THE ROLE OF LOYALTY PROGRAM ON CUSTOMER SATISFACTION AND CUSTOMER LOYALTY: STUDY CASE ON SOGO DEPARTMENT STORE

• Main Author: Nabil Ramadhan, Rizal
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/41117
• Institution: Institut Teknologi Bandung

Strong growth of the retail business in Indonesia resulted in tight competition among retailers. Hence, sustainability must be strived to maintain the continuity of their business in maintaining customer loyalty. SOGO Department Store, as the leading retail company in Indonesia invented their member card system as part of loyalty program: SOGO Premier Card. However, SOGO have never assessed the relationship between their loyalty program and their customer satisfaction as well as their customer loyalty. Therefore relationship between loyalty program towards the customer satisfaction and customer loyalty is uncertain and this research aims to assess the influence of SOGO Premier Card as loyalty program toward customer satisfaction and customer loyalty. With this being assessed, SOGO can ensure the role of their loyalty program on their customer satisfaction and their customer loyalty, whether it has positive influence or not, and avoid the huge amount of money being spent for nothing. Quantitative Survey was done using questionnaire involving 318 respondents. Partial Least Square Structural Equation Modelling was used for data analysis resulting that three benefits of loyalty programs had positively significant relationship with customer satisfaction, while only symbolic benefits had positively significant relationship with customer loyalty. Customer satisfaction significantly affects customer loyalty and symbolic benefits is the most influential relationship to customer satisfaction and customer loyalty. From this research it can be concluded that the symbolic benefits of self-image privileges, such as obtaining social status, special treatment, and social recognition are the most interesting and useful for members of the SOGO Premier Card as a loyalty program. The results of this research are expected to be an example and knowledge about the role of the loyalty program on customer satisfaction and loyalty for SOGO Department Stores, other companies in Indonesia, and for further research.