The power of e-commerce

2019 ◽  
Vol 31 (4) ◽  
pp. 1906-1923 ◽  
Author(s):  
Nan Hua ◽  
Stephen Hight ◽  
Wei Wei ◽  
Ahmet Bulent Ozturk ◽  
Xinyuan (Roy) Zhao ◽  
...  
Keyword(s):  
Asset Allocation ◽  
Operating Performance ◽  
Loyalty Programs ◽  
Integrative Model ◽  
Loyalty Program ◽  
Content Type ◽  
Hotel Managers ◽  
The Impact ◽  
Practical Implications ◽  
Allocation Strategies

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.

scholarly journals Estimating the price range and the effect of price bundling strategies

2019 ◽  
Vol 29 (2) ◽  
pp. 166-181 ◽  
Author(s):  
Sérgio Dominique-Ferreira ◽  
Cristina Antunes
Keyword(s):  
Market Share ◽  
Design Methodology ◽  
Price Sensitivity ◽  
Content Type ◽  
Price Range ◽  
Price Bundling ◽  
Hotel Managers ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to investigate and identify the price sensitivity of consumers of three- and five-star hotels and to determine the impact of bundling strategies on consumers’ price sensitivity. Design/methodology/approach To calculate price sensitivity, authors apply the van Westendorp’s price sensitivity meter (PSM). To understand the impact of bundling strategies, univariate and bivariate techniques are applied. Findings PSM results reveal the optimal prices and the range of acceptable prices for three- and five-star hotel. The bundling strategy results reveal that five-star customers are less sensitive to mixed-leader bundling. Regarding mixed-joint bundling, managers could improve sales through bundling strategies if they selected an attractive service (e.g. restaurants). Practical implications Findings assist hotel managers to understand the different price sensitivities, according to the hotel typology. Managers can manage prices without the risk of losing market share or revenue. The results help managers in deciding which bundling strategies they can create, as well as the services to be included to achieve highest profitability. Originality/value No research to date to the best of the authors’ knowledge has attempted to understand and compare the role of bundling strategies in three- and five-stars hotels. Moreover, no research has attempted to measure and compare customers’ price sensitivity of three- and five-stars hotels.

Loyalty program activity: make B2B customers buy more

2019 ◽  
Vol 37 (5) ◽  
pp. 542-554 ◽  
Author(s):  
Piotr Kwiatek ◽  
Marsela Thanasi-Boçe
Keyword(s):  
Loyalty Programs ◽  
Purchasing Behavior ◽  
Loyalty Program ◽  
Content Type ◽  
Logistic Regression Models ◽  
Program Activity ◽  
Consumer Markets ◽  
Business Customers ◽  
The Impact ◽  
Business To Business

Purpose Loyalty programs (LPs) in a business-to-business (B2B) context have been under-researched when compared to consumer markets. The purpose of this paper is to investigate if and to what extent the loyalty program activity (LPA) based on recency, frequency and monetary framework reflects the effectiveness of a specific LP. Design/methodology/approach Using the data obtained from 818 business customers enrolled in a LP, logistic regression models are run to find the impact of LPA on the company’s sales. Findings The results suggest that in a linear LP, the frequency of rewards impacts sales the most, compared to recency and amount of points redeemed. The intensity of a LPA is influencing the expected sales in a company. Research limitations/implications The current study is not focused on the redemption patterns and the value of the rewards offered in the program. Limitation of the study only to one country and in a single company does not allow to generalize presented findings. Practical implications Companies should focus their efforts on defining the best level of frequency rewards in their LPs. Reward timing should be considered as a factor that influences the change in customer purchasing behavior more than the amount of points accumulated. Originality/value The research provides empirical evidence to support the highest influence of frequency of rewards on sales, compared to recency and amount of points redeemed. This is one of the few LP studies conducted in the context of the B2B market.

Different status reevaluation period and communication styles for top-tier and bottom-tier customers in multi-tier loyalty programs

2020 ◽  
Vol 54 (12) ◽  
Author(s):  
Woojung Chang
Keyword(s):  
Loyalty Programs ◽  
Communication Style ◽  
Communication Styles ◽  
Loyalty Program ◽  
Evaluation Period ◽  
Content Type ◽  
Mediating Role ◽  
Loyalty Intentions ◽  
Research Stream ◽  
Practical Implications

Purpose 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. Design/methodology/approach 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. Findings 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. Research limitations/implications 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. Practical implications 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. Originality/value This study is among the first to explore the possible varying effects of differential demotion policy and communication style on different tiers of customers.

Do loyalty programs really matter for hotel operational and financial performance?

2018 ◽  
Vol 30 (5) ◽  
pp. 2195-2213 ◽  
Author(s):  
Nan Hua ◽  
Wei Wei ◽  
Agnes L. DeFranco ◽  
Dan Wang
Keyword(s):  
Financial Performance ◽  
Performance Indicators ◽  
Performance Indicator ◽  
Positive Impact ◽  
Empirical Support ◽  
Loyalty Programs ◽  
Loyalty Program ◽  
Cross Sectional ◽  
Content Type ◽  
The Impact

PurposeThis study aims to use a sample of 2,120 individual hotel properties between 2011 and 2013 to evaluate the impact of loyalty programs on hotel operational and financial performance.Design/methodology/approachThis study provides empirical support for the impact of loyalty program based on both cross-sectional and panel data analyses and uses the instrumental variable technique to avoid potential heteroscedasticity, autocorrelation and simultaneity issues.FindingsFindings of this study show that loyalty program expenses have a significant and positive impact on all three operational performance indicators of RevPAR, ADR and Occupancy and the financial performance indicator of gross operating profit.Research limitations/implicationsThis study suggests that the benefits of loyalty programs should be understood against the backdrop of a reasonable set of controlled variables such as e-commerce, franchise, advertising, other marketing expenses, hotel size and hotel chain scales.Originality/valueGiven the conflicting viewpoints about the positive and negative impacts of loyalty programs, and that the literature is scant on empirical validation of the impact of loyalty programs on the overall operational and financial performance of hotel properties, this study is an early attempt to empirically test the impact of loyalty programs on a number of hotel operational and financial performance indicators by using an extensive list of individual hotel properties between 2011 and 2013.

The influence of a “green” loyalty program on service encounter satisfaction

2016 ◽  
Vol 30 (6) ◽  
pp. 576-585 ◽  
Author(s):  
Stephanie Q. Liu ◽  
Anna S. Mattila
Keyword(s):  
Bystander Effect ◽  
Loyalty Programs ◽  
Service Encounter ◽  
Service Firms ◽  
Preferential Treatment ◽  
Loyalty Program ◽  
Content Type ◽  
Positive Effects ◽  
Customer Type ◽  
The Impact

Purpose Presently, loyalty programs often offer preferential treatment to the firm’s best customers, and recently, service firms started to incorporate corporate social responsibility (CSR) initiatives into the loyalty reward programs (e.g. Starwood’s “Make A Green Choice”). However, academic research advancing the understanding of the effectiveness of CSR-focused loyalty programs is lacking. To bridge that gap, this paper aims to examine the influence of a “green” loyalty program on members’ and bystanders’ service encounter satisfaction in light of preferential treatment. Furthermore, this paper investigates the psychological mechanisms (prosociality perceptions and status perceptions) that underlie these effects. Design/methodology/approach This study used a 2 (loyalty program: green vs standard) × 2 (customer type: member vs bystander) × 2 (observability of preferential treatment: low vs high) between-subjects experimental design. Respondents were asked to read a hotel check-in scenario and then completed scales that measured their perceptions and evaluations of the service encounter. Findings Results from this study suggest that a green loyalty program can buffer the negative effect of preferential treatment on bystanders’ service encounter satisfaction. An examination of the underlying mechanism reveals that prosociality perceptions of the firm mediate the impact of loyalty programs on bystanders’ satisfaction. As expected, the results show that a green loyalty program is as effective as a standard program in elevating members’ satisfaction. Furthermore, findings from a moderated mediation analysis indicate that status perceptions mediate the impact of customer type on satisfaction. However, status perceptions have a greater leveraging power in satisfaction when observability of preferential treatment is high. Originality/value The results of this study have significant implications for service firms with loyalty programs and customer prioritization practices. By incorporating CSR into their loyalty programs, firms may be able to mitigate the negative bystander effect while maintaining the positive effects of preferential treatment on members’ service encounter satisfaction.

The impact of communication channels on communication style and information quality for hotel loyalty programs

2016 ◽  
Vol 7 (1) ◽  
pp. 100-116 ◽  
Author(s):  
Orie Berezan ◽  
Michelle Yoo ◽  
Natasa Christodoulidou
Keyword(s):  
Communication Channel ◽  
Online Survey ◽  
Information Quality ◽  
Communication Channels ◽  
Loyalty Programs ◽  
Communication Style ◽  
Loyalty Program ◽  
Content Type ◽  
Study Results ◽  
The Impact

Purpose – The purpose of this study is to evaluate the impact of communication channels on communication style and information quality as perceived by loyalty program members. Design/methodology/approach – An online survey was utilized to collect data, and multivariate analysis of variance was used to test the study hypothesis. Findings – Study results indicated that the choice of a communication channel has a significant impact on the perceived communication style and information quality. Research limitations/implications – The use of an online survey restricted the ability to generalize findings beyond those that use the internet. Replicating this study in other areas where customers seek information outside of loyalty programs would provide valuable insight into the impact of communication channels on communication style and perceived quality of communication. Practical implications – Communication style and information quality have been shown to impact customer loyalty. The results of this study indicate that the type of communication channel used impacts style and information quality, and thereby loyalty. Social implications – Executives should use these research findings as a guide to how they should structure and maintain relationships with their loyalty members. Originality/value – This manuscript provides executives with a taxonomy of the tools and channels available for communicating information to loyalty program members.

Exploring effects of hotel chain loyalty program

2014 ◽  
Vol 8 (4) ◽  
pp. 375-387 ◽  
Author(s):  
Pedro Pimpão ◽  
Antónia Correia ◽  
João Duque ◽  
José Carlos Zorrinho
Keyword(s):  
Customer Relationship ◽  
Loyalty Programs ◽  
Loyalty Program ◽  
Content Type ◽  
Purchase Frequency ◽  
Hotel Chains ◽  
Dirichlet Model ◽  
Hotel Chain ◽  
Practical Implications

Purpose – The main purpose of this work is to evaluate the long-term effectiveness of a hotel’s chain loyalty program from a behavioral perspective. Design/methodology/approach – A Dirichlet model was estimated to assess purchase frequency and hotel choice within one of the biggest hotel chains in Portugal. The sample comprises hotels where a loyalty program was implemented, with a total of 176,099 reservations. Data were extracted from the customer relationship management (CRM) systems of the hotel group. Findings – The results suggest that instead of being loyal to a certain hotel, customers are loyal to the branded hotel chain. As the hotels are all part of the branded group, this polygamy is not only accepted but also very welcome. Research limitations/implications – The level of penetration and purchase frequency of CRM was measured. Nevertheless, a thorough understanding of these will be critical for the success of this program. Practical implications – This research is a step toward assessing hotel chain competitiveness, by improving and suggesting segmented groups of brands/hotels and to induce cross-selling products accepting polygamous loyalty as the only way to sustain long-term relationships with customers. Originality/value – This is one of the few research studies, if not the only one, to assess loyalty with tangible indicators, such as purchase frequency. Further, the results suggest that loyalty programs are more effective if multiple options are available and as such, cross-selling is perhaps the only way to fix customers.

Transitioning loyalty programs

2015 ◽  
Vol 27 (3) ◽  
pp. 415-430 ◽  
Author(s):  
John T Bowen ◽  
Shiang-Lih Chen McCain
Keyword(s):  
Baby Boomers ◽  
Customer Loyalty ◽  
Design Methodology ◽  
Loyalty Programs ◽  
Review Of Literature ◽  
Content Type ◽  
Major Shift ◽  
Antecedents And Consequences ◽  
Hotel Managers ◽  
Practical Implications

Purpose – The purpose of this study is to reflect on Bowen and Chen’s study and provide insight for researchers to help them build loyalty models that will fit the consumer behavior of Millennials and managers as they build customer loyalty with Millennials. In 2001, Bowen and Chen developed and implemented a research framework for hotel managers to identify attributes that will increase customer loyalty. Since 2001, a major shift has taken place: demographically, as Baby Boomers retire and pass on, Millennials will become the dominant generational segment. Design/methodology/approach – The authors use a review of literature to accomplish its purpose. Findings – The authors argue that the loyalty models developed for Boomers will not be a good fit for Millennials. Three propositions are presented in the paper to help researchers develop models that will explain the customer loyalty of Millennials. Research limitations/implications – Implications are presented for researchers wishing to investigate the antecedents and consequences of loyalty for Millennials. Practical implications – The transition from Boomers to Millennials creates a number of opportunities and challenges for managers, which are discussed in the paper. Originality/value – There has been a dearth of empirical research on customer loyalty models developed for Millennials. This paper is a commentary on past models developed for Boomers and the transition needed to develop models for Millennials. It is hoped this dialogue will spawn research that develops loyalty models for Millennials.

scholarly journals Framing as status or benefits?

2016 ◽  
Vol 50 (3/4) ◽  
pp. 488-508 ◽  
Author(s):  
Mauricio Palmeira ◽  
Nicolas Pontes ◽  
Dominic Thomas ◽  
Shanker Krishnan
Keyword(s):  
High Frequency ◽  
Negative Impact ◽  
Message Framing ◽  
Low Frequency ◽  
Past Research ◽  
Loyalty Programs ◽  
Fundamental Aspect ◽  
Loyalty Program ◽  
Content Type ◽  
The Impact

Purpose A fundamental aspect of hierarchical loyalty programs is that some consumers get rewards that others do not. Despite the widespread use of such programs, academics have long debated whether these benefits are outweighed by the potential negative impact of the differential treatment of customers. This study aims to extend our understanding, examining the impact of message framing on consumers’ reactions to hierarchical loyalty structures. Design/methodology/approach Three online studies were conducted. Study 1 uses advertisements to manipulate the message frame’s emphasis (benefits vs status). Study 2 manipulates consumers’ frame of thought by directing their attention to either changes in benefits or status. Finally, Study 3 uses the proposed framework to reconcile contradictory findings from past research. Findings Low-frequency customers who do not expect to qualify for a superior customer tier tend to reject hierarchical programs when thinking about status. In contrast, when these customers think about concrete rewards, loyalty program messages produce no negative reactions. High-frequency customers are positively affected by communication regardless of the type of benefits framed. Research limitations/implications All studies were done online, potentially limiting the external validity of the results. Nevertheless, the impact of message framing on perceptions about the loyalty program seems to be quite robust across different studies and manipulations. Practical implications When communicating with low-frequency customers, managers should avoid promising status; customers should instead be motivated based on concrete rewards. High-frequency customers are indifferent to alternative emphasis of communication frames. Originality/value Marketing academics have acknowledged the importance of being able to reward top customers without demotivating light and moderate users. This research is the first to provide a solution to this issue.

Spillover effects of marketing expertise on market performance of domestic firms and MNEs in emerging markets

2016 ◽  
Vol 54 (1) ◽  
pp. 107-129 ◽  
Author(s):  
Qiang (Steven) Lu ◽  
Chinmay Pattnaik ◽  
Mengze Shi
Keyword(s):  
Multinational Enterprises ◽  
Market Performance ◽  
Spillover Effects ◽  
Loyalty Programs ◽  
Domestic Firm ◽  
Gasoline Market ◽  
Loyalty Program ◽  
Content Type ◽  
Domestic Firms ◽  
The Impact

Purpose – The purpose of this paper is to study the spillover effects of marketing expertise on the market performance of domestic firms and multinational enterprises (MNEs). Specifically, this study examines how the adoption of frequency loyalty programs by a domestic firm following an MNE affects the competitive dynamics and the market performance of both firms in a Chinese retail gasoline market. Design/methodology/approach – This study is based on empirical data that were obtained from a quasi-field experiment in which the MNE entered the market with a frequency loyalty program and the domestic firm later responded with a similar loyalty program. The authors measured the impact of the adoption of a frequency loyalty program by the domestic firm on the market performance of both the domestic firm and the MNE. Findings – The authors find that the domestic firm’s adoption of a similar loyalty program significantly increased its market share in the regular gasoline market. The domestic firm’s adoption of a loyalty program also increased the market performance of the MNE in the premium gasoline market. Originality/value – This study explicitly demonstrates the spillover benefits through demonstration effects and provides empirical evidence on specific spillover benefits to domestic firms and MNEs based on their competencies in distinct market segments where they compete.

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