The effectiveness of loyalty schemes in increasing customer retention and profitability within the UK fast food industry --- a Subway's franchise case study.

Student, A. (2015) The effectiveness of loyalty schemes in increasing customer retention and profitability within the UK fast food industry --- a Subway's franchise case study. Undergraduate thesis, University of Chichester.

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Abstract

The dissertation explores the effectiveness of loyalty schemes within the UK fast food
industry as a means of both improving customer retention and increasing
profitability. The main method of research is primary research through 30
questionnaires completed by existing Subcard members and a separate focus group
made up of 5 participants collating general views about customer loyalty.
The findings of the research indicate that the creation of a loyalty scheme does, to
some extent, encourage participants to visit Subway more frequently. Those that are
frequent visitors are generally more satisfied with the scheme, which creates a
cyclical effect in that increased satisfaction leads to more visits. The evidence
indicating that loyalty schemes lead to increased profitability is inconclusive. The
questionnaires show no connection between loyalty card membership and increased
spend per visit. However, the fact that some customers visit on a more frequent basis
might indicate that more revenue is generated. Further analysis is required to
understand whether increased revenue translates into greater levels of profitability
taking into account the costs of running a loyalty scheme. In addition to this, although
the Subcard exemplifies how a loyalty scheme can operate in the fast food industry
the research notes that other more traditional chains such as McDonalds might not
be able to replicate this model as speed of service is a unique selling point which
might be affected if customers are asked to sign up to a loyalty scheme whilst at the
cashpoint.

Item Type: Thesis (Undergraduate)
Uncontrolled Keywords: Business
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
Divisions: Departments > Business School
Undergraduate Dissertations
Depositing User: Steve Bowman
Date Deposited: 29 Jul 2015 11:10
Last Modified: 13 Aug 2015 13:39
URI: http://eprints.chi.ac.uk/id/eprint/1453

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