Retention effects of a customer club

Customer clubs belong to the most important and particularly cost-intensive elements of customer retention systems. By offering specific advantages to club members, they are supposed to increase customer satisfaction and loyalty. However, up to now there is no certainty with respect to the existence and degree of the expected loyalty effects. Thus, there still is also no sufficient foundation for an estimation whether investments in customer clubs can be justified in comparison to several alternatives of gaining new customers or customer retention. To fill this gap in information. this paper focuses on the question of which kind of retention effects of customer clubs might exist and whether there is a scientific evidence of these effects. In the first step, a theoretical model and Propositions of different retention effects of customer clubs are developed. Afterwards the results of an empirical study among members of the Volkswagen Customer Club. Germany's largest automotive customer club are presented. They indicate that customer club satisfaction has a remarkable impact on the customer's relationship satisfaction and customer retention. Consequently it can be concluded that a customer club certainty is an important issue of retention management.