Man}' researchers have looked at loyalty from different angles but despite their different points of ap- proach the underlying cause of their research is to find out the real worth of customer loyalty pro- grammes. In the survey of literature done none seem to look at the use of loyalty problems by govern- ment. Most firms tie incentive schemes to profit or productivity in the wTork place. This research will therefore contribute to the use of incentive schemes by government as a loyalty programme other than the other methods used presently. The various authors as indicated have looked at various aspects in trying to solve their respective problems.
Gupta et al (2006) looked at a number of rmplementable customer lifetime value (CLV) and the fact that most service organisation get their revenue from creating and sustaining long term relationship with their customers.
O'Malley evaluated the extent to which loyalty schemes really build loyalty. In order to do this, she looked at four categories of loyalty. With much criticism given to existing loyalty schemes, it is con- cluded that such schemes have an important role to play in situations where no loyalty or little loyalty is
seen. She also concludes that where sustainable loyalty is the ultimate goal, customer loyalty schemes are of importance only as part of a coherent value proposition.
Yi & jeon (2003) investigated how reward schemes of a loyalty program influence perceived value of die program and how value perception of the loyalty program affects customer loyalty. Then- results show that involvement moderates die effects of loyalty programs on customer loyalty. In high-involvement situations, direct rewards are preferable to indirect rewards. In low-involvement situations, immediate rewards are more effective in building a program's value than delayed rewards. Under high-involvement conditions, value perception of die loyalty program influences brand loyalty both directly and indirecdy through program loyalty. Under low-involvement conditions, there is no direct effect of value percep- tion on brand loyalty.
Britain has moved with their own loyalty cards after creating a data base of all such cards. The two au- thors Worthing & Hallsworth (1999) have illustrated die breadth and scope of the card schemes.
Wright & Sparks looked at amount of loyalty programmes available for retailers and their research shows that consumers are becoming more tired of cards and schemes and are really becoming selective in their choice and use of such cards.
The building of loyalty in loyalty programmes has been questioned by Hallberg (2004); he argues that pproStable incremental sales should not be die only criterion for success for loyalty programmes. His findings from "a database of more than 600,000 consumer interviews around the world indicate that if marketers are truly committed to building brand loyalty, they must use their programmes to build consumers' emotional attachment to the brand, not just be content with repeat buying. In doing so, they will maximise and better sustain the financial success of then- programmes and may even help the brand become a category leader". Emotional attachment is important as seen to enhance the brand and make the organisation more sustainable.
The effects of a market structure on the effectiveness of loyalty programmes has been accepted even though it is found that measuring the effectiveness of a loyalty programme is difficult( Palmer et al (2000)) Terblanche (2003) has reviewed the products, services and activities that stand to benefit from relationship marketing. He remarks that service firms would normally but not always be better off using the relationship- type strategy. H e also maintains that loyalty programmes, even in their rewarding roles are limited in their ability to contribute meaningfully to relationship marketing as they are usually intro- duced with a financial motive.
23
The suitability of relationship marketing to organisations lias been researched bv (De Wulf and Oderk- erken-Schrouder (2001). Their theoiT indicates winch consumer markets are suited to relationship mar- keting.
The obligation to pay as was promoted by the Masakhane programme did not work with ratepayers (Coopoo S in W o m e n and Local Government) Coopoo's article encourages municipalities to promote local economic development so that citizens can afford to pay for municipal services.. National experi- ence with service cut-offs for non- payment was explored by Mc Donald (2002). The study revealed that aggressive cost recovery on municipal services is imposing hardships to low income earners. The study has liighlighted that the problems in municipalities are caused bv two tlnngs: 1) Inability to pay and 2) willingness to pay.
Hutchison (1997) study looked at the relationship between a properly designed loyalty programme, cus- tomer involvement levels in the product purchase and the attitudes of customers towards the attributes associated with a product or service. The results of this study indicate that there is a positive statistically significant relationship between customers who belong to a loyalty programme and their attitudes, per- ceptions and imagery of the company providing the product or sendees.
The quality of service recover}' of a loyalty system within the agricultural industry in South Africa was investigated by Louw (2002). He concluded that the appointment of the right personnel as well as suffi- cient training in communication skills is critical for a good service recovery.
In 2001/2002 Marketing Surveys and Statistical Analysis (MSSA), a consulting market research com- pany based in Pretoria, undertook a pilot study into payment strategies for low-income water consumers in the then Pretoria, Durban, Johannesburg and Cape Town Metropolitan areas. They tested the two hypotheses:
Price does have an effect on the amount of water demanded by all classes of water consumers, and Consumer's attitudes to water usage and their perception about water consumption may be changed by appropriate water payment strategies.
The findings were that most of the lower income households in the four metropoles find their accounts difficult to understand and pay their accounts by cash. The higher income groups, it was found, made use of a variety of payment options such as cash, credit card, bank transfers, etc. The recommendation on more suitable payment points that had to be provided particularly for the low income group was made. With regard to understanding water usage and the economic value of water which would aid in the implementation of payment strategies, it was recommended that an educational programme be im- plemented, and in addition each household should be encouraged to record its water usage so that a greater understanding of the value of water in South Africa (where wTater is a scarce resource) may be engendered. In formulating payment strategies it was also recommended that any help that can be given to low income consumers with respect to the cost of water should receive careful attention, for exam- ple, discounts for early payment ( Jn Vuuren & Veck, 2002)