There is scant research that examines the effect of credit card churning customers (as a type of endowed loyalty) compared to earned loyalty program customer perceptions. Additionally, this research ...identifies a critical variable to better understand cross-customer comparisons, protestant work ethic (PWE). Study 1 uses an exploratory qualitative approach to gain insights into this phenomenon, specifically identifying the unique variable of PWE. Study 2 uses a 2 (self: earned vs. endowed) × 2 (other: earned vs. endowed) × 2 (PWE) quasi between-subjects experiment. Results find that anger mediates the three-way interaction effects to attitudinal loyalty intention, but it was only valid among low PWE customers. This study contributes to the social comparison theory and loyalty literature by introducing the impact of loyalty status acquisition methods. Practically, this study results urge credit card companies and associated hospitality firms to be aware of churners and propose implications to minimize the negative effects.
Purpose
Despite the abundance of B2B loyalty programs (LPs), the research on their interplay with relationship marketing is scarce. The purpose of this paper is to investigate a LP (a relational ...practice) on a transactional business market to test if and how a B2B LP affects relationship outcomes.
Design/methodology/approach
The study is based on dyadic research in a multi-theory framework. Data were collected from 200 small and medium enterprises that purchase office supplies from a company and merged with the company’s internal records.The formative-reflective measurement model is estimated using structural equation modeling – partial least squares (SEM-PLS).
Findings
Relationship quality (RQ) directly affects sales and customer share of wallet. The effect is strengthened by customer activity in a LP. RQ results directly in a longer tenure and willingness to recommend only for members of a LP.
Research limitations/implications
RQ is driven mainly by customer’s evaluation of prior experience with a supplier, while a LP is based on a forward-looking promise of a reward. The results of the study point to the level of customers’ activity in a LP as a boundary condition of the program’s efficacy.
Practical implications
RQ affects both attitudinal and behavioral outcomes but through distinct mechanisms. Once a supplier is a preferred one, LP membership strengthens the attitudinal outcome of a relationship. The effect of RQ on company performance is magnified by the level of customer activity in a LP but not by the membership status.
Originality/value
The theoretical framework integrates transaction costs, relational contract and relational exchange theories to investigate a LP on a transactional market. The study adds to the scant literature on LPs in business-to-business and provides evidence for similarities and differences in comparison to consumer research.
We study the interaction between the design of a premium-status loyalty program, revenue management, and strategic consumer behavior. Specifically, we consider a contemporaneous change where firms ...across several industries switch their loyalty programs from quantity-based toward spending-based designs. This change has been met with fierce opposition from the media and consumers. Building on the microfoundations of strategic, forward-looking, and status-seeking consumer behavior, we endogenize strategic consumer response to firms’ pricing and loyalty program design decisions, and we characterize conditions under which, by coordinating these decisions, firms can benefit from strategic consumer behavior. We further show that by switching to a spending-based design, firms can benefit from strategic behavior even more, under broader conditions, and in a Pareto-improving way. Finally, we also analyze combined designs, which utilize a combination of quantity and/or spending requirements, and show how they can be used to better manage the transition toward spending-based designs, possibly minimizing negative consumer reactions.
This paper was accepted by Serguei Netessine, operations management.
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► There is a positive relationship between customer satisfaction and loyalty. ► The variance explained by just satisfaction on loyalty is rather small. ► Moderators, mediators, ...antecedent variables, or all three are better predictors of loyalty than just customer satisfaction. ► The satisfaction–loyalty relationship has the potential to change over customer life-cycle. ► The study offers specific guidelines on who, when, and how much to satisfy.
This extensive literature review highlights the state of the art regarding the relationship between customer satisfaction and loyalty, both attitudinal and behavioral. In particular, it brings to light several issues that should be carefully considered in analyzing the efficacy of customer satisfaction in explaining and predicting customer loyalty. In fact, for many years companies all around the world have heavily invested in customer satisfaction in the hope of increasing loyalty, and hence, consequently, profitability. But after having gone through a detailed analysis, it is clear that this link it is not as strong as it is believed to be and customer satisfaction is not enough to explain loyalty. In fact, the major findings of this review are captured in the form of a few empirical generalizations. We generalize that, while there is a positive relationship between customer satisfaction and loyalty, the variance explained by just satisfaction is rather small. Models that encompass other relevant variables as moderators, mediators, antecedent variables, or all three are better predictors of loyalty than just customer satisfaction. Further, the satisfaction–loyalty relationship has the potential to change over time. Similar weaker findings are uncovered and the study offers specific guidelines on who, when, and how much to satisfy. Finally, suggestions for future research to explore this domain are offered.
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.
We examined the effect on customer loyalty of the type of loyalty program (paid vs. free) and timing of rewards (immediate vs. delayed). To test the research objectives we recruited 142 Korean ...college students and used a 2 × 2 full-factorial, randomized experimental design. Results
suggested that the membership fee in paid loyalty programs acted as a sunk cost, which, compared to free loyalty programs, led to greater loyalty to the provider. An immediate (vs. delayed) reward was generally preferred; however, owing to the sunk cost effect, this depended to some extent
on the type of loyalty program. In a paid loyalty program, immediate rewards were effective in increasing customer loyalty, whereas customers in free loyalty programs focused more on receiving the reward regardless of its timing. Our findings contribute to the literature by providing useful
information for the design of an effective loyalty program scheme.
The purpose of this article is to study tendencies in the behavior of Ukrainian consumers in the market after the onset of Russia’s military invasion, to define the factors that influence the level ...of the consumers’ loyalty to the products (services) of companies, and to develop recommendations for effective management of projects to increase the loyalty of the companies’ customers. The article stipulates that Russia’s large-scale military invasion of Ukraine significantly affected the existence and functioning of the majority of domestic companies, which have just begun to restore the performance indicators of their own business and adapted to work in the context of the COVID-19 pandemic, as well as the level of purchasing power of consumers. The state of Ukrainian business and trends in changes in consumer behavior in the market in conditions of war are considered. It is determined that entrepreneurs need to make every effort to retain their clientele and attract more new customers, and for this they need to develop and implement comprehensive loyalty programs that will allow building a long-term effective partnership with their target audience. The level of loyalty is the main indicator of the effectiveness of the company’s interaction with its consumers. The author has researched and proposed a classification of currently relevant factors influencing customer loyalty, account of which will contribute to the transition of regular customers of the company to the category of loyal. The expediency of implementing special projects for the development and implementation of loyalty programs in the company is substantiated. It is defined that the application of the project management methodology will contribute to their successful implementation in compliance with all restrictions: time, content, cost, and quality, as well as reduce risks and avoid or level numerous deviations in the project that arise as a result of changes in the external and internal environment. To implement projects, a team of highly qualified specialists must be formed. The success of implementing a program to increase customer loyalty depends on the competent management of the project by a professional project manager. Successful application of knowledge of project management methodology and professional management of a team of specialists will contribute to the effective management of projects to increase customer loyalty and achieve strategic goals in the company’s development.
Firms spend substantial resources responding to customer complaints, and the marketing profession has a long history of supporting that enterprise to promote customer loyalty. The authors question ...whether this response is always warranted or whether its effectiveness instead depends on economic, industry, customer–firm, product/service, and customer segment factors that may alter the firm’s incentives to compete on complaint management. To consider this question, they integrate economic and marketing theories and investigate factors that influence the complaint recovery–customer loyalty relationship via a sample of 35,597 complaining customers spanning a ten-year period across economic sectors, industries, and firms. Overall, the authors find that the recovery–loyalty relationship is stronger in faster-growing economies, for industries with more competition, for luxury products, and for customers with higher satisfaction and higher expectations of customization. Conversely, the recovery–loyalty relationship is weaker when customers’ expectations of product/service reliability are higher, for manufactured goods, and for men compared with women. The authors discuss implications of these results for managers, policy makers, and researchers for more effective management of customer complaints.
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