Which loyalty program do customers prefer: a coalition program or a single-firm program?

Abstract

Purpose This study aims to examine consumers’ responses to two types of loyalty programs: coalition and single-firm programs. This study explains the mechanism underlying the link between this program structure and consumers’ program evaluation by incorporating the type of firm offering the program (i.e. a more hedonic or a more utilitarian disposition), the type of rewards (i.e. presence/absence of experiential rewards) and consumers’ reactance. Design/methodology/approach Two online experiments were employed to test the proposed framework. Findings Consumers commonly preferred a coalition program to a single-firm program. This preference for the coalition program was strengthened when a utilitarian-dominant firm offered the program. Additionally, consumers evaluated the program lower when a utilitarian-dominant firm provided experiential rewards. Furthermore, situational reactance toward the program mediated the effect of the program structure on the program evaluation. Practical implications This study’s findings suggest that firms should consider whether the value consumers predominantly perceive from the firms is utilitarian or hedonic when launching coalition programs. Consumers may not be pleased by the coalition programs offered by hedonic-dominant firms as much as those provided by utilitarian-dominant firms. Moreover, this study’s results help design reward options. Consumers may not well evaluate the inclusion of experiential rewards when offered by utilitarian-dominant firms. For utilitarian-dominant firms, rewards requiring less time and effort may be more suitable. Originality/value This research significantly contributes to the literature on loyalty programs. This study showed that consumers viewed single-firm and coalition programs differently and elucidated the mechanism behind the response.

I'd better say something! How empathy shapes bystander psychological reactance and intervention to online trolling of service organizations

“…, 2021; Shoenberger et al. , 2021; Youn and Kim, 2019), these studies have predominately been situated in an advertising or loyalty program context (Shin and Casidy, 2021; Shirai, 2022), where the freedom of the individual is diminished. A unique insight of the current study is that psychological reactance can still be a key mediating mechanism felt by others witnessing the agency and freedom of another being diminished, as demonstrated through the online trolling of service organizations witnessed by bystanders in the current study.…”

“…When reviewing the literature related to psychological reactance as shown in Tables 1, it becomes apparent that most studies have examined this concept within online advertising (Ahn and Ham, 2022;Kim et al, 2021;Youn and Kim, 2019) or structuring of loyalty programs (Shin and Casidy, 2021;Shirai, 2022) and how it explains attitudinal evaluations and/or avoidance behaviors (Ahn and Ham, 2022;Kim et al, 2021;Youn and Kim, 2019). For instance, Youn and Kim (2019) demonstrate that psychological reactance mediates the relationship between intrusive advertising and advertising avoidance.…”

“…Specifically, this research begins to elucidate the psychological process which explains bystanders' reasoning for intervening in the online trolling of service organizations. While prior research has established psychological reactance as a key explanatory mechanism (Ahn and Ham, 2022;Kim et al, 2021;Shoenberger et al, 2021;Youn and Kim, 2019), these studies have predominately been situated in an advertising or loyalty program context (Shin and Casidy, 2021;Shirai, 2022), where the freedom of the individual is diminished. A unique insight of the current study is that psychological reactance can still be a key mediating mechanism felt by others witnessing the agency and freedom of another being diminished, as demonstrated through the online trolling of service organizations witnessed by bystanders in the current study.…”

“…, 2021; Youn and Kim, 2019). Further, research has indicated psychological reactance explains consumer responses to the structures of service relationships (Shin and Casidy, 2021; Shirai, 2022) which take away (or give) a sense of freedom and control. This research theorizes and empirically tests a new role of psychological reactance.…”

“…In the literature, psychological reactance has shown to provide an understanding of why consumers respond to online advertisements (Ahn and Ham, 2022;Feng et al, 2019;Shoenberger et al, 2021;Youn and Kim, 2019). Further, research has indicated psychological reactance explains consumer responses to the structures of service relationships (Shin and Casidy, 2021;Shirai, 2022) which take away (or give) a sense of freedom and control. This research theorizes and empirically tests a new role of psychological reactance.…”