Understanding the Impact of Loyalty Programs on Customer Retention: A Qualitative Research Methodology

Running head: RESEARCH METHODOLOGY
Research Methodology
Name of the Student
Name of the University
Author Note

RESEARCH METHODOLOGY1
Table of Contents
Introduction......................................................................................................................................2
1. Qualitative Research Methodology – An Overview................................................................3
2. Using Qualitative Research Method to Understanding the Impact of Loyalty Programs on
Customer Retention.........................................................................................................................5
2.1. Choice of Organization or Business for Study..................................................................5
2.2. Research Aims and Objectives and Research Questions..................................................6
2.3. Research Hypothesis.........................................................................................................7
2.4. Selection of Sample Population............................................................................................7
2.5. Data Collection.................................................................................................................8
2.6. Data Analysis Methods.....................................................................................................9
3. Ethical Considerations..............................................................................................................9
References......................................................................................................................................11

RESEARCH METHODOLOGY2
Introduction
Customer loyalty programs are seen to play a major role in the retention of customers for
businesses around the world. Loyalty programs are signed up for by customers who intend on
using a particular product or service offered by a specific company and over an extensive period
of time. If Pareto’s principle is anything to go by, eighty percent of the revenue of a company is
derived from loyalty programs and the remaining revenue is earned through other means
(Chaudhuri et al. 2019). Customer loyalty programs, if implemented in the desired manner, can
get customers to avail a specific service or product for a very long span of time, especially if the
rewards that are offered as a part of the loyalty program are beneficial, impactful and long lasting
for the customer. Loyalty programs are seen to be particularly beneficial for companies that
operate in the food industry and in the aviation industry. Airline companies for instance, earn a
considerable source of their revenue through the implementation of customer loyalty programs
that allow customers to procure air tickets and other travel related services at heavily discounted
prices. Food outlets like restaurants and bistros are also seen to retain customers over the long
term by offering regular deals and discounts on anything that is purchased from their menu by
customers who belong to a loyalty club or program that is offered by that restaurant (Soderlund
2019). This assignment outlines how the qualitative research design can be put to use when
understanding the impact of loyalty programs on customer retention in the context of
Australia. The assignment specifically points out the forms of qualitative data collection that are
to be utilized for obtaining answers as to why loyalty programs are of great value for customers,
as well as the means of data analysis that will be deployed to interpret and understand the data
that is collected.

RESEARCH METHODOLOGY3
1. Qualitative Research Methodology – An Overview
The best and most accurate way to assess the significant impact that loyalty programs can
have on customer retention is to make use of quantitative or qualitative research methodology for
this purpose (Maxwell 2019). Quantitative research methodology entails the use of quantifiable
variables for the purpose of arriving at answers to research questions. Quantitative research
methodology is usually considered to be far more reliable as a means of data collection than
qualitative research by most researchers as the results that are generated by such a method are
objective rather than subjective in nature, with the interpretation of the data being more or less
definite (Maxwell 2019). Yet qualitative research methods can also be utilized to arrive at the
answers to research questions that are aim at finding out how beneficial it is that customer
loyalty programs happen to be for a business, especially if it is looking to retain customers for its
products and services over the long term (Merriam and Grenier 2019). This section is going to
focus on the manner by which qualitative research methods can be put to use in order to gain an
understanding of the impact that customer loyalty programs have on customer retention for a
business.
Qualitative research methods are usually known to be of five important types. The first of
these is grounded theory, followed by ethnographic and narrative research, followed by cased
studies and finally by a theory that is known as phenomenology. The qualitative research designs
and methods of data collection are those that are implemented over a specific time span, and
takes longer to carry out than quantitative research is known to do, since it involves collecting
information in person and face to face. Grounded theory is one of the most important forms of