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Status demotion in hierarchical loyalty programs (HLPs) has received considerable academic attention. However, existing research is relatively silent on whether HLP status demotion fosters service relationship fading by influencing demoted customers’ psychological disengagement and the likelihood of patronage reduction. Drawing on the relationship fading literature and the stimulus–organism–response framework, this study aims to examine these effects. It further investigates the moderating role of psychological ownership on the links of status demotion with psychological disengagement and the likelihood of patronage reduction.

Two studies (Studies 1 and 2) were conducted in the context of airline HLPs. Study 1 was a structured survey conducted among 213 demoted airline HLP customers in Australia, and Study 2 was an experiment conducted among 178 executive MBA students in Bangladesh. The PROCESS macro was used to test the moderated mediation model.

The results of both studies show that HLP status demotion significantly influences customers’ psychological disengagement and the likelihood of patronage reduction. The findings also reveal that psychological disengagement mediates the relationship between status demotion and the likelihood of patronage reduction. Further, customers with high (low) psychological ownership feel high (less) psychological disengagement and show high (less) likelihood of patronage reduction due to their HLP status demotion.

This study extends the existing literature on relationship marketing and HLPs by offering a better understanding of how and under what conditions status demotion elicits customers’ psychological disengagement and the likelihood of patronage reduction.

In managing hierarchical loyalty programs (HLP), firms often use a reward point expiration and status demotion policy to reduce financial liability and to encourage repeat purchases. This study aims to examine how point expiration and status demotion policies affect customer patronage, the role of extension strategies in mitigating the negative effects of these policies on customers and the moderating role of status endowment in the effect of point expiration on customers patronage following status demotion experience.

Three experiments were conducted using the hotel industry as the context. The hypothesized relationships were tested using ANOVA and a serial moderated mediation analysis using SPSS PROCESS Macro.

Customers subjected to reward point expiration exhibited a higher level of anger and perceived severity of the problem than those subjected to status demotion in HLP. Consequently, when customers experienced both point expiration and status demotion, the point extension strategy rather than the status extension strategy was found to be a more effective remedy for reducing perceived unfairness, although there was no change in the level of patronage reduction between the two extension strategies. Importantly, the effect of point expiration on patronage reduction was stronger among endowed-status customers than earned-status customers, serially driven by heightened feelings of embarrassment and perceived unfairness.

The study adds to the existing literature on HLP by comparing the effects of point expiration and status demotion on customer patronage with practical insights for HLP managers.

Status demotion in hierarchical loyalty programs (HLPs) has received considerable academic attention. However, little is known about whether status demotion engenders two widely recognised behavioural intentions: revenge and avoidance. This study aims to make up this gap by examining the effects of status demotion on customers’ revenge and avoidance intentions. The underlying mechanism and boundary conditions of these effects are also explored.

Two studies were conducted to test the hypotheses. Study 1 was conducted using a structured survey from 347 active HLP members/customers of Chinese airlines. Study 2 used an online experiment amongst 268 active HLP airline customers in Australia. Partial least squares-based structural equation modelling and Hayes’ (2013) PROCESS macro were used for data analysis.

The results of Study 1 show that status demotion increases customers’ revenge and avoidance intentions simultaneously. Meanwhile, these effects are more significant for demoted customers with an external locus of causality than those with an internal locus of causality and demoted customers with higher entitlement tend to possess more revenge intentions than avoidance intentions. Study 2 further identified perceived inequity as a mechanism, which links status demotion to revenge and avoidance intentions of demoted customers.

This study examines demoted customers’ revenge and avoidance intentions amongst Chinese and Australian airline travellers. Future research may focus on actual behaviour and test the current study’s model in cross-cultural and cross-industry settings.

Managers should deal with demotion decisions carefully as the failure to manage outraged customers may weaken customer-company relationships.

This study extends the existing literature on relationship marketing and HLPs by offering a better understanding of how and under what conditions status demotion elicits customers’ intentions for revenge and avoidance.

The purpose of this paper is to extend research on customer loyalty status and customer demotion by investigating if the effect of demotion on customer attitudinal and behavioral responses is the same for top-tier and low-tier customers in the context of airlines.

A survey was conducted with travelers intercepted at large airport terminals in Australia. Multivariate analyses examined group differences across status change (no change vs demoted) and status level (high status vs low status). Multi-group moderation structural equation modeling (SEM) analysis tested the moderating role of status (high status vs low status) on the effects of demotion on the relationship between customers’ attitudes and loyalty intention, and between loyalty intention and share of wallet.

This study shows that the detrimental effects of demotion on the relationship between customer satisfaction/commitment/perceived betrayal on loyalty intentions, and on the relationship between loyalty intentions and share of wallet are stronger for “high status” than “low status” customers.

A cross-sectional design was employed to investigate customer demotion in the airline industry. Future studies could investigate different types of demotions in other industries by employing a longitudinal design.

The study provides new insight about the effects of status demotion and highlights that service firms could be jeopardizing the loyalty of numerous valuable customers, especially among the “high status” customer group.

This study reveals loyalty status moderates the effect of demotion on customer attitudinal responses and loyalty behaviors. It draws on social identity, social comparison, emotion and equity theories to explain the different effects of demotion on customers from different status level groups.

This paper aims to investigate how to design a firm’s customer demotion policy and communication styles differently for customers demoted from top-tier and bottom-tier to promote their willingness to restore lost status and loyalty intentions.

Four scenario-based experiments were conducted in the customer demotion context of an airline’s hierarchical loyalty program. A total of 796 customers recruited from a survey panel participated in the study.

The results reveal that customers in top-tier demotion significantly increase their willingness to restore lost status and loyalty intentions when a short evaluation period (vs a long evaluation period) is given. Further, customers in bottom-tier demotion improve their willingness to restore and, in turn, their loyalty intentions more with a gain-focused communication style than with a loss-focused communication style. Willingness to restore lost status plays a mediating role in the process by which an appropriate match between demotion type and evaluation period type/communication styles leads to higher loyalty intentions.

This study extends the research stream on customer demotion by examining how to execute customer demotion to mitigate its detrimental effects and facilitate demoted customers’ approach motivation and behavioral intentions, a critical but understudied topic that has been ignored by researchers.

Managers are advised to offer customized customer status evaluation periods and communication styles for top-tier and bottom-tier demoted customers to effectively promote their willingness to restore lost status and loyalty intentions.

This study is among the first to explore the possible varying effects of differential demotion policy and communication style on different tiers of customers.

The goal of this paper is to empirically investigate the effects of an loyalty program (LP) introduction and termination, accounting for simultaneous effects of LP designs, cross-customer effects and competition effects. Despite firms across the globe spend billions of dollars on LPs, it is not clear: whether these programs enhance customer loyalty, what happens if a program is terminated and which LP design elements enhance effectiveness of LPs.

The authors empirically investigate to what extent the effects of introducing and terminating a LP depend on: its monetary and non-monetary design elements, customer characteristics and competition. The empirical evidence is based on a bivariate hierarchical linear model, using a large-scale dataset involving 9,783 consumers rating 24 different LPs across eight industries.

While the characteristics of LP are more important in influencing customer behavior when they join the LP, the competitive environment and the duration of membership in an LP are the primary drivers of customer reactions to LP termination. Non-monetary discrimination between members and non-members is a more powerful tool in creating customer loyalty than offering higher discounts or saving points. The effect of discrimination on loyalty sustains when an LP is terminated.

This is the first research to empirically investigate the effect of an LP termination, accounting for simultaneous effects of LP designs and competition effects. The authors measured behavioral intentions in a hypothetical case of LP termination. Future research could assess the effects of LP termination and the moderating role of both monetary and non-monetary design elements on other behavioral loyalty variables based on, e.g. household panel data, when such data on LP terminations across industries becomes available.

When a firm considers the introduction of an LP or changing an existing one, non-monetary discrimination between members and non-members seems to be the most effective tool in building sustainable customer loyalty. Further, offering a relatively low saving rate is a viable way to keep costs down because the savings percentage does not significantly affect loyalty. For the same reason, firms can also consider reducing or eliminating LP-based discounts. The competitive environment and the duration of membership in an LP are the primary drivers of customer reactions to LP termination.

To the best of authors’ knowledge, the potential effects of LP termination have not been addressed in the current literature. The authors empirically assess the effects of LP termination and effects of those programs at the introduction. Understanding the factors that moderate the potential negative impact of terminating an LP is of crucial importance to managers and researchers alike. The paper is of great value for firms that consider introducing, modifying or terminating an LP.

A distinction must be drawn between a dismissal on the one hand, and on the other a repudiation of a contract of employment as a result of a breach of a fundamental term of that contract. When such a repudiation has been accepted by the innocent party then a termination of employment takes place. Such termination does not constitute dismissal (see London v. James Laidlaw & Sons Ltd (1974) IRLR 136 and Gannon v. J. C. Firth (1976) IRLR 415 EAT).

The purpose of this paper is to highlight the increased impact that academic research can gain when collaborating and sharing knowledge with corporate stakeholders and marketing practitioners, through the lens of managing tier demotion and deceitful behaviors in a channel marketing program. In particular, this paper highlights that true impact (defined as being meaningful change) can only be achieved when the research findings are operationalized and deployed as a business solution.

The approach taken in this paper is to challenge the traditional paradigm where field research is led by academics and places the corporate stakeholder at the centre of the research, where they have a leading role. This involves identifying, selecting, collaborating and engaging with key corporate stakeholders early in the research project, thus gaining their input and support so that the research recommendations secure the necessary funding to be successfully deployed.

The authors highlight two research projects focused on tier demotion and disengagement and deceitful behaviour driven from incentivise and gamifying learning. A new tier demotion process involving a highly customised customer care charter has been deployed and resulted in a re-engagement rate of 81% from those channel partners who were demoted (a rise from 40%). Deceitful behaviour detection tools were also deployed, resulting in 4,300 possible deceptive cases being investigated and resolved in Year 1, reducing to 451 in Year 6.

The change in research approach where field research places the corporate stakeholder at the centre of the research will add to the complexity of the research project, impact on timelines and introduce more stakeholders into the research team, which may have wider implications to the original research goal.

This transition will require academics to know more about their corporate partner, the corporate landscape, adding to the complexity of the research project and cede some control over the project.

Whilst academic research contributes to a body of theoretical concepts, equally important is bringing to life the research findings to show actual impact and meaningful change within the research setting. The present research approach has since been applied to multiple channel loyalty programmes across numerous industries increasing revenue and driving the success of the respective programmes. One key learning would be to engage more corporate stakeholders as part of the research project from the outset. The author neglected the legal and trust and compliance team and they had a significant impact on what findings were eventually implemented.

This study aims to examine how social exclusion and the social status of a rejecter affect consumers’ purchase intentions toward ordinary products.

Three experiments were conducted to test the hypotheses.

The status of a rejecter, whether high or low, had a significant influence on individuals’ evaluations of ordinary products. Results showed that individuals who were rejected by a low status source had higher purchase intentions toward the ordinary (vs unique) products compared to those who were rejected by a high status source due to threatened self-concept.

With the increased number of lonely consumers in the market today, firms should pay closer attention to the behavioral patterns of consumers who are socially excluded. In addition, firms should be aware that consumers’ purchase intentions vary depending on the sources of social exclusion.

This paper addresses the significant impact of sources of social exclusion on consumers’ evaluation of ordinary products. Moreover, this study focuses on a relatively neglected definition of social status, namely, the sociometric status, to fill the gap in the social status literature.

This paper aims to investigate the relationships amongst career patterns, neutrality of the state civil apparatus, and organizational performance of the local government in South Konawe District, Southeast Sulawesi Province in Indonesia.

Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to investigate the relationships between variables through direct and indirect influence testing.

The findings reveal that career patterns influence neutrality and organizational performance. Neutrality of the state civil apparatus in politics mediates career patterns and local government organizational performance. The findings indicate that, first, promotions most significantly influence the organization’s neutrality and performance. Second, demotions have the least influence on the organization’s robustness and performance.

This paper is among the first to examine the relationships amongst career patterns, neutrality, and organizational performance. Recommendations are provided to improve neutrality and organizational performance, that is, the need to increase promotions and reduce demotions.