Customer Loyalty Programs and their Effects on Customer Experience in the B2C Retail Sector in Finland

Abstract

This thesis investigates the impact of customer loyalty programs (CLPs) hon customer satisfaction, loyalty, and experience in the B2C retail market of Finland. Chapter 1 (Introduction) provides a background on the development of the evolution of loyalty programs since the early days of the era of paper-based systems, to a complex, computer-based system. It states the purpose, aim, and problem of the research: to analyze the impact of loyalty programs on consumer behavior and increase customer loyalty in the long term. The research methodology, data collection process, and data analysis used to assess responses from Finnish retail customers are also presented in the chapter. Chapter 2 (Literature Review) synthesizes existing research on loyalty programs, with emphasis on their contributions to engagement, repeat purchases, and brand commitment. Kesko K-Plussa program is taken as an example; its practical implementation, efficiency, and challenges are described, as are the topicality of rewards, the lack of personalization, and privacy concerns. The research surveyed 100 Finnish retail clients between July and August 2025, out of which 88 responses were valid. The comparison was done on the influence of the CLP dimensions- consumer perception of rewards, personalization, program involvement, consumer trust, and the impact of customer experience (CX) on consumer perception and outcome of consumer loyalty. The findings indicate that, despite the highly valued and enhancing qualities of tangible rewards, the individualization, affection, and perceived fairness are exacerbated. The results indicate that the relationship between the loyalty program design and customer satisfaction, competence, relatedness, and autonomy is an influential variable. In general, CLPs help achieve moderate to high levels of customer loyalty, whereas greater personalization, emotional involvement, and ethical data handling are needed to ensure the full potential is realized. The paper concludes with recommendations, implications, and directions for future research to B2C retailers in Finland, and recommendations on better designing a loyalty program, improving customer experience, and achieving long-term customer loyalty.