Rebuild customer loyalty lost due to covid-19

Abstract

The covid 19 pandemic has caused customers to shift their loyalties from trusted brands due to broken promises. As the effect of the pandemic is decreasing, brands are looking to find innovative ways to rebuild customer loyalty. Our primary research showed that personalized loyalty programs are making a buzz in the market, with marketers suggesting their substantial positive impact on purchase intention and customer engagement. We propose to test the same hypothesis in our research. The beauty care segment with L'oreal India is taken as the focus company for our research. Three hypotheses are developed to check how the personalized loyalty programs affect the subscription intention and customer engagement, both of which are used as a proxy for customer loyalty. These hypotheses are tested using surveys, experiments, projective and statistical techniques to derive managerial implications. The Qualtrics platform is used to create a standard questionnaire containing survey and experiment, randomly showing the treatment and control conditions. The questionnaire was circulated among IIM Bangalore students, self-employed business owners, working professionals, and homemakers. The demographic profile is designed basis employment, income, and location. The survey data is analyzed to find out the demographic profiling of the respondents. The experimental data is used to run univariate ANOVA analysis to test all three hypotheses. The analysis showed that both the direct hypothesis that the personalized loyalty programs lead to greater subscription intention, and the mediating hypothesis that the personalized loyalty programs lead to greater customer engagement are true. However, the moderating hypothesis that the personalized loyalty programs affect females more compared to males is disproved. The research suggests that the brands must focus on delivering personalized loyalty programs to increase customer engagement and loyalty. Also, as the experiment is carried out in a homogenous group and for hedonic products in the beauty care segment, a more extensive experiment with diverse customer segments and utilitarian products might yield different results.