International Journal of Advances in Engineering and Management (IJAEM) Volume 3, Issue 10 Oct 2021, pp: 305-310www.ijaem.net ISSN: 2395-5252 DOI: 10.35629/5252-0310305310 Impact Factor value 7.429 | ISO 9001: 2008 Certified Journal Page 305 Customer Loyalty Programs on Customer Retention: Empirical Evidence from Textile Industry in Sri Lanka R.K.M Madurangi 1 , K.P.P Karunarathne 2 , S.H.M.L Walakumbura 3 1,2,3 Sabaragamuwa University of Sri Lanka, Belihuloya, Sri Lanka. --------------------------------------------------------------------------------------------------------------------------------------- Submitted: 30-09-2021 Revised: 05-10-2021 Accepted: 08-10-2021 --------------------------------------------------------------------------------------------------------------------------------------- ABSTRACT: In the present world, organizations have identified customers as the foundation of the business‟ success. In marketing, finding customers who are willing to purchase goods or services is not enough to build a successful marketing strategy. More focus should be given to retaining a customer for so long as well as attracting a customer by utilizing marketing strategies. Hence the researcher has developed this study to find the impact between different customer loyalty program strategies with the customer retention in the textile industry in Sri Lanka. Point system, gift vouchers and gift items and discounts were taken as proxies for the independent variable and customer retention has been considered as the dependent variable. The researcher used five-point likert scale questionnaire to collect primary data from retail customers of textile industry and questionnaires were given to 160 people. The researcher has used Cronbach Alpha to find the reliability and KMO and Bartlett's Test to find out the validity in the data analysis. And the researcher found that skewness value and kurtosis values were situated between -1 and +1. Therefore, the data set was normal to proceed with analysis. The researcher has used Pearson correlation matrix to identify the relationship between Customer loyalty programs and customer retention and it suggests a positive relationship between them. Furthermore, the researcher has used regression analysis to find out the impact between these variables and it also suggests a significant impact. The researcher found that gift vouchers/ gift items and discounts have significant impact on customer retention while the point system loyalty programs do not have significant impact in Sri Lankan textile market. This study is very significant for the textile retail outlets to pay serious attention to this and can make relevant and most appropriate loyalty programs for attract and retain customers. Key words: Customer loyalty, Customer retention, Loyalty, Point system I. INTRODUCTION: In the contemporary world, customers are considered as the vital element of the business success. After tracking the customer importance in all stages of the marketing process, managers pay their attention to ensure the greater customer satisfaction. By using marketing efforts, organizations should look for a way to manage customers that will identify, create and maintain satisfying relationship with their customers. Customer satisfaction is defined as a customer‟s overall evaluation of the performance of an offering to date (John-son and Fornell ,1991). This overall satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories. A customer loyalty program is a reward program offered by a company to customers who frequently make purchase. Liu (2007) explained that Loyalty Program as “a program that allows consumers to accumulate free rewards when they make repeated purchases with a firm. It is known that there is a positive relationship between customer loyalty and profitability (Magdalena 2016). Customer loyalty reflects a customer‟s willingness to buy from or work with a brand again and again, and it is the result of a positive customer experience, customer satisfaction and the value of the products or services the customer gets from the transaction. Successful loyalty programs can help convert satisfied customers to loyal customers which protects market shares over time (Vinod, 2011).