Loyalty programs (LPs) have become a mainstay marketing tool for many industries worldwide, with memberships often numbering in the millions. Program rewards are offered as incentives to build member loyalty, and theoretically these rewards have a perceived benefit value that generate feelings and attitudes such as satisfaction, trust, commitment and gratitude that can be antecedents of loyalty.
The question of whether loyalty programs actually generate loyalty, however, is still being debated by researchers due to conflicting data (Hallberg, 2004; Meyer-Waarden, 2006; Uncles, et al., 2003). Research indicates that focusing on premium customers may be the key to a successful loyalty program (Long & Schiffman, 2000; Yi & Jeon, 2003), but there is a lack of LP research that focuses on this top tier of customers.
This research tested hypotheses derived from existing theories to examine the relationships between program rewards and loyalty for premium customers. This included testing hypotheses about the key antecedents of loyalty—satisfaction, trust, commitment and gratitude—to determine their role in driving the performance outcome.
The gaming industry was used for a sample of 1,097 premium customers in a loyalty program. The online survey had a 43% response rate. There were seven Likert-type scales with alphas ranging from .84-.93.
Rewards were categorized as being prestige, tiered or core. The loyalty construct was operationalized as being attitudinal or behavioral.
Multiple regression was used for hypotheses testing. Key findings were that premium customers value all three of the reward categories highly. The only statistically significant difference was that prestige rewards generate higher attitudinal and behavioral loyalty than core rewards. No significant differences were observed from the control variables of age and gender.
Findings from this study indicate that companies with loyalty programs cannot afford to risk losing customer loyalty by eliminating any type of reward. However, there is also evidence that soft-cost prestige rewards could effectively replace some hard-cost tangible rewards without reducing overall program value.
|Commitee:||Shackman, Joshua, Zamarin, David|
|School Location:||United States -- California|
|Source:||DAI-A 75/05(E), Dissertation Abstracts International|
|Keywords:||Loyalty programs, Performance outcome, Premium customers, Program rewards, Satisfaction and gratitude, Trust and commitment|
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