The Effectiveness of the Personalized Price Promotion Mechanics to Increase Customer Loyalty in Retail

The paper examines the impact of such price promo parameters as the depth of the discount, the number of points awarded in the loyalty program, as well as the duration of the promo offer on two types of customer loyalty. To measure the nature of changes in behavioral loyalty under the influence of promotional mechanics, a series of experiments was implemented at the first stage of the empirical study; at the second stage, using the survey method, the most effective promotional offers were identified, positively evaluated by customers according to indicators of attitudinal loyalty. It was revealed that the average total value is not subject to increase with a positive change in all tested promo parameters. An increase in the depth of the discount and the number of points awarded has a positive effect on the indicators of behavioral loyalty, and a change in the duration of the promo affects the attitudinal loyalty. The results obtained from the study can be applied in the practical activities of retailers both for the concept of management decisions in order to increase the loyalty of regular customers, and to optimize the cost of personalized promotions.