The Idiosyncratic Fit Heuristic: Effort Advantage as a Determinant of Consumer Response to Loyalty Programs

Abstract

Over the past few years, customer relationship management and loyalty programs (LPs) have been widely adopted by companies and have received a great deal of attention from marketers, consultants, and, to a lesser degree, academics. In this research, the authors examine the effect of the level of effort required to obtain an LP reward on consumers' perception of the LP's attractiveness. The authors propose that in certain conditions, increasing program requirements can enhance consumers' likelihood of joining the program, thus leading consumers to prefer a dominated option. Specifically, the authors hypothesize that consumers often evaluate LPs on the basis of their individual effort to obtain the reward relative to the relevant reference effort (e.g., the effort of typical other consumers). When consumers believe they have an effort advantage over typical others (i.e., an idiosyncratic fit with the LP), higher program requirements magnify this perception of advantage and can therefore increase the overall perceived value of the program. The authors support this proposition in a series of studies in which the perceived idiosyncratic fit was manipulated either by reducing the individual effort or by raising the reference effort. The authors' findings also indicate that (1) idiosyncratic fit considerations are elicited spontaneously, (2) idiosyncratic fit mediates the effect of effort on consumer response to LPs, and (3) an alternative account for the results based on signaling is not supported. The authors conclude that the findings are part of a broader phenomenon, which they term the “idiosyncratic fit heuristic,” whereby a key factor that affects consumers' response to marketing programs and promotional offers is the perceived relative advantage or fit with consumers' idiosyncratic conditions and preferences.