Factors Contributing to Popularity of Loyalty Programs

Abstract

Using secondary data from multiple sources, this study empirically examines the factors that contribute to the popularity of loyalty programs in the airline and hotel industries in the context of emerging market economies. We find that the number of partners, the number of redemption options, and the threshold for obtaining elite status all positively contribute to a loyalty program's popularity. However, the award redemption requirement has the opposite effects on a program's popularity. Our results show that the redemption requirement of top-tier preferential treatment negatively affects the program's popularity. Surprisingly, the redemption requirement of entry-tier preferential treatment positively affects the program's popularity. As one of the few program-level empirical studies, this study contributes new insights to the extant literature on loyalty program management and provides managerial guidelines for practitioners in the hospitality sector.

Designing for loyalty programme effectiveness in the financial services industry

“…When evaluating the individual perceived benefit categories, it is evident that some of the categories are not directly related to the products and services provided by financial institutions. Loyalty programmes form strategic partnerships to provide a wider range of perceived benefits (Yoo et al 2018 ), and the inclusion of these partners increases the adoption of these programmes (Yan and Cui 2015 ).…”

The effects of frequent flyer programs in the airline industry on customer loyalty

“…The shape and content of holiday offers within FFPs help to increase the commercial potential of national and international tourism organizations. For this reason, FFPs come to the fore as an intermediate factor for the travel planning of passengers [35]. When viewed from another angle, FFPs also appear to represent a sensitive situation for customers.…”

Influence of special treatment benefits on Generation Y students’ attitude towards retail point-based loyalty programmes

“…Numerous academic research studies have focused on loyalty programmes due to the increased popularity worldwide (Bijmolt et al, 2010;Dorotic et al, 2012;Steinhoff & Palmatier, 2014;Yan & Cui, 2016). Although loyalty programmes have been utilised since the 1980s, the importance of loyalty programmes have increased owing to the potential for increasing consumer loyalty, consumer purchase intentions and subsequent business performance (Pirsch et al, 2007).…”