Are Loyalty Schemes a Manifestation of Relationship Marketing?

Despite a shared complexity of definition, the concepts of relationship marketing (RM) and loyalty marketing have several common components : the use of information technology, customer knowledge, direct customer communications, for example. Recognising the proximity of these two concepts, Loyalty Schemes (LS) have been hailed in marketing literatureas examples of RM in action (Palmer 1994, Gilbert 1996, Gronroos 1996). To date, though, there is little evidence to verify this contention. This paper examines both concepts to analyse how, if at all, retail loyalty schemes reflect the elements of RM as detailed in the literature. The paper begins by deconstructing both RM and loyalty marketing into constituent elements described by their scope, technology and processes and continues by comparing the two. Five retail LS provide case data to add an empirical dimension to the study. Key findings suggest that future success of LS will depend on extended relationships as well as a move away from transactional intent to a greater emphasis on relational intent. There was unprompted use of much of the vocabulary of RM, (dialogue, ownership, belonging) particularly in schemes based in a restricted geographic area.