Investigating the impact of surprise rewards on consumer responses

Abstract

Adopting an experimental approach, this research compared surprise rewards with membership discount rewards in terms of their impact on customer responses of delight, frustration and satisfaction. In addition, this research examined the circumstances under which surprise rewards should be offered in order to yield maximum benefits for hospitality firms. In particular, the study examined how the customer's cumulative satisfaction (high vs. low) influences the effectiveness of surprise rewards (vs. membership discount rewards) in increasing customer delight and satisfaction and decreasing customer frustration. Consistent with the theoretical predictions, results show that surprise rewards are more effective than membership discount rewards for enhancing customer delight and satisfaction and attenuating customer frustration, particularly when the customer's cumulative satisfaction is low. These findings have important implications for the hospitality industry. Hospitality managers and marketers could use this information to design effective loyalty reward programs.