Catalogue Search | MBRL
Are you sure you want to remove the book from the shelf?
{{itemTitle}}
125,176
result(s) for
"Loyalty programs"
Sort by:
An emerging theory of loyalty program dynamics
As exemplary instruments of relationship marketing, loyalty programs are being implemented and studied at an unprecedented rate. Yet real-world efforts often fail—or at least do not live up to expectations—and despite the growing richness of loyalty program literature, the field remains fragmented. Thus, a comprehensive perspective is required. To guide further research and suggest ways that managers might improve loyalty program effectiveness, this article synthesizes insights on loyalty programs from empirical research and underlying psychological theories. The proposed conceptual model of loyalty program effectiveness consists of psychological, design, and operational elements; in turn, it suggests a set of 12 propositions that account for differential effects across customer acquisition, onboarding, expansion, and retention stages. With an evolving theory of loyalty programs across relationship dynamics, this propositional inventory parsimoniously delineates the trade-offs associated with relationship stage–based management of these programs. The proposed comprehensive foundation can guide loyalty program practice and research.
Journal Article
Consequences of customer loyalty to the loyalty program and to the company
Gaining customer loyalty is an important goal of marketing, and loyalty programs are intended to help in reaching it. Research on loyalty programs suggests that customers differentiate between loyalty to a company and loyalty to a loyalty program, yet little is known about the consequences of these two types of loyalty. Therefore, our study intends to make two main contributions: (1) improving our understanding of the constructs “program loyalty” and “company loyalty”, (2) investigating the relative impact of the two types of loyalty on preference, intention, and purchase behavior for the case of a multi-firm loyalty program. Results indicate that company loyalty influences a customer’s choice to visit a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior. Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the store, more money is spent.
Journal Article
40 years of loyalty programs: how effective are they? Generalizations from a meta-analysis
Despite firms’ extensive usage of loyalty programs (LPs) and decades-long academic research on their effectiveness, LPs’ effects on customer loyalty are still heavily debated. We perform a comprehensive meta-analysis of loyalty programs across various LP designs and industries and spanning different performance metrics to identify moderators of LP effectiveness. Based on a data set with 429 effect sizes, published or available between 1990 and 2020, we find strong evidence that LPs enhance customer loyalty. However, while LPs particularly enhance behavioral loyalty, shifting consumers’ attitudinal loyalty is more challenging. Further, LP effectiveness differs systematically depending on LP design characteristics (LP structure, reward content and delivery) and industry characteristics. These effects are enabled by both cognitive and affective drivers, acting sequentially, as underlying mechanisms. Despite a wide range of methodologies investigating LPs’ effectiveness, methodological choices have little impact on the substantive results. We develop a comprehensive research agenda and managerial implications.
Journal Article
Understanding loyalty program effectiveness: managing target and bystander effects
Loyalty programs are a ubiquitous marketing tactic, yet many of them perform poorly and the reasons for loyalty program failure remain unclear to both marketing managers and researchers. This article presents three studies—two experiments and one survey—in support of the notion that a greater understanding of loyalty program performance demands an expanded theoretical framework. Specifically, researchers and managers must account for loyalty programs’ effects on both target and bystander customers in the firm’s portfolio, the simultaneous effects of three performance-relevant mediating mechanisms (gratitude, status, unfairness), and the contingent effects of program delivery (rule clarity, reward exclusivity, reward visibility) on specific mediating linkages. The results provide insights into why and when loyalty programs fail and into the complex trade-offs managers face. Loyalty programs have opposing effects on target and bystander customers’ loyalty and sales. While rule clarity suppresses both negative bystander as well as positive target effects, reward visibility enhances both types of effects. Exclusive rewards offer a means to alleviate negative bystander effects without affecting targets. The article both conceptually and empirically establishes a comprehensive analysis framework that can help marketing managers and researchers evaluate and improve loyalty program effectiveness.
Journal Article
The Joint Sales Impact of Frequency Reward and Customer Tier Components of Loyalty Programs
We estimate the joint impact of the frequency reward and customer tier components of a loyalty program on customer behavior and resultant sales. We provide an integrated analysis of a loyalty program incorporating customers' purchase and cash-in decisions, points pressure and rewarded behavior effects, heterogeneity, and forward-looking behavior. We focus on four key research questions: (1) How important is it to combine both components in one model? (2) Does points pressure exist in the context of a two-component loyalty program? (3) How is the market segmented in its response to the combined program? (4) Do the programs complement each other in terms of the incremental sales they produce?
Our most basic message is that the frequency reward and customer tier components of loyalty programs should be modeled jointly rather than in separate models. We find strong evidence for points pressure for both the customer tier and frequency reward components using both model-based and model-free evidence. We find a two-segment solution revealing a \"service-oriented\" segment that highly values cash-ins for room upgrades and staying in \"luxury\" hotels, and a \"price-oriented\" segment that is more price sensitive and highly values the frequency reward aspects of the loyalty program. Furthermore, we find that both components generate incremental sales. Also, there was slight synergy between the programs but not a huge amount. Overall, each component contributes to increased revenues and does not interfere with the other.
Journal Article
Advancing research on loyalty programs: a future research agenda
Despite the growing literature on loyalty program (LP) research, many questions remain underexplored. Driven by advancements in information technology, marketing analytics, and consumer interface platforms (e.g., mobile devices), there have been many recent developments in LP practices around the world. They impose new challenges and create exciting opportunities for future LP research. The main objective of this paper is to identify missing links in the literature and to craft a future research agenda to advance LP research and practice. Our discussion focuses on three key areas: (1) LP designs, (2) Assessment of LP performance, and (3) Emerging trends and the impact of new technologies. We highlight several gaps in the literature and outline research opportunities in each area.
Journal Article
Separating customer heterogeneity, points pressure and rewarded behavior to assess a retail loyalty program
Analyses of loyalty programs typically show collection spikes around redemptions. A spike might be caused by increased collector spending to facilitate a redemption (points pressure). The redemption might also encourage increased spending following it (rewarded behavior). These are the program’s incentive effects. Alternatively, the spike might be unrelated to the incentives, merely revealing pre-existing customer heterogeneity, e.g., in effortless collection, in bonus points collection, and reward timing selection. Understanding the cause of collection spikes is necessary to effectively assess and design programs. Our indirect inference approach isolates the incentive effects in a coalition program that has recurring modest value cash-type rewards. Most of the collection spike is not caused by incentives, yet 1.74% of sales are incentive driven. In contrast to prior findings, the incentive effects are driven by rewarded behavior, not points pressure. We attribute this to the program’s modest cash-type rewards that are unlikely to induce conscious pursuit.
Journal Article
The effects of loyalty program introduction and design on short- and long-term sales and gross profits
Loyalty programs (LPs) are marketing investments designed to foster behavioral loyalty among a firm’s best customers and, ultimately, increase firm performance. Surprisingly, the effectiveness of introducing LPs on firm performance in the short and long term has not been thoroughly evaluated. This research examines the extent to which introducing an LP can increase both firm sales and gross profits. Leveraging data from 322 publicly-traded firms that introduced an LP between 2000 and 2015, the authors demonstrate that introducing an LP can increase sales and gross profits in the short term (within the first year), and these positive effects are sustained long term (for at least three years). However, the effects on gross profits do not become significant until the second quarter after LP introduction, and their overall impact on performance lags substantially behind sales. Complementing these primary findings, the results reveal that offering an LP with tiers or earning mechanisms can provide firms with significant increases in sales and gross profits. Taken together, this research demonstrates that introducing strategically designed LPs can dramatically increase firm performance in both the short and long term.
Journal Article