Effectiveness Of Loyalty Programs Research Articles

Casino Loyalty: The Influence of Loyalty Program, Switching Costs, and Trust

Customer loyalty has become a strategic goal to increase brand value and profitability. This study develops and tests a model of loyalty to understand the relative effects of loyalty program benefits (as positive barriers) and switching costs (as negative barriers) on emotional commitment and loyalty behaviors in the casino context. The findings showed that trust, perceived switching cost, and emotional commitment to the casino are more likely to influence relational or emotional outcomes such as word of mouth and voluntary partnership whereas the loyalty program is more likely to influence transactional outcomes such as repeat visitation and time spent in the casino. The emotional commitment served as a partial mediator in the model. The study has theoretical implications for understanding the loyalty process and practical implications for improving loyalty program effectiveness.

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.

Customer–company identification and the effectiveness of loyalty programs

Customer loyalty programs constitute an important customer relationship management tool, adopted by multiple industries. This study investigates how customers perceive benefits from a loyalty program that enhance their loyalty to that program directly, as well as to the company indirectly through program loyalty. Our findings show that program loyalty and customer–company identification enhance customer loyalty toward the company. The development of customer–company identification can transform program loyalty into company loyalty, and reduce the company's latent financial risk.

The influence of customer loyalty program design on the relationship between customer motives and value perception

Despite the strong use in marketing practice, the effectiveness of loyalty programs is still heavily questioned among researchers. In our study we present an empirically tested framework that views customer loyalty programs (CLPs) with their differing designs as a moderating tool in a means-end relationship between customer motives and value. By disentangling customer value perceptions of loyalty programs we contribute to the remaining question of the efficacy of CLPs and set the road for further research. Our results support the argument that CLPs can be an effective tool and are not only something that adds to the value of a product or service, but rather creates value by itself. However, this is only the case for programs that target prevailing customer motives and hence provide a higher level of perceived value.

Where is the love?

Purpose– The purpose of this study is to explore polygamous program loyalty in hotel loyalty programs and the relationship between members’ behavioral loyalty and their perceptions of the program effectiveness.Design/methodology/approach– Descriptive statistics, discriminant analysis, ordinary least square regression and one-way ANOVA methods.Findings– This study suggests that the flexibility to purchase points in a loyalty program is significantly associated with the polygamous program loyalty. Members will stay in only one program if they perceive such flexibility. Although members tend to emphasize purchasing accommodation from the loyalty programs’ hotels, they do not necessarily advocate or pay price premiums for the brand. Compared with basic members, elite members exhibit higher levels of loyalty behaviors in general, but not in terms of paying price premiums.Research limitations/implications– The results suggest that how customers value a loyalty program can differentiate the number of membership(s) they have. Increasing the flexibility of point purchase in hotel loyalty programs encourages customers to stay in only one program. With a majority of the participants in the study being senior travelers, the results and implications should be generalized only in the senior market. A larger and more diverse sample is recommended for future research.Practical implications– If loyalty programs seek to keep members from joining other loyalty programs, they should increase members’ likelihood to achieve their expected benefits such as increased flexibility of point purchase. In addition, loyalty programs should encourage, recognize and incentivize members’ reciprocal behaviors based on the norm of reciprocity to build a reciprocal chain in loyalty programs. However, in seeking sustained loyal behavior, loyalty programs need to demonstrate value beyond transactional rewards.Originality/value– This paper explores the reason why customers join multiple loyalty programs (i.e. polygamous program loyalty) and identifies a broken reciprocity link in hotel loyalty programs. Many members primarily focus on the utilities of loyalty programs rather than contributing back to the program; therefore, the norm of reciprocity is suggested to improve loyalty program effectiveness.

충성도 프로그램이 관계품질과 재방문의도에 미치는 영향 - 레스토랑 유형의 조절효과를 중심으로 -

The purpose of this study was to understand the effect of loyalty program in family and fastfood restaurant on relationship quality (trust, commitment) and revisit intention. Based on total 394 samples obtained from empirical research, this study reviewed the reliability and fitness of a research model using the Amos program. The hypothesized relationships in the model were simultaneously tested using a structural equation model (SEM). The proposed model provided an adequate fit to the data, <TEX>${\chi}^2$</TEX> 102.338 (df 48), GFI .959, RMR .049, NFI .970, CFI .984 SEM resulted that loyalty progam (<TEX>${\beta}$</TEX>= .429, t=7.880, p< .001) showed a positive significant effect on trust, and that loyalty program (<TEX>${\beta}$</TEX>= .455, t=9.532, p< .001) had a positive significant effect on commitment. Also, both trust (<TEX>${\beta}$</TEX>= .450, t=6.595, p< .001) and commitment (<TEX>${\beta}$</TEX>= .474, t=5.117, p< .001) had a positive significant effect on revisit intention. In addition, there were moderating effects related to restaurant type (family and fastfood restaurant) in terms of causal relationships between loyalty program, relationship quality and revisit intention. Limitations and future research directions are also discussed.

통합 로열티 프로그램의 학습효과: OK캐쉬백 장기 패널자료를 이용한 실증 연구

Using long-term panel data of OKCashbag, this study analyzes whether learning effect influencing in effectiveness of coalition loyalty program exists. We found that there is learning effect in the behavior of loyalty program customers, and discovered that learning effect appears more greatly in using (redeeming) behavior than accumulating behavior. The authors also found a long-lasting structural changes in the pattern of point redemption after a major marketing activities associated with the act of using points. The results of this research can contribute to suggest direction to the future researches to examine differences of learning effect according to demographic (gender, age, region, ect.) and transactional (frequency or scale in point accumulation and redemption etc.) characteristics.

Reaction of customers against loyalty programs: Case study of Mahan Airline

Nowadays so many researches about the effect of loyalty programs on customer satisfaction and loyalty, however these kinds of programs have another aspect and that is the customers' negative response and reaction against implementation of such programs. Since customer’s reaction may reduce their loyalty against the company, so in order to achieve the goals of the organization, which one of them is to keep the customer, customer response consideration would be justified. Therefore in this research, high trips customers’ reaction of Mahan Airline versus loyalty programs applied by the company was studied in three dimensions; social-mental relationships, financial and contractual relations. The aim of this study which has considered the frequent flyers of Mahan Airline as the statistical community is of a practical kind. The main tool used in this study was questionnaires and the information about literature and history has been collected through Internet websites and libraries. The relationship among variables has been studied through correlation test. Based on the research model, it can be asserted that there is a direct relationship between independent and dependent variables. Key words: Relational marketing, loyalty programs, frequent flyers of Mahan Airline, reaction.

Consumer evaluation of customer loyalty programs: the role of customization in customer loyalty program involvement

This study investigates the role of customizing the offerings (rewards and services) of a customer loyalty program in consumers' responses regarding perceived value (cash value and emotional value), satisfaction with the loyalty program, and loyalty intention toward the focal retailer. It also examines the moderating role that customer loyalty program involvement may play in value–satisfaction–loyalty associations. Data were collected from 174 college students using a web-based survey. Results yield overall support for the model in which customization of a loyalty program influences perceived cash value of the loyalty program, which in turn influences perceived emotional value, satisfaction with the loyalty program, and loyalty toward the retailer. Additionally, consumer involvement in customer loyalty programs moderates the effectiveness of customer loyalty programs by differentiating the degrees to which perceived emotional value and satisfaction influence loyalty intention.

Do Consumption Goals Matter? The Effects of Online Loyalty Programs in the Satisfaction‐Loyalty Relation

ABSTRACTThis study investigates the effects of online loyalty programs in the customer satisfaction‐loyalty relationship. It is proposed that loyalty programs may induce loyalty toward programs (program loyalty), which may then influence loyalty toward stores (store loyalty). According to the results of a two‐wave survey, consumption goals matter in the effects of program loyalty on online store loyalty. For consumers with hedonic goals, hedonic program loyalty (e.g., free gifts) has a significant effect on online loyalty. For consumers with utilitarian goals, however, utilitarian program loyalty (e.g., coupons) has a significant influence on online loyalty. Theoretical and managerial implications are also discussed.

Effect of consumer relationship proneness on perceived loyalty program attributes and resistance to change

PurposeThe purpose of this study is to examine the interrelationships among consumer relationship proneness (CRP), three perceived loyalty program attributes (i.e. perceived complexity, advantage, and risk), and resistance to change with participants in apparel retailer's loyalty programs.Design/methodology/approachData were collected using an online survey with the assistance of a marketing research company. Participants were 294 members of apparel retailers' loyalty programs. Participants indicated one apparel retailer's loyalty program in which they took part. After that, they completed a questionnaire making reference to the program they had identified. To reduce measurement artifacts, dependent variables were assessed prior to their predictors.FindingsCRP was found to have a significant effect on perceived advantage and resistance to change. In turn, perceived advantage revealed a significant positive effect on resistance to change. The results not only verify theoretical conceptions regarding CRP and its effect on perceived loyalty program attributes and resistance to change, but also provide insights into the implementation and development of apparel retail loyalty programs as well as customer relationship management.Originality/valueThe contributions of the research are twofold. First, it critically examines CRP with loyalty program members fulfilling an identified gap in the literature and testing CRP as a critical factor to the effectiveness of loyalty programs. Second, on a managerial level, it generates beneficial insight for apparel retailers to fine‐tune their loyalty programs.

The effects of loyalty programs on customer loyalty: The mediating role of customer value and the moderating role of relationship benefits

Since the prevalence of loyalty programs worldwide, one of the urgent issues in retailing is whether loyalty programs really enhance customer loyalty. This paper proposes a conceptual framework that utilizes the construct of customer value to explain the link between loyalty programs and customer loyalty in retail context. Based on 450 respondents from members of several large department stores, the results posit that loyalty programs have indirect positive impact on behavioral loyalty, affective loyalty via utilitarian value, hedonic value. This mediating progress is moderated by relationship benefits derived from the long-term relationship between retailers and their customers. The results also show that the role of utilitarian value playing in promoting customer loyalty is more significant, which has certain reference for retailers to design effective loyalty programs. Key words: Loyalty programs, customer value, relationship benefits, customer loyalty.

What price loyalty? A fresh look at loyalty programs in the credit card industry

There is controversy about the effects of loyalty programs in the customer relationship management literature. Although some managers and researchers believe that customer loyalty created through loyalty programs leads to higher firm profits, others have found evidence that loyalty programs do not have a positive effect on firm's profits. In this article, we present our findings regarding the effect of reward cards and affinity cards on customer profitability in the context of credit card industry. We find surprising evidence that customers who own either a reward card or an affinity card generate significantly less profit than those customers who do not have these cards. Equally puzzling is the fact that these customers also have lower average lifetime with the firm. This leads us to a puzzle as to why these practices are widely prevalent in the industry. We find that loyalty cards provide value to the issuers in terms of risk management. They serve as a mechanism to reduce the risk associated with more profitable customers by attracting less risky customers. Thus, through loyalty cards the financial institution is able to balance out the total risk of the portfolio of customers by acquiring customers, who although less profitable, are less risky.

Loyalty Programs Effectiveness

Loyalty Programs EffectivenessAn increasing number of loyalty programs is one of the most common phenomena observed in the practice of marketing companies on the market today. Objectives and tasks of loyalty programs determine the type of use of marketing instruments affecting the attitudes and behaviours of customers, which is aimed at the program. The diversity of factors influencing the effectiveness of loyalty programs should set the scope and object of empirical research. As the results of studies to evaluate the effectiveness of loyalty programs mainly on the B2C market is diverse in terms of the criteria. This article presents the essence of loyalty programs and the factors influencing their effectiveness.

백화점의 로열티 프로그램이 소비자의 관계품질 및 관계지속의도에 미치는 영향

This study analyzes the effects of department store loyalty programs on consumer relationship quality and the effects of consumer relationship quality on relationship continuity intention in department stores. The survey was conducted on women consumer patrons of department stores in October 2009; 381 responses were used in the data analysis. The statistical analysis methods were frequency analysis, factor analysis, reliability analysis, and multiple regression analysis. As a result, the loyalty programs of department stores were classified by the conformity, shared values, benefit of use, psychological availability, and convenience. The relationship quality of consumers was classified by trust and satisfaction, and the relationship continuity intention of consumers was classified by the continual use intention and word of mouth intention in department stores. The conformity, psychological availability, and convenience of loyalty program influenced the trust of consumers; in addition, the psychological availability influenced the satisfaction of consumers in department stores. The trust and satisfaction of consumers influenced the continual use intention and the satisfaction of consumers influenced the word of mouth intention in department stores.

The Drivers of Loyalty Program Success

Despite the proliferation of loyalty programs over the past three decades, evidence regarding their effectiveness in cementing customer loyalty remains mixed and often inconsistent. The current lack of understanding of what factors drive a successful loyalty program represents an important knowledge gap. Accordingly, this review (1) organizes current thinking on loyalty program management and (2) outlines an agenda for future research. This review is organized around three categories of drivers that affect loyalty program effectiveness: program structure, reward structure, and customer factors. In synthesizing this body of research, this review identifies important research questions that offer opportunities for hospitality managers and academic researchers to collaborate on a mutually beneficial topic that has both theoretical and practical importance.

패션업체 고객 충성도 구축을 위한 로열티 프로그램

The purposes of this study were to provide the apparel companies with a effective marketing strategy by identifying the present condition of loyalty programs and designing the type of reward and the timing of reward, and to investigate the effects of loyalty programs on customers' satisfaction and loyalty. The experimental study was conducted to examine the relationship between loyalty programs and performances. The experiment, which adopted a scenario methodology, was a 2(type of rewards)<TEX>${\times}$</TEX>2(timing of rewards) between subjects factorial design. The sample was based on 362 college students. The data analysis was completed on the basis of SPSS 12.0 package, using descriptive analysis, frequency, factor analysis, Cronbach's a, ANOVA, and regression analysis. The following results were found in this research. First the respondent's recognition of reward(benefit, reserve fund, experience) was not relatively high. Second, the interaction effect of type of rewards and timing of rewards on the loyalty programs' satisfaction(p<.01) and customer loyalty(p<.001) was significant, but that on customer satisfaction was not significant. Finally, loyalty programs' satisfaction positively affected customer satisfaction and loyalty. The implications of the research and directions for future researchers were discussed.

Les cartes de fidélité fidélisent-elles la clientèle ?

Loyalty cards and loyalty programs are part of the everyday life of almost any consumer. These cards are for retailers and other companies a mean for retaining their customers. Customers are rewarded for their loyalty and are thus expected to stay with the company. However, the true meaning of “loyalty” and the way it can be measured are still open issues. In addition, many scholars question the effectiveness of loyalty cards and programs. In a highly competitive world, where margins are constantly under pressure, the economic benefit for the company of such programs remains topical. This article provides a discussion about these issues based upon a state-of-the-art of the most recent scientific studies on the topic.

Which retailers adopt a loyalty program? An empirical study

This paper examines antecedents of retailers’ loyalty program adoption and their perceptions regarding loyalty program effectiveness. The investigated antecedents consists of sector, competitive and demand, and firm characteristics. To test the hypotheses, we surveyed 180 retail companies active in 15 retail sectors, 37% of which have a loyalty program. The survey data are complemented with expert judgements on sector characteristics. We estimate multi-level models for both loyalty program adoption and perceived effectiveness (tobit-2 specification). We find that the sector characteristics assortment homogeneity and average purchase frequency stimulate loyalty program adoption considerably. Further, customer-oriented firms are most likely to adopt loyalty programs. Contrary to loyalty program adoption, the effectiveness of a loyalty program in terms of additional customer knowledge and customer loyalty is hardly affected by market and organizational factors. But it appears that retail companies should better take into account their technological skills necessary for obtaining useful information from the customer loyalty program data.

The effects of loyalty programs on customer lifetime duration and share of wallet

In the retailing sector, consumers typically patronize multiple outlets, which confronts these outlets with an important issue: determining how to gain a greater part of consumer expenditures. One potential avenue is to increase consumer lifetime duration and repeat purchases through loyalty cards. This research, using BehaviorScan single-source panel data, examines the impact of loyalty programs on customer lifetime duration in grocery stores. The findings suggest that loyalty schemes have positive effects on customer lifetimes and share of consumer expenditures. However, multiple loyalty card memberships of geographically close retailers reduce lifetime duration. Furthermore, the higher the share of consumer expenditures in a store, the longer the lifetime duration will be.