysed over time included customer acquisition and retention. Since the data obtained was in the form of a time series, the appropriate analysis approach to use was to perform a quantitative time series analysis to assess the impact of vendor entry on acquisition and retention using the customer purchase data. This approach allowed for the examination of trends and identification of recurring patterns in the time series. The results showed that a new vendor joining a partnership loyalty programme would experience either constant or gradually increasing customer acquisition as well as customer retention after joining the programme. There was no evidence from the data that a new vendor joining a loyalty programme would have any impact on the customer acquisition or customer retention of the existing vendors within the programme.