Loyalty Program Members Research Articles

Predicting Customer Purchase Behavior Using Machine Learning Models

In this study, we aim to predict customer purchase behavior using various machine learning models to better understand customer tendencies and enhance marketing strategies. We use a dataset containing demographic and behavioral data, including age, gender, annual income, number of purchases, product category, time spent on the website, loyalty program membership, and discounts availed. Our analysis involves data preprocessing, exploratory data analysis (EDA), and feature engineering. We then train and evaluate six different machine learning models: Logistic Regression, Random Forest, Gradient Boosting, Support Vector Machine (SVM), K-Nearest Neighbors (KNN), and XGBoost. The models are assessed using metrics such as accuracy, precision, recall, F1-score, and ROC AUC. Results indicate that ensemble models, specifically Random Forest and Gradient Boosting, outperform the other models in terms of accuracy and ROC AUC. The study concludes that ensemble models are highly effective for predicting customer purchase behavior, providing valuable insights for businesses to tailor their marketing efforts. Future research could explore additional features, more advanced models, and real-time prediction capabilities.

Quantifying the short- and long-term effects of promotional incentives in a loyalty program: Evidence from birthday rewards in a large retail company

Nowadays, many retail companies implement their original loyalty programs to stimulate the willingness of their customers to make a purchase. In these programs, promotional incentives are often incorporated to further enhance customer loyalty; however, few previous studies have assessed the effectiveness of such incentives. Therefore, our study examined both short- and long-term effects of promotional incentives in a loyalty program on customer purchase behavior by analyzing a loyalty program using birthday rewards implemented by a major retail company in Japan. For the analysis, we used the Weibull proportional hazards model, generalized linear model, and Pareto/NBD & gamma-gamma framework after implementing propensity score matching. The estimation results indicated that promotional incentives in a loyalty program temporarily weaken the points pressure effect on the purchase frequency. In addition, promotional incentives in a loyalty program had no positive effect of increasing the customer lifetime value. Furthermore, our study revealed that the lifetime values of loyalty program members who do not exhibit their active purchasing behavior for a certain period of time after impulsive actions induced by promotional incentives are particularly low. These findings will help companies to decide how promotional incentives should be incorporated into their loyalty programs.

An Analysis of the Influence of Customer Participation in Airline Loyalty Programs: A Multi-Group Examination

Loyalty programs have long been seen as a critical factor in the success of many businesses. While there has been extensive research into the benefits, satisfaction, perceived functional value, and loyalty associated with LPs, few studies have sought to compare these results across different consumer groups. This study aims to examine how user involvement levels relate to airline loyalty programs. The survey collected 429 responses from individual members of airline loyalty programs, using multi-group analysis with Partial Least Squares Structural Equation Modeling. The findings indicate that satisfaction and perceived value mediate the relationship, while consumer involvement moderates it. A distinction was found between the two consumer groups regarding hedonic benefits, satisfaction, and loyalty. This research makes a valuable contribution to the airline industry by emphasizing the importance of loyalty program benefits and highlighting consumers' role in these programs. Furthermore, it offers practical insights for future research endeavors

Does Loyalty Program Membership Lead to Repeat Purchase: A Demographic Analysis with Customer Profiling and Machine Learning

Does Loyalty Program Membership Lead to Repeat Purchase: A Demographic Analysis with Customer Profiling and Machine Learning

The theory-practice research gains from big data: evidence from hospitality loyalty programs

PurposeThe hospitality industry values segmentation and loyalty programs (LPs), but there is limited research on new methods for segmenting loyalty program members, so managers often rely on conventional techniques. This study aims to use big data-driven segmentation methods to cluster customers and provide a new solution for customer segmentation in hotel LPs.Design/methodology/approachUsing the k-means algorithm, this study examined 498,655 profiles of guests enrolled in a multinational hotel chain’s loyalty program. The objective was to cluster guests according to their consumption behavior and monetary value and compare data-driven segments based on brand preferences, demographic data and monetary value with loyalty program tiers.FindingsThis study shows that current tier-based LPs lack features to improve customer segmentation, and some high-tier members generate less revenue than low-tier members. Therefore, more attention should be given to truly valuable customers.Practical implicationsHotels can segment LP members to develop targeted campaigns and uncover new insights. This will help to transform LPs to make them more valuable and profitable and use differentiated rewards and strategies.Originality/valueAs not all guests or hotel brands benefit equally from LPs, additional segmentation is required to suit varying guest behaviors. Hotel managers can use data mining techniques to develop more efficient and valuable LPs with personalized strategies and rewards.

Is Gamification Important for Service Systems Non-Users? A Study on Airline Loyalty Programs

Increasing use of social communication networks and mobile technology have caused the airline-passenger relationship to shift from traditional methods to more modern and technological infrastructure processes. The airline loyalty programs provide that permit more focused marketing, tailored services, and more accessibility for both members and non-members. Consumers are motivated by prizes, competition, and social engagement in gamified loyalty programmes. Gamification, which is effective in improving the results of innovation practices and their acceptance by consumers, plays an active role in this interaction. In this direction, the study aims to reveal the factors that affect the service system non-users behavioral intentions based on airline loyalty programs and its relationship between social influence, consumer innovativeness, and gamification. The research data were collected from air passengers who use air transportation at least once time and have no loyalty program membership. Data obtained from passengers were analyzed using the PLS-SEM model. The findings show that gamification processes will improve the participation process of new passengers, and in this direction, new consumer profiles can be added to the portfolio of service systems. In addition, it has revealed that gamification and social influence are effective on behavioral intention and gamification has a mediating role in the relationship between consumer innovativeness and behavioral intention.

Attributes of loyalty card programme membership and their influence on customers’ behavioural and attitudinal loyalty: a case of fashion retailing in the Sri Lankan context

Purpose: Loyalty card programmes are commonly used by fashion retailers with the intention of building customer loyalty and increasing the efficiency and effectiveness of company financial performance. The purpose of this paper is to study whether customer loyalty depends on the loyalty membership, number of loyalty cards and gender. These questions remained unanswered as the past studies showed mixed results and even very few studies have been carried out in Sri Lanka on this topic. 
 Design/methodology/approach: The study critically analyses the influence of loyalty card programs under three aspects; the loyalty program membership, the number of loyalty cards available, and the gender of the cardholders to find out if there is any loyalty difference between male and female customers. 250 fashion retail customers within the Western Province of Sri Lanka were conveniently selected for the sample. All hypotheses were tested using an independent sample t- test. 
 Findings: The findings show that a loyalty difference exists between the customer being a member of a loyalty card programme and a non-member whereas no difference is shown in terms of the number of cards a customer holds and the customer’s gender. 
 Originality: The study fills the existing gaps of knowledge and arrives at a proper conclusion on the influence of loyalty card programme membership on both behavioural and attitudinal loyalty in fashion retailing in the South Asian context whereas the majority of the studies have focused on grocery retailing (Liu, 2007and influence on behavioural loyalty aspect only (Ha, 2007).
 Implications: The loyalty programmes can be identified as a means of building customer loyalty. It brings other benefits for retailers such as providing opportunities for personalization and aiding in decision-making encouraging to invest on such programmes. While the present study fills the gap of knowledge regarding the attributes of loyalty programs and gender to some extent it still offers a lot of potential for future research.

The customer-brand relationship in the gambling industry: positive play predicts attitudinal and behavioral loyalty

ABSTRACT This research draws on the model of positive play (i.e. responsible gambling) to investigate whether positive play beliefs (e.g. accurate understanding about the odds of success on games of chance) and behavior (e.g. setting a limit on gambling expenditures) are associated with attitudinal loyalty and behavioral loyalty. Results from Study 1 indicated that among American casino loyalty program members (N = 188), positive play was predictive of attitudinal loyalty when controlling for disordered gambling symptomatology. In Study 2, using survey and player-account data from 383 members of a Canadian casino loyalty program, we found that positive play was negatively associated with behavioral loyalty, but that this association was eliminated after accounting for disordered gambling symptomatology. These results suggest that fostering positive play may help increase positive perceptions of a casino and its loyalty program without undermining the amount of money a player spends at that casino.

Brand-generated social media content and its differential impact on loyalty program members

Brand-generated social media content and its differential impact on loyalty program members

Examining Responsible Gambling Program Awareness and Engagement Trends and Relationships with Gambling Beliefs and Behaviors: A Three-Wave Study of Customers from a Major Gambling Operator.

A considerable body of literature has examined elements of responsible gambling (RG) programs in land-based gambling venues. The present pre-registered study examines GameSense RG program awareness and engagement trends and relationships with gambling beliefs and behaviors, at MGM’s U.S.-based casino properties using three samples of MGM’s loyalty program members. We used a repeated cross-sectional approach including observational data collected from one sample (N = 3748) shortly before the rollout of GameSense in 2017–2018, and from two samples collected 1 year (N = 4795) and 2 years (N = 3927) after the program’s implementation. We found that awareness of the GameSense program increased between pre- and 1-year post-implementation, yet did not increase further at 2-years post-implementation. Bivariate analyses showed that respondents who were aware of more GameSense components had a better understanding of gambling concepts and used more RG strategies, whereas respondents who engaged with GameSense used more RG strategies than those who did not, but did not display a better understanding of gambling concepts. The relationship between GameSense awareness and self-reported use of RG strategies remained significant in multivariate analyses with covariates. Moderation analyses indicated that a positive effect of overall GameSense engagement on gambling literacy was only found for respondents who had attended a regional property, as compared to respondents who attended Las Vegas or metropolitan properties. All effect sizes were weak, which suggests that practical impacts of the program currently are limited. Our findings have implications for research on land-based RG programs and we provide recommendations for enhancing such programs.Supplementary InformationThe online version contains supplementary material available at 10.1007/s10899-022-10109-7.

The dynamic customer engagement behaviors in the customer satisfaction survey

Conducting customer satisfaction surveys (CSS) as a means of encouraging customers' engagement with a firm is a widely used managerial practice. In an effort to convert this customer-to-firm engagement into customer-to-customer engagement, many firms have recently started to ask customers who reach the final question of the CSS to write an online review that will be automatically posted on a review site (e.g., Google or TripAdvisor). Using a unique longitudinal data set provided by a large global hotel chain, we aim to understand the drivers behind CSS participation and, ultimately, behind online review posting in response to a prompt at the end of a survey. We employ the Hidden Markov model (HMM) to analyze how a customer's engagement state changes as a function of previous managerial responses, loyalty program membership, and satisfaction. The results reveal that customers have a greater tendency to transfer to higher engagement states if managers have responded to prior customer surveys. We have also found that the higher the customer's loyalty program membership status is, the more likely it is that they will participate in a survey. Lastly, we show that customers have a greater tendency to post negative versus positive reviews. We then discuss the implications of this study for researchers and managers.

Let's Give Them Something to Talk About: Which Social Media Engagements Predict Purchase Frequency?

Although marketers spend billions of dollars on social media platforms in an effort to make a connection with their customers, few know if their social media activation in the form of Social Network Advertising (SNA) is positively affecting their business. For example, little research exists as to which types of Digital Consumer Engagement (DCE) (if any) are associated with purchase frequency. Advancing a theoretical framework of social media engagement, the authors test the association between various forms of DCE and customer behavior using archived field data. By matching store visit data from 1,066 loyalty program members of a leading national fast casual restaurant with their engagements on the brand's Facebook page, the authors are able to compare the strength of the relationships between various forms of engagement and store visit frequency. Results reveal that some Facebook engagements are significantly associated with increased or decreased store visits while others exhibit no discernible effects. Empirical support is provided for a proposed hierarchy of DCE, with engagements perceived as reflecting strong DCE being more strongly associated with purchase frequency than those with moderate or weak DCE.

Customer happiness as a function of perceived loyalty program benefits - A quantile regression approach

Customers consider pursuit of happiness to be fundamental to their purchase experiences; thus, companies are increasingly looking for opportunities to bring happiness to customers especially in their consumption activity. The current study undertakes analysis of effect of perceived benefits of loyalty programs and customer satisfaction on customer happiness/purchase enjoyment if he/she has loyalty program membership. Empirical study with 407 participants found that Discovery and Entertainment Benefit (DEB) and Satisfaction Derived (SD) have an effect on customer happiness/purchase enjoyment while being a loyalty program member. Quantile regression analysis was used to analyze if independent variables have a differential effect on different levels of the dependent variable i.e. customer happiness/purchase enjoyment from use of loyalty programs. Since DEB and SD were found to be positively significant in influencing customer happiness/purchase enjoyment, companies should focus on balancing these aspects of customers’ consumption experience.

Loyalty program and communication effectiveness as drivers of store loyalty

PurposeThe purpose of this study is to determine the direct effect of a loyalty program on program loyalty and store loyalty and to determine the role of communication effectiveness as a mediating variable in moving customers from program loyalty to store loyalty in the context of micro, small and medium enterprises (MSMEs).Design/methodology/approachRespondents of this study were 100 customers of the MSMEs that sell Batik products in Cirebon, Indonesia who were selected by the purposive sampling method. This study focuses on primary data collected through a structured questionnaire. Data were analyzed using SmartPLS 3.0 to determine the causality relationship between variables and to test the communication effectiveness as a mediating variable.FindingsThe results of this study indicate that the loyalty program has a significant effect on program loyalty; program loyalty has a significant effect on store loyalty and communication effectiveness, and communication effectiveness has a significant effect on store loyalty. Other results indicate that communication effectiveness partially mediates the relationship between program loyalty and store loyalty.Research limitations/implicationsDespite the significant implications, this study has four limitations. First, the research results cannot conclude the store in general because the sampling of this study is limited to MSMEs only. Future research is needed to explore more deeply to compare store loyalty to MSMEs and non-MSMEs. Second, this research is only aimed at MSMEs that have loyalty programs. Future research can be carried out by comparing MSMEs that have loyalty programs and MSMEs without loyalty programs. Third, this study only uses two independent variables and one mediating variable. As is well known, there are many other variables that are antecedents of store loyalty. Future research needs to be done to explore the effect of other variables (mediating and moderating) on store loyalty, such as service quality, company image and customer satisfaction. Fourth, the research sample is only 100 respondents. Future research should use a larger sample as this research is customer-based.Practical implicationsThis study has a significant impact on MSMEs management by providing strategies that can increase and retain customers who have high store loyalty. MSMEs need to design loyalty programs to influence customer perceptions of status, buying habits and relationships with companies. If a customer associates a high value with loyalty program membership, the customer is more likely to find the communication relevant and credible, leading to effective communication that can increase store loyalty.Social implicationsThis study provides real strategies and opportunities for MSMEs to develop so that they can survive or compete with similar companies. It is hoped that MSMEs will be able to absorb more labor so that it can increase the contribution of MSMEs to the national economy.Originality/valueThis study addresses the inconsistency of various results from previous studies regarding the relationship between program loyalty, loyalty programs, communication effectiveness and store loyalty, both directly and indirectly. In addition, several studies have been carried out in large corporate contexts. However, according to the authors’ knowledge, this research is for the first time being conducted in the context of MSMEs.

The impact of customer involvement in airline loyalty programs: a multigroup analysis

Loyalty programs (LPs) have been considered a key determining factor for the performance of many companies. Although the benefits, satisfaction, perceived functional value (PFV), and loyalty (BSPfvL) have been widely explored, few studies have attempted to compare the results of this model in different groups of consumers. This study aims to analyze the relationships for varying levels of user involvement in airline loyalty programs. The population of this study was individual members of airway loyalty programs in Brazil. We obtained 429 answered questionnaires. We used multi-group analysis (MGA) using Partial least squares structural equation modeling (PLS-SEM). The results of this study indicate the mediation effect of satisfaction and perceived value and moderation of consumer involvement. A difference was identified between the two groups regarding hedonic benefits, satisfaction, and loyalty. This research has successfully contributed to the airline industry regarding the importance of loyalty benefits. Additionally, it highlights the importance of establishing consumers’ involvement in company loyalty programs. Finally, this study provides practical and theoretical contributions and guides future research efforts.

On being loyal to a casino: The interactive influence of tier status and disordered gambling symptomatology on attitudinal and behavioral loyalty.

Background and AimsCasino loyalty programs are marketing strategies designed to foster attitudinal (i.e., identification and satisfaction) and behavioral (i.e., spending) loyalty among gamblers by offering rewards to members. Casino loyalty programs use a tier-based structure to segment members who spend more money into higher tiers, where they receive better rewards (compared to lower tiered members). Tier-based structures may encourage increased expenditure among patrons, especially among players living with a gambling disorder. The current work aimed to examine whether tier status and disordered gambling symptomatology interact to predict attitudinal and behavioral loyalty.MethodsStudy 1 used a cross-sectional design to examine whether tier status and disordered gambling symptomatology interact to predict self-reported loyalty among a sample of American casino loyalty program members (N = 396). In Study 2, archival player account data from Canadian casino loyalty program members (N = 649) were analyzed to examine whether tier status and disordered gambling symptomatology interact to predict objective measures of behavioral loyalty.ResultsThe greatest effect of tier status on attitudinal and behavioral loyalty was observed among non-problem gamblers in the highest tiers. Tier status, however, did not influence loyalty among members high in disordered gambling symptomatology.DiscussionResults suggest that once gambling has become problematic, loyalty programs may not influence player attitudes and behaviors. Non-problem gamblers may be particularly susceptible to the tiered structure of the programs.ConclusionNon-problem gamblers may benefit from casino loyalty programs in the short-term but longitudinal research is needed to understand the long-term influence of membership.

Evaluating the impact of VAT-free promotion: the role of loyalty program membership and category characteristics

This study examines the impact of value-added tax (VAT)–free promotions on sales performance. VAT-free promotions are a recently adopted form of price promotions where consumers are exempted from paying the VAT amount across almost all products in the assortment during a limited number of days. They are typically organized once per year and surrounded by a large amount of media attention from the involved retailer. To test the effects of this promotion on store and category sales, and investigate the differences between loyalty program (LP) members and non-LP members, the authors use scanner data from a Dutch durable goods retailer across a range of categories. The results show that VAT-free promotions positively impact store performance. Moreover, the findings indicate that more non-LP members are attracted to the store and that they increase the amount they spend in the store. While LP members also spend more in the store, this increase in shopping basket size does not compensate for the significant drop in the number of LP members that visit the store, leading to an overall decrease in sales coming from LP members during VAT-free days. We furthermore find that the positive effect of VAT-free promotions for non-LP members (rather than LP members) generalizes across all investigated categories. Our results provide key insights for retailers and direct marketers with regard to the effectiveness of VAT-free promotions in order to strategically segment the customer base.

Effect of Personalized Incentives on Dietary Quality of Groceries Purchased

Many factors are associated with food choice. Personalized interventions could help improve dietary intake by using individual purchasing preferences to promote healthier grocery purchases. To test whether a healthy food incentive intervention using an algorithm incorporating customer preferences, purchase history, and baseline diet quality improves grocery purchase dietary quality and spending on healthy foods. This was a 9-month randomized clinical crossover trial (AB-BA) with a 2- to 4-week washout period between 3-month intervention periods. Participants included 224 loyalty program members at an independent Rhode Island supermarket who completed baseline questionnaires and were randomized from July to September 2018 to group 1 (AB) or group 2 (BA). Data analysis was performed from September 2019 to May 2020. Participants received personalized weekly coupons with nutrition education during the intervention period (A) and occasional generic coupons with nutrition education during the control period (B). An automated study algorithm used customer data to allocate personalized healthy food incentives to participant loyalty cards. All participants received a 5% grocery discount. Grocery Purchase Quality Index-2016 (GPQI-16) scores (range, 0-75, with higher scores denoting healthier purchases) and percentage spending on targeted foods were calculated from cumulative purchasing data. Participants in the top and bottom 1% of spending were excluded. Paired t tests examined between-group differences. The analytical sample included 209 participants (104 in group 1 and 105 in group 2), with a mean (SD) age of 55.4 (14.0) years. They were predominantly non-Hispanic White (193 of 206 participants [94.1%]) and female (187 of 207 participants [90.3%]). Of 161 participants with income data, 81 (50.3%) had annual household incomes greater than or equal to $100 000. Paired t tests showed that the intervention increased GPQI-16 scores (between-group difference, 1.06; 95% CI, 0.27-1.86; P = .01) and percentage spending on targeted foods (between-group difference, 1.38%; 95% CI, 0.08%-2.69%; P = .04). During the initial intervention period, group 1 (AB) and group 2 (BA) had similar mean (SD) GPQI-16 scores (41.2 [6.6] vs 41.0 [7.5]) and mean (SD) percentage spending on targeted healthy foods (32.0% [10.8%] vs 31.0% [10.5%]). During the crossover intervention period, group 2 had a higher mean (SD) GPQI-16 score than group 1 (42.9 [7.7] vs 41.0 [6.8]) and mean (SD) percentage spending on targeted foods (34.0% [12.1%] vs 32.0% [13.1%]). This pilot trial demonstrated preliminary evidence for the effectiveness of a novel personalized healthy food incentive algorithm to improve grocery purchase dietary quality. ClinicalTrials.gov Identifier: NCT03748056.

Pengaruh Gamifikasi Terhadap Loyalitas Pelanggan Jaringan Hotel Internasional di Surabaya

In this 4.0 technology era, all industry sectors are required to make use of the internet and the latest technology for running their business process. In the tourism industry, especially accommodation, a system named gamification becomes one of the trends applied in the form of mobile applications done by various international hotel chains. By inserting game features such as tier (level), point, and reward, customers are expected to be more loyal by using those features embedded in the application. Therefore, this paper aims to examine to what extent gamification is able to influence customer loyalty of the international hotel chains in Surabaya. The data was collected by distributing an online questionnaire to the customers registered as loyalty program members of an international hotel chain in Surabaya. The study reveals that customer loyalty of the international hotel chain in Surabaya strongly influenced by the benefits obtained from the loyalty program provided in the form of the mobile applications.

Does love become hate or forgiveness after a double deviation? The case of hotel loyalty program members

Abstract This study aims to (1) examine whether a hotel's loyalty program is effective in weakening the desire for retaliation and perceived betrayal of high-tiered members after a double deviation and (2) determine which recovery tactic is more effective in attenuating their desire for retaliation and perceived betrayal. Scenario-based studies were conducted to achieve the objectives. The findings of this study suggest that high-tiered members are more likely than nonmembers to suppress their desire for retaliation and perceived betrayal during the transition from a single deviation to a double deviation, advocating the “love-is-forgiving” effect. This study also found that financial compensation and apology moderate perceived betrayal among high-tiered members. By contrast, only financial compensation attenuates perceived betrayal among nonmembers. This study contributes to the literature on loyalty programs and customer coping responses with novel findings on how members and nonmembers respond differently to service failure, failed service recovery, and recovery tactics.