Framing as status or benefits?

Abstract

Purpose A fundamental aspect of hierarchical loyalty programs is that some consumers get rewards that others do not. Despite the widespread use of such programs, academics have long debated whether these benefits are outweighed by the potential negative impact of the differential treatment of customers. This study aims to extend our understanding, examining the impact of message framing on consumers’ reactions to hierarchical loyalty structures. Design/methodology/approach Three online studies were conducted. Study 1 uses advertisements to manipulate the message frame’s emphasis (benefits vs status). Study 2 manipulates consumers’ frame of thought by directing their attention to either changes in benefits or status. Finally, Study 3 uses the proposed framework to reconcile contradictory findings from past research. Findings Low-frequency customers who do not expect to qualify for a superior customer tier tend to reject hierarchical programs when thinking about status. In contrast, when these customers think about concrete rewards, loyalty program messages produce no negative reactions. High-frequency customers are positively affected by communication regardless of the type of benefits framed. Research limitations/implications All studies were done online, potentially limiting the external validity of the results. Nevertheless, the impact of message framing on perceptions about the loyalty program seems to be quite robust across different studies and manipulations. Practical implications When communicating with low-frequency customers, managers should avoid promising status; customers should instead be motivated based on concrete rewards. High-frequency customers are indifferent to alternative emphasis of communication frames. Originality/value Marketing academics have acknowledged the importance of being able to reward top customers without demotivating light and moderate users. This research is the first to provide a solution to this issue.

Providing health checks as incentives to retain blood donors — Evidence from two field experiments

“…Together, due to the mixed evidence of direct monetary incentives or material gifts on donation behavior and the potential drawbacks, alternative marketing strategies are required. One such strategy is to provide a special service to important customers (e.g., access to airport lounges for premium customers; Palmeira et al, 2016). In the context of blood donation services, offering a comprehensive blood test to a donor would be directly related to the service provided by the donor (donating blood).…”

Need for distinction moderates customer responses to preferential treatment

“…A typical example of preferential treatment is the provision of time savings and higher status that members of loyalty or VIP programs enjoy. Although these special benefits are highly meaningful and desirable for customers (Drèze and Nunes, 2009; Heffetz and Frank, 2011), they can have a detrimental effect on customers who do not receive them (Palmeira et al , 2016).…”

“…Firstly, because the provision of preferential treatment is typically done in public settings where individuals share the same service scape (Bolton et al , 2004), it invites social comparison and consequently the chance for customers to perceive and experience different service outcomes (Argo et al , 2006; Festinger, 1954; Lacey et al , 2007). For example, providing advantaged customers status benefits such as priority boarding serves to highlight the lower status of non-advantaged customers, who may not wish to see signals of their lower standing and may experience feelings of inferiority (Palmeira et al , 2016). Secondly, because resource scarcity is endemic in services due to limited productive capacity and/or limited human resources, providing additional scarce resources to an advantaged customer may mean that the disadvantaged customer is not provided any resources at all (Butori and De Bruyn, 2013), leading to frustration and even anger.…”

“…Preferential treatment is often lauded for generating positive emotional and behavioural responses from customers who receive special benefits; however, emerging research calls into question the effectiveness of preferential treatment as a relationship marketing strategy by investigating its negative effects (Henderson et al , 2011; Jiang et al , 2013; Lacey et al , 2007; Palmeira et al , 2016; Pontes et al , 2021; Reinartz and Kumar, 2002; Wagner et al , 2009) . Research shows that advantaged customers may feel embarrassed when preferentially treated in the presence of other customers (Butori and De Bruyn, 2013, Pontes et al , 2021) or experience concerns about negative judgment and retaliation from others, which leads to social discomfort and reduced satisfaction (Jiang et al , 2013).…”

“…Preferential treatment allows service providers to fulfil the need for status and distinction that customers seek in consumption experiences (Drèze and Nunes, 2009;Henderson et al, 2011). This practice also encourages a customer's desire to be different from others by using scarcity appeals, uniqueness appeals and appeals to breaking the rules of one's reference group (Huang et al, 2014;Lynn and Snyder, 2002) Preferential treatment is often lauded for generating positive emotional and behavioural responses from customers who receive special benefits; however, emerging research calls into question the effectiveness of preferential treatment as a relationship marketing strategy by investigating its negative effects (Henderson et al, 2011;Jiang et al, 2013;Lacey et al, 2007;Palmeira et al, 2016;Pontes et al, 2021;Reinartz and Kumar, 2002;Wagner et al, 2009) . Research shows that advantaged customers may feel embarrassed when preferentially treated in the presence of other customers (Butori andDe Bruyn, 2013, Pontes et al, 2021) or experience concerns about negative judgment and retaliation from others, which leads to social discomfort and reduced satisfaction (Jiang et al, 2013).…”