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Article
Publication date: 9 August 2021

Aang Curatman, Agus Suroso and Suliyanto

The purpose of this study is to determine the direct effect of a loyalty program on program loyalty and store loyalty and to determine the role of communication…

Abstract

Purpose

The purpose of this study is to determine the direct effect of a loyalty program on program loyalty and store loyalty and to determine the role of communication effectiveness as a mediating variable in moving customers from program loyalty to store loyalty in the context of micro, small and medium enterprises (MSMEs).

Design/methodology/approach

Respondents of this study were 100 customers of the MSMEs that sell Batik products in Cirebon, Indonesia who were selected by the purposive sampling method. This study focuses on primary data collected through a structured questionnaire. Data were analyzed using SmartPLS 3.0 to determine the causality relationship between variables and to test the communication effectiveness as a mediating variable.

Findings

The results of this study indicate that the loyalty program has a significant effect on program loyalty; program loyalty has a significant effect on store loyalty and communication effectiveness, and communication effectiveness has a significant effect on store loyalty. Other results indicate that communication effectiveness partially mediates the relationship between program loyalty and store loyalty.

Research limitations/implications

Despite the significant implications, this study has four limitations. First, the research results cannot conclude the store in general because the sampling of this study is limited to MSMEs only. Future research is needed to explore more deeply to compare store loyalty to MSMEs and non-MSMEs. Second, this research is only aimed at MSMEs that have loyalty programs. Future research can be carried out by comparing MSMEs that have loyalty programs and MSMEs without loyalty programs. Third, this study only uses two independent variables and one mediating variable. As is well known, there are many other variables that are antecedents of store loyalty. Future research needs to be done to explore the effect of other variables (mediating and moderating) on store loyalty, such as service quality, company image and customer satisfaction. Fourth, the research sample is only 100 respondents. Future research should use a larger sample as this research is customer-based.

Practical implications

This study has a significant impact on MSMEs management by providing strategies that can increase and retain customers who have high store loyalty. MSMEs need to design loyalty programs to influence customer perceptions of status, buying habits and relationships with companies. If a customer associates a high value with loyalty program membership, the customer is more likely to find the communication relevant and credible, leading to effective communication that can increase store loyalty.

Social implications

This study provides real strategies and opportunities for MSMEs to develop so that they can survive or compete with similar companies. It is hoped that MSMEs will be able to absorb more labor so that it can increase the contribution of MSMEs to the national economy.

Originality/value

This study addresses the inconsistency of various results from previous studies regarding the relationship between program loyalty, loyalty programs, communication effectiveness and store loyalty, both directly and indirectly. In addition, several studies have been carried out in large corporate contexts. However, according to the authors’ knowledge, this research is for the first time being conducted in the context of MSMEs.

Details

Measuring Business Excellence, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 24 November 2020

Minjung Shin, Ki-Joon Back, Choong-Ki Lee and Young-Sub Lee

This study aims to investigate ways in which hotel loyalty programs can be designed to enhance customer’s identification with a hotel brand and develop a sustainable…

1632

Abstract

Purpose

This study aims to investigate ways in which hotel loyalty programs can be designed to enhance customer’s identification with a hotel brand and develop a sustainable customer-brand relationship.

Design/methodology/approach

The study adopted a cross-sectional design survey questionnaire for data collection and used structural equation modeling data analysis to test the conceptual model.

Findings

The three loyalty program experiences proposed (member-to-member similarity, memorable loyalty program experience and loyalty program social benefits) exerted significant positive effects on customer-brand identification (CBI), which, in turn, influences customer-brand relationship elements, including trust, commitment and switching resistance.

Originality/value

This study expands the scope of CBI literature, which previously focused substantially on brand level experiences, by being the first to explore a new set of CBI antecedents with a focus on loyalty program experiences. Furthermore, the current study’s findings delineate specific strategies to uphold the social and experiential aspects of loyalty programs that can develop sustainable customer-brand relationships.

Details

International Journal of Contemporary Hospitality Management, vol. 32 no. 12
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 27 July 2021

Pınar Başgöze, Yaprak Atay, Selin Metin Camgöz and Lydia Hanks

The purpose of this study is to evaluate the impact of reward structure on the customer's value perception of the program, loyalty to the program and loyalty to the firm.

Abstract

Purpose

The purpose of this study is to evaluate the impact of reward structure on the customer's value perception of the program, loyalty to the program and loyalty to the firm.

Design/methodology/approach

A 2 (type of reward) x 2 (timing of redemption) between subjects experimental design was conducted. In addition, the indirect effect of the customer's value perception of the program on loyalty to the firm via loyalty to the program is tested with Hayes and Preacher's mediation procedure.

Findings

Study results indicated that type of reward has a positive impact on the perceived value of a loyalty program. Program loyalty mediates the relationship between the perceived value of the loyalty program and customer loyalty, as well as the relationship between type of reward and customer loyalty.

Originality/value

The findings of this study demonstrate the importance of the type and timing of loyalty program rewards on customer perceptions of the value of the loyalty program. In addition, this study is a step forward in providing a deep understanding of the impact of such perceptions on loyalty. These findings fill a number of research gaps and provide tangible guidance for practitioners.

Details

Journal of Service Theory and Practice, vol. 31 no. 6
Type: Research Article
ISSN: 2055-6225

Keywords

Article
Publication date: 26 July 2013

Youjae Yi, Hoseong Jeon and Beomjoon Choi

The present study seeks to examine how perceived uncertainty of reward schedule and reward frame (i.e. segregated vs aggregated) affect consumers ' evaluation of…

1879

Abstract

Purpose

The present study seeks to examine how perceived uncertainty of reward schedule and reward frame (i.e. segregated vs aggregated) affect consumers ' evaluation of loyalty programs.

Design/methodology/approach

The authors conducted three experiments to test the hypotheses.

Findings

Ambiguity aversion was salient when the subjects perceived low uncertainty in the schedule of a loyalty program, which led to customers ' choice of a loyalty program with an aggregated frame. In contrast, the subjects displayed ambiguity proneness when they detected a high level of uncertainty in the reward schedule; as a result, the subjects preferred a loyalty program that employed a segregated frame.

Research limitations/implications

The findings show that individuals adopt different types of attitudinal pattern and show dissimilar choice behaviors depending on reward schemes. The findings also provide insights to enhance the understanding concerning how consumers perceive the value of loyalty programs.

Practical implications

Previous research suggests the importance of random elements in relationship marketing. The present study supports this assertion by demonstrating that reward programs providing unexpected benefits can enhance the effectiveness of a loyalty program.

Originality/value

The results provide a more refined understanding about the relationship between perceived uncertainty and reward frame and the psychological mechanism underlying this relationship.

Details

European Journal of Marketing, vol. 47 no. 8
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 6 July 2010

John D. Hansen, George D. Deitz and Robert M. Morgan

This study aims to present a taxonomic framework that categorizes hotel loyalty program members on the basis of involvement and a mix of behavioral outcome variables.

2366

Abstract

Purpose

This study aims to present a taxonomic framework that categorizes hotel loyalty program members on the basis of involvement and a mix of behavioral outcome variables.

Design/methodology/approach

The taxonomy is derived through mixture modeling from a sample of 1,395 loyalty program members of two global hotel chains.

Findings

Study results suggest the presence of four classes of program members across both hotels. Class members differ with respect to the attitudes they hold, the behaviors they exhibit, and the motivations they have for maintaining membership in the program.

Practical implications

First, the study enhances understanding of member differences that exist within loyalty programs. Second, the study advances understanding of the ways through which loyalty programs can best be managed. Third, the study illustrates the usefulness of mixture modeling as a classificatory tool.

Research limitations/implications

Study results are not generalizable beyond the sample used in deriving them. Further, decisions pertaining to what variables to include in developing a taxonomic framework are critical to its usefulness. The choice to include certain variables as well as their related measures, to the exclusion of others, represents a second limitation.

Originality/value

The study is but the second to empirically categorize loyalty program members, and the first to do so in a services context. Two classes of high‐involvement customers emerge, each with contrasting attitudes and behaviors. Thus, our findings suggest that high levels of involvement invoke the most extreme of customer attitudes and behaviors.

Details

Journal of Services Marketing, vol. 24 no. 4
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 14 December 2017

Baolong Ma, Xiaofei Li and Lin Zhang

This paper aims to demonstrate both the positive and negative effects of loyalty programs. The study proposes a model to demonstrate why and how loyalty program strategies…

2344

Abstract

Purpose

This paper aims to demonstrate both the positive and negative effects of loyalty programs. The study proposes a model to demonstrate why and how loyalty program strategies can result in good customer relationships and customer entitlement behaviors. Various configurations of three different loyalty program strategies are analyzed – tangible rewards, preferential treatment and perceived status.

Design/methodology/approach

The authors’ hypotheses were tested by analyzing the survey data of 152 frequent flyer program members in China through partial least squares-structural equation modeling. Fuzzy-set qualitative comparative analysis (fsQCA) was used to test different configurations of the three loyalty program strategies.

Findings

A net effects analysis demonstrates that loyalty programs are a double-edged sword. While loyalty programs can improve customer relationships, strategies based on perceived status have a positive relationship to customer entitlement, which may lead customers to expect extraordinary efforts from companies, such as greater discounts and extra privileges. Using fsQCA, the authors determined four sufficient configurations of high level of relationship quality and high level of customer entitlement, which also support their findings.

Originality/value

First, this study expands the research on loyalty programs by providing an examination of their positive and negative consequences. Second, by proposing the configuration paths that lead to high level of relationship quality and high level of customer entitlement using fsQCA, this research enriches research on the net effects of loyalty programs, providing researchers and practitioners with a more comprehensive understanding of loyalty programs. Third, this research extends the concept of customer entitlement to the context of buyer–seller relationships by introducing perceived status as an important antecedent of customer entitlement and by identifying four sufficient configurations.

Details

Journal of Services Marketing, vol. 32 no. 3
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 15 August 2016

Sreejesh S., Abhigyan Sarkar and Sudeepta Pradhan

This study aims to investigate how the influences of store loyalty programs on store loyalty and store relations can be mediated by the store satisfaction-love framework.

1426

Abstract

Purpose

This study aims to investigate how the influences of store loyalty programs on store loyalty and store relations can be mediated by the store satisfaction-love framework.

Design/methodology/approach

The survey data were collected from selected retail stores using stratified random sampling. The hypotheses were tested using structural equation modeling.

Findings

The results indicate that the impacts of store loyalty programs on store loyalty and store relations are mediated both by store love and store satisfaction.

Practical implications

This study’s findings help practitioners by empirically demonstrating that the combined cognitive satisfaction of consumers with store loyalty programs and affective store love mediate the influences of loyalty programs on consumer loyalty toward the store and on the consumer–store relation. Therefore, cognitive satisfaction with loyalty programs alone cannot create strong loyalty and a customer relationship. Cognitive satisfaction with various loyalty programs must be converted into affective store love for the mediation to be significant and effective.

Originality/value

This research adds value to the domain of store loyalty research by empirically establishing the mediating role played by the cognitive satisfaction-affective love framework in shaping the influences of loyalty programs designed by store management on the final store loyalty and customer–store relationship.

Details

Management Research Review, vol. 39 no. 8
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 11 April 2019

Nan Hua, Stephen Hight, Wei Wei, Ahmet Bulent Ozturk, Xinyuan (Roy) Zhao, Khaldoon Nusair and Agnes DeFranco

This paper aims to offer empirical insights on how investing in e-commerce capabilities affects the relationship between loyalty programs and hotel operating performance…

1948

Abstract

Purpose

This paper aims to offer empirical insights on how investing in e-commerce capabilities affects the relationship between loyalty programs and hotel operating performance so as to aid in identifying proper resource allocation strategies.

Design/methodology/approach

This study extended the model in Hua et al. (2015) by testing the interaction of e-commerce and loyalty programs.

Findings

The findings illustrate that proper allocation of company financial resources to e-commerce initiatives can help improve the impact of loyalty programs on hotel operating performance.

Practical implications

The results of this study illustrate that hotel performance can be improved by the synergy between loyalty program and e-commerce initiatives. Thus, hotel managers and owners can use results from this study to improve the efficiency of their asset allocation strategies, with five practical implications offered.

Originality/value

Theoretically, this study adapted and extended an integrative model of hotel operating performance (Hua et al., 2015) by identifying critical factors that elucidate the variance in firm performance. In addition, the moderating role of e-commerce provides a new conceptualization of information technology. Practically, this study makes several important contributions as well.

Details

International Journal of Contemporary Hospitality Management, vol. 31 no. 4
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 9 January 2017

Ada S. Lo, Holly Hyunjung Im, Yong Chen and Hailin Qu

This study aims to investigate the impact of the loyalty program members’ satisfaction toward the hotel loyalty program benefits and the customer management relationship…

5758

Abstract

Purpose

This study aims to investigate the impact of the loyalty program members’ satisfaction toward the hotel loyalty program benefits and the customer management relationship initiatives of individual hotels on the brand relationship quality (BRQ), i.e. their relationship quality with the hotel brand, and its outcomes. The moderating impact of membership level on the hypothesized relationships was also investigated.

Design/methodology/approach

A usable sample of 920 active members of a hotel loyalty program was obtained. Structural equation modeling with partial least squares method was used to estimate the structural relationships and to investigate the moderating effect of membership level.

Findings

Employee’s customer orientation, membership communication and hotel stay-related benefits are determinants of the loyalty program members’ BRQ. BRQ is also confirmed as a higher-order construct of three latent variables which include trust, satisfaction and commitment. Moderating effects of the membership were partially supported in this study. The strongest effect of BRQ is on members’ word of mouth followed by shares of purchase. BRQ is found to have negative relationship with members’ willingness to serve as marketing resource, but the impact was small.

Research limitations/implications

This is a cross-sectional study with a population of active loyalty program members of only one luxury hotel group. The sample size of the top-tier members is also smaller in comparison to the other two groups.

Practical implications

This study contributes to the understanding of the antecedents and consequences of BRQ and the body of knowledge about loyalty program for hotel industry.

Originality/value

This is one of the few studies investigating the effectiveness of hotel loyalty programs from the active members’ perspective and the moderating effect of membership level on the relationships among BRQ, its antecedents and its outcomes.

Details

International Journal of Contemporary Hospitality Management, vol. 29 no. 1
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 1 December 2006

Russell Lacey and Julie Z. Sneath

The purpose of this paper is to examine the fairness of loyalty programs to consumers regarding two emerging criticisms of loyalty programs: discriminating value…

17782

Abstract

Purpose

The purpose of this paper is to examine the fairness of loyalty programs to consumers regarding two emerging criticisms of loyalty programs: discriminating value proposition segmentation and potential exploitation of captured personal information.

Design/methodology/approach

Equity theory and exchange theory are the theoretical foundations used for evaluation of the aspects of loyalty program fairness.

Findings

First, through the application of equity theory, firms can more effectively recognize and reward more valuable customers without alienating less valuable customers. Second, through the use of exchange theory, firms can secure authorization to collect and use individual customer information from customers in exchange for enhanced value proposition offerings via loyalty programs. Loyalty programs can induce customers to give up their personal information in exchange for benefits they would not otherwise receive. Marketers use the higher level of benefits available through loyalty programs as a form of compensation to customers for sharing personal information.

Practical implications

Customer loyalty programs that are equitably administered and thoroughly communicated will be perceived favorably by consumers.

Originality/value

This paper marks the first study to examine the issue of consumer fairness as it relates to how firms use loyalty programs to collect proprietary information and differentiate value propositions among customer segments. The findings can be used by managers to strengthen the marketing position of the firm through a loyalty program without compromising on their customers' perceptions of fairness.

Details

Journal of Consumer Marketing, vol. 23 no. 7
Type: Research Article
ISSN: 0736-3761

Keywords

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