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.
This study investigates whether and how gamification in loyalty programs (i.e., gamified loyalty programs) impacts consumer loyalty toward loyalty programs and behavioral intentions, along with the ...role of the type of rewards (self-oriented vs. altruistic rewards). The data were collected from U.S. consumers responding to LPs offered in the mobile environment. The results confirmed that gamified loyalty programs (vs. conventional ones) increased consumer loyalty toward loyalty programs which in turn enhanced consumers' participation intention and app download intention. Playfulness and attitude toward the program served as mediating mechanisms underlying the impact of gamification. The indirect relationships were stronger under conditions of self-oriented rewards. Also, reward types moderated the indirect pathway of playfulness, but not attitude. These findings support the essential role of gamification in customer relationship management, an understanding which offers important practical implications for how firms might implement gamified loyalty programs to promote consumer responses.
In an ever more transparent, digitalized, and connected environment, customers are increasingly pressuring brands to embrace genuine corporate social responsibility (CSR) practices and co-creation ...activities. While both CSR and co-creation are social and collaborative processes, there is still little research examining whether CSR can boost co-creation. In addition, while previous research has mainly related co-creation to emotional outcomes (e.g., customer affective commitment), limited empirical research has related it to rational (e.g., customer trust) and behavioral outcomes (e.g., customer loyalty). To address these shortcomings in the literature, this paper examines the influence of CSR on customer loyalty, considering the mediating roles of co-creation and customer trust. It also investigates the influence of co-creation on customer trust. The data were collected in Spain in late 2017 using an online survey, and the sample contained 1101 customers of health insurance services brands. Structural equation modeling was used to test the hypothesized relationships simultaneously. The results show that CSR influences customer loyalty both directly and indirectly through co-creation and customer trust. However, the indirect impact is the stronger of the two, implying that embracing co-creation activities and developing customer trust can make it easier for CSR practices to enhance customer loyalty. In addition, co-creation has a direct effect on customer trust.
An emerging theory of loyalty program dynamics Kim, Jisu J.; Steinhoff, Lena; Palmatier, Robert W.
Journal of the Academy of Marketing Science,
01/2021, 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.
Despite the growing literature on loyalty program (LP) research, many questions remain underexplored. Driven by advancements in information technology, marketing analytics, and consumer interface ...platforms (e.g., mobile devices), there have been many recent developments in LP practices around the world. They impose new challenges and create exciting opportunities for future LP research. The main objective of this paper is to identify missing links in the literature and to craft a future research agenda to advance LP research and practice. Our discussion focuses on three key areas: (1) LP designs, (2) Assessment of LP performance, and (3) Emerging trends and the impact of new technologies. We highlight several gaps in the literature and outline research opportunities in each area.
Purpose
The 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/approach
Respondents 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.
Findings
The 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/implications
Despite 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 implications
This 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 implications
This 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/value
This 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.
This research examines the role that brand community plays in the relationship between brand identification and brand loyalty. A theoretical framework was developed and tested using an online survey ...in the brand community of a UK professional basketball team. Study results reveal that consumers’ brand community identification has a significant direct relationship on both public and private brand loyalty. It also shows that brand community identification fully mediates the relationship between brand identification and consumer behavior towards the brand, which is enacted both publicly and privately. The study adds to academic understanding of brand identification, brand community theory, and the importance of the differentiation of public and private brand loyalty, whilst providing guidance for branding practitioners.
Achieving customer loyalty is a primary marketing goal, but building loyalty and reaping its rewards remain ongoing challenges. Theory suggests that loyalty comprises attitudes and purchase behaviors ...that benefit one seller over competitors. Yet researchers examining loyalty adopt widely varying conceptual and operational approaches. The present investigation examines the consequences of this heterogeneity by empirically mapping current conceptual approaches using an item-level coding of extant loyalty research, then testing how operational and study-specific characteristics moderate the strategy → loyalty → performance process through meta-analytic techniques. The results clarify dissimilarities in loyalty building strategies, how loyalty differentially affects performance and word of mouth, and the consequences of study-specific characteristics. Prescriptive advice based on 163 studies of customer loyalty addresses three seemingly simple but very critical questions:
What is customer loyalty
?
How is it measured
? and
What actually matters when it comes to customer loyalty
?
This research investigates whether there are enduring effects of goal achievement and failure within customer loyalty promotion programs. We collaborated with a major hotel chain to launch a large ...scale field experiment involving 95,532 existing loyalty customers. We observed customers’ hotel stays for eight months before the experiment, eight months during the experiment, and eight months after the experiment. Customers in the treatment group were asked to increase their hotel nights during the 8-month promotion by a set percentage relative to their baseline to receive a reward. Overall, the promotion led to increased purchasing in the post-promotion period. However, only 20% of customers successfully reached the goal whereas 80% missed the goal. We use a propensity score analysis to examine the distinct effects of goal achievement versus goal failure. Results show that goal attainment significantly increased post-promotion purchasing whereas goal failure significantly reduced post-promotion purchasing. Additionally, we use econometric methods to empirically test a behavioral theory of relationship-based reciprocity. We find that customers in a high status tier relationship, with the most invested in the firm, are most affected by goal failure whereas customers in a low status tier relationship, with the least invested in the firm, are most affected by goal success. Because the type of loyalty program described in this paper is widely used in a variety of industries the findings suggest that marketers should set reachable goals within loyalty promotion programs. Firms should be particularly cautious about the impact of goal failures for the firm’s most loyal customers.
Data, as supplemental material, are available at
http://dx.doi.org/10.1287/mksc.2015.0966
.
Customer experience has drawn significant interest in recent times from both academicians as well as practitioners. There is growing understanding in literature that attitudes are formed by past and ...present experiences and are expected to change as a function of consumer experience. Attitudes are described as one of the most important determinant of the behaviour. Dick and Basu (1994) were precise in suggesting that a favourable attitude and repeat purchase were required to define loyalty as they viewed loyalty in an attitude-behaviour framework, loyalty is an important concept related with repetitive purchasing behaviour and high Consumer spend. Literature suggests that building loyalty is found in successful management of Customer experience yet little research exist that incorporated this variable into explaining customer loyalty therefore signifying a gap in existing substantive knowledge. The current paper studies the impact of customer experience on attitudinal and behaviour loyalty. The study extends the findings by adding an observed behaviour- share of spend in the frame work. The present study will provide valuable insights to theorist in the retail context as well as practitioners ability to develop more effective strategies.
•The study explores the relation between observed behaviour in the form of share of wallet and loyalty.•Discusses the role of customer experience in the loyalty framework.•Revisit the hierarchical approach in the loyalty framework.
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