THE IMPACT OF DIGITAL LOYALTY PROGRAMS (E-LP) ON CUSTOMER RETENTION IN AGRI-FOOD SMEs: CASE STUDY OF PROJECT 1275 (FIDIALY)

Abstract

This thesis investigates the extent to which digital loyalty programmes (E-LPs), delivered through a contextually adapted SaaS platform, can improve customer retention within Algerian agri-food SMEs. The research problem stems from a structural contradiction: a digitally connected consumer base coexists with merchants relying on analogue, memory-based management, a gap attributed to the absence of an accessible SaaS solution calibrated to SME budgetary constraints. Adopting a mixed-method design, the study combines a literature review of relationship marketing, CRM, and retention metrics (churn, CLV, RFM) with an entrepreneurial case study of the Fidialy project, structured around the Lean Startup methodology and a five-year financial plan. Empirical validation rests on fifty merchant interviews and a 215-respondent consumer survey. Findings show that 78% of merchants still operate analogically and 90% rely on informal recognition, while 70.7% of consumers express definite intent to adopt a unified digital loyalty wallet despite near-total current non-adoption. Financially, a zero-cost MVP strategy generates a Year-1 ROI of 339.3%, a payback period of about 3.5 months, and revenue growth of 189-fold over five years against only a 250-fold rise in variable costs, evidencing structural hyperscalability. The study concludes that digital loyalty platforms can substantially improve SME retention outcomes provided their design is adapted to capital scarcity and cash-dominant transaction culture, positioning Fidialy as a viable catalyst for retail digital transformation in Algeria