Gaining customer loyalty is an important goal of marketing, and loyalty programs are intended to help in reaching it. Research on loyalty programs suggests that customers differentiate between ...loyalty to a company and loyalty to a loyalty program, yet little is known about the consequences of these two types of loyalty. Therefore, our study intends to make two main contributions: (1) improving our understanding of the constructs “program loyalty” and “company loyalty”, (2) investigating the relative impact of the two types of loyalty on preference, intention, and purchase behavior for the case of a multi-firm loyalty program. Results indicate that company loyalty influences a customer’s choice to visit a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior. Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the store, more money is spent.
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.
Value co-creation and customer loyalty Cossío-Silva, Francisco-José; Revilla-Camacho, María-Ángeles; Vega-Vázquez, Manuela ...
Journal of business research,
20/May , Volume:
69, Issue:
5
Journal Article
Peer reviewed
This research examines value co-creation and its effect on loyalty toward the organization from both the attitudinal and behavioral viewpoint. To do so, this research uses the customer's perspective. ...The empirical study uses structural equation modeling (AMOS) as a method, with a sample of 547 users of personal care services firms. The results show the existence of a significant relationship between value co-creation and attitudinal loyalty. The latter also significantly affects behavioral loyalty. The main contributions stem from a better knowledge of the antecedents of loyalty by incorporating a variable not previously studied: value co-creation. This study also offers a contribution to the research field of value co-creation because, in spite of a growing interest in the topic, little knowledge exists on the effects or consequences of this construct.
Marketers desire exclusive brand repurchase. This can occur when customers develop deep emotional “bonds” with brands, as elaborated in the emotional attachment to brands construct. To create ...emotionally attached repurchase, marketers must understand controllable antecedents of the phenomenon. However, a comprehensive study of antecedents is missing from the literature. We use qualitative methods to derive five primary antecedents of emotional attachment to brands. Our summary model allows for simultaneous operation of multiple antecedents, as we consistently observed in our data. We offer applied suggestions for leveraging antecedents to evoke exclusive repurchase based on emotional attachment to brands.
An emerging theory of loyalty program dynamics Kim, Jisu J.; Steinhoff, Lena; Palmatier, Robert W.
Journal of the Academy of Marketing Science,
2021/1, Volume:
49, Issue:
1
Journal Article
Peer reviewed
As exemplary instruments of relationship marketing, loyalty programs are being implemented and studied at an unprecedented rate. Yet real-world efforts often fail—or at least do not live up to ...expectations—and despite the growing richness of loyalty program literature, the field remains fragmented. Thus, a comprehensive perspective is required. To guide further research and suggest ways that managers might improve loyalty program effectiveness, this article synthesizes insights on loyalty programs from empirical research and underlying psychological theories. The proposed conceptual model of loyalty program effectiveness consists of psychological, design, and operational elements; in turn, it suggests a set of 12 propositions that account for differential effects across customer acquisition, onboarding, expansion, and retention stages. With an evolving theory of loyalty programs across relationship dynamics, this propositional inventory parsimoniously delineates the trade-offs associated with relationship stage–based management of these programs. The proposed comprehensive foundation can guide loyalty program practice and research.
Companies allocate significant resources in loyalty programs with the primary goal of enhancing customer loyalty. However, the effectiveness of these programs is now a subject of academic debate. ...Scholars highlight concerns such as the creation of spurious loyalty, the need for perceived value, and evolving consumer expectations. To succeed in this changing landscape, companies must embrace creativity and innovation in their loyalty program design. As creativity and innovations in loyalty programs are new and little-studied phenomenon, a comprehensive assessment of potential creative and innovative features in loyalty programs is essential for a deeper understanding of their influence on customer loyalty. The aim of this study was to measure the influence of creative and innovative loyalty programs’ features on customers’ attitudinal, conative, and behavioural loyalty. 203 respondents took part in the research. Ordered logistic regression analysis was used to reach the aim of the study. The research findings indicate that engagement-, gamification-, personalization-, and experience-based loyalty programs have an influence on customer loyalty. All four types of features of creative and innovative loyalty programs influence attitudinal and behaviour loyalty, and three types of features of loyalty programs, i.e., engagement-, gamification-, and experience-based, influence conative loyalty. The study findings underscore the importance of designing new features of loyalty programs that align with specific loyalty dimensions, as they can have differential effects on attitudinal, conative, and behavioural aspects of customer loyalty. Such insights are valuable for companies seeking to enhance customer loyalty through creative and innovative loyalty program design and implementation.
Firms make large investments in loyalty programs (LPs) to build customer relationships with customer loyalty as one of their primary goals. Despite the popularity of LPs, their effectiveness is ...questioned and the subject of academic debates in relation to outcomes such as profitability. Moreover, extant research has not investigated if customers engage with LPs through LP perceived value and how LP engagement improves LP loyalty, brand loyalty, and customer engagement (CE) with the company brand. This study examines, from a consumer-centric behavioral perspective, LP engagement (LPE) behavior, and how LPE behavior impacts brand and LP loyalty, as well as CE. We introduce LPE behavior, a relatively new concept, in the form of a multi-dimensional set of hierarchically-ordered dimensions. We show a differentiated view of the relationship between the antecedents of brand loyalty as well as LP loyalty and CE. External, convergent and discriminant validity are confirmed by testing our model with a representative sample (n = 593) of the U.S. LP population with participants being members of either a grocery retail chain, department store chain, or airline frequent flyer LP. We show that perceived LP value engages customers with LPs. Subsequently, LPE behavior improves LP loyalty and brand loyalty as well as CE with the company brand.
•Loyalty programs' perceived value positively influences loyalty program engagement.•Loyalty program engagement positively influences brand- and loyalty program loyalty.•Brand- and program loyalty positively influence customer engagement with the brand.•Program engagement is operationalised as a hierarchically ordered set of dimensions.
Despite firms’ extensive usage of loyalty programs (LPs) and decades-long academic research on their effectiveness, LPs’ effects on customer loyalty are still heavily debated. We perform a ...comprehensive meta-analysis of loyalty programs across various LP designs and industries and spanning different performance metrics to identify moderators of LP effectiveness. Based on a data set with 429 effect sizes, published or available between 1990 and 2020, we find strong evidence that LPs enhance customer loyalty. However, while LPs particularly enhance behavioral loyalty, shifting consumers’ attitudinal loyalty is more challenging. Further, LP effectiveness differs systematically depending on LP design characteristics (LP structure, reward content and delivery) and industry characteristics. These effects are enabled by both cognitive and affective drivers, acting sequentially, as underlying mechanisms. Despite a wide range of methodologies investigating LPs’ effectiveness, methodological choices have little impact on the substantive results. We develop a comprehensive research agenda and managerial implications.
Taking an operational perspective on the relations between employee loyalty and business performance, we examine the relationships among employee loyalty, service quality, customer satisfaction, ...customer loyalty and firm profitability, and the contextual factors influencing these relationships. We developed a research model grounded in the service-profit chain notion of
Heskett et al. (1994) and empirically tested the model by conducting a survey of 210 high-contact service shops in Hong Kong. Using structural equation modeling (SEM), we observed that employee loyalty is significantly related to service quality, which in turn impacts customer satisfaction and customer loyalty, ultimately leading to firm profitability in high-contact service industries. Using multiple-group analysis of SEM, we found that the effect of employee loyalty on firm profitability through service quality, customer satisfaction and customer loyalty is robust under different scenarios of employee–customer contact level, market competitiveness, and switching cost in the sampled shops. This finding supports the generalizability of the observed relationships in various operating contexts.
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