Review of the theoretical underpinnings of loyalty programs

Abstract

A review of the extant literature reveals that the theoretical underpinnings of the majority of loyalty program research rest on psychological mechanisms from three specific domains-status, habit, and relational. We propose that to understand how loyalty programs actually work, a broader, more holistic research perspective is needed to account for the simultaneous effects across these three theoretical domains as well as both cross-customer and temporal effects. The contribution of this approach is a fresh research agenda advanced in 15 research propositions.

Customer–company identification and the effectiveness of loyalty programs

“…Theoretically, loyalty programs drive habit-, status-, and relationshipbased customer loyalty through several mechanisms (Henderson, Beck, & Palmatier, 2011). Economic and psychological mechanisms, such as financial value, switching costs, feelings of superiority, and brand association, suggest that loyalty programs can enhance habit-and status-based customer loyalty (Drèze & Nunes, 2009;Kim, Shi, & Srinivasan, 2001;Roehm, Pullins, & Roehm, 2002).…”

“…A company devises loyalty programs to influence customers' perceptions of status, buying habits, and relationship with the company and thus encourage greater customer loyalty (Henderson et al, 2011). Thus loyalty programs feature financial benefits (Bolton, Lemon, & Verhoef, 2004), such as customer discounts, cash-back offers, and coupons (Mimouni-Chaabane & Volle, 2010).…”

Business relations in hospitality: A structural model applied to the corporate segment

“…O marketing de um hotel desempenha um papel fundamental no cumprimento desses objetivos, nomeadamente o marketing relacional, que é atualmente um tema de destaque. Segundo a literatura (e.g., Beck et al, 2015;Bradford et al, 2010;Henderson et al, 2011;Krasnikov et al, 2009;Maggon e Chaudhry, 2015;Nyaga e Whipple, 2011;Palmatier et al, 2013), o futuro do marketing passa inevitavelmente pelo marketing relacional. Isso porque o marketing com objetivos imediatistas (hit-and-run marketing) não serve nem aos verdadeiros interesses dos compradores nem aos interesses dos vendedores uma vez que fica mais dispendioso às empresas atraírem novos clientes do que fidelizar os existentes.…”

“…Essa abordagem radica também na ideia de que os compradores obtêm utilidade a partir do capital social (Granovetter, 1985;Hughes, Le Bon e Rapp, 2013). Todavia, apesar de um consenso generalizado acerca dos benefícios de uma abordagem relacional, gestores e académicos têm vindo a expressar algum desapontamento, porque o marketing relacional produz, por vezes, resultados contraditórios (Palmatier et al, 2009) e poderá não corresponder às expetativas (Henderson, Beck e Palmatier, 2011). Isso poderá acontecer se, por exemplo, for adotada uma abordagem relacional indiscriminada, que não cuida de selecionar criteriosamente os contextos e os segmentos em que o marketing relacional pode ser mais eficaz.…”

The effectiveness of reciprocity appeals in economic booms and busts

“…It is no surprise, then, that reciprocity has been implicated in a wide range of psychological processes, from the development and maintenance of social relationships (Kelln & Ellard 1999) and large-scale group cooperation (Axelrod, 1984), to interpersonal influence and consumer behavior (Cialdini, 1993;Henderson 2011;Morales, 2005). But why is reciprocity so prevalent, and so powerful?…”