Loyalty programs as travel companions: Complementary service features across customer journey stages

Abstract

Traditionally, loyalty programs have rewarded members following their purchases. However, current versions of these programs feature extended scopes of benefits, including technology-facilitated complementary service features that span multiple purchase stages. Using a multimethod approach, this research explores the potential of loyalty programs to become meaningful “travel companions” along the customer’s journey. First, a qualitative focus group study finds the different roles of loyalty programs: purchase process facilitation (prepurchase stage), value enhancement (purchase stage), and reassurance (postpurchase stage). Then, a survey of members of a grocery retailer’s loyalty program shows the relative importance of stage-specific interactions with service features. Managers can apply these insights for designing their loyalty program to leverage its full benefits and help members co-create value with technological support.