How retailer coupons increase attitudinal loyalty – the impact of three coupon design elements

Abstract

Purpose – The aim of this paper is to investigate how different design elements of retailer coupons increase the attitudinal loyalty towards retailers. Design/methodology/approach – Three design elements are manipulated in a 2x2x2 experimental design. Data is analysed using structural equation modeling. Findings – The results demonstrate that addressing customers personally and face value have a positive impact on attitudinal loyalty. Surprisingly, the positive effect of personalization is stronger than that of typical variations in face value. In contrast, a high minimum purchase amount restriction has a negative total effect on loyalty and neutralizes the positive effects generated by personalization. The results illustrate further that personalization influences loyalty via self-reference and enjoyment independently of any cognitive evaluation of the coupon, while face value and the minimum purchase amount require at least some cognitive processing to have a loyalty impact. Research limitations/implications – Future studies can use the developed framework to test the impact of other design elements, promotion types or loyalty schemes. Practical implications – The results underline that personalization offers opportunities for increasing loyalty without the necessity of large investments. As these effects can occur without redemption, coupon promotions should not be evaluated based on redemption rates only. Originality/value – The study extends existing research by focusing on retailer coupons, analyzing the combined loyalty effects of three coupon design elements and developing a framework to analyze direct and indirect loyalty effects as well.