Loyalty Programmes: Current Knowledge and Research Directions^*

Abstract

Loyalty programmes (LPs) have increased in number and popularity, but their effects on customer behaviour remain equivocal, due to a lack of understanding of the drivers of LP effectiveness and insufficient generalizable conclusions across prior studies. This paper synthesizes current knowledge pertaining to LPs, reconciles opposing findings by exploring the conditions that mediate and moderate the effects of LP participation on consumer responses, and charts important avenues for research. Overall, we find that LPs are effective in increasing consumer purchase behaviours over time, but the impact differs across consumer segments and markets. Currently, neither firms nor consumers fully benefit from the opportunities that LPs offer. To that end, we identify aspects which help researchers and practitioners increase their understanding of LP benefits and pitfalls. Through this study, companies that already have LPs will be able to improve their performance, and those that are about to introduce one will better understand the implications of the LP launch.

Penilaian Kesan Manfaat Program Kesetiaan dalam Hubungan Kepuasan-Kesetiaan: Bukti Empirikal di Malaysia

“…Customers with economic shopping orientation such as 'cherry picker" are more likely to choose loyalty program that promotes utilitarian benefi ts (Suh & Yi 2012). Although utilitarian benefi ts are often regarded as impetus to the high switching cost among members, its impact on customer retention and loyalty in the long run is still undecided as the customers may be easily induced to switch to other stores that have better program benefi ts (Dorotic et al 2012).…”

“…While program benefi t has been commonly associated with monetary benefi ts which is also known as economic, utilitarian or fi nancial benefi ts (Kreis & Mafael 2014;Mägi 2003;Peterson 1995), other types of benefi ts have been increasingly presented in the loyalty program literature. Steyn et al (2010) classifi ed program benefi ts into two categories, namely fi nancial and information; Berezan et al (2013), in their study of hotel loyalty program classifi ed program benefi ts into standard benefi ts, elite benefi ts, promotion benefi ts, and dilution of elite status benefi ts; Leenheer;Van Heerde, Bijmolt, and Smidts (2007) and Zhang and Breugelmans (2012) categorised program benefi ts into economic, psychological, and sociological; Evanschitzky et al (2011) investigated program benefi ts in terms of social benefi ts, special treatment, and overall program value; Suh and Yi (2012) studied in terms of hedonic and utilitarian benefi ts; and Dorotic, Bijmolt and Verhoef (2012) and Mimouni-Chaabane and Volle (2010) examined it in terms of utilitarian benefits, hedonic benefi ts, and symbolic benefi ts. A recent study done by Terblanche (2014) in the context of airlines industry, conceived that program benefi ts are consisted of convenience, exploration, and recognition.…”

Loyalty Programs: Generalizations on Their Adoption, Effectiveness and Design

“…The popularity of LPs has spurred substantial academic research (for previous reviews, see Berman, 2006;Nunes and Drèze, 2006b;O'Brien and Jones, 1995;Uncles et al, 2003;Wansink, 2003), where this review builds on Dorotic et al, 2012. Unfortunately, empirical research shows divergent findings and may bring more confusion than guidance to managers (McCall and Voorhees, 2010).…”

Customer–company identification and the effectiveness of loyalty programs

“…Work by Evanschitzky et al (2012) distinguishes two facets of customer loyalty: loyalty to the program itself or loyalty to the company. Similarly, Dorotic, Bijmolt, and Verhoef (2012) summarize research in loyalty programs and find that loyalty programs develop distinct attitudes toward the programs themselves and to the firm. In this study, we examine two forms of loyalty: program loyalty and company loyalty.…”