The effects of loyalty programs in services – a double-edged sword?

2018 ◽  
Vol 32 (3) ◽  
pp. 300-310 ◽  
Author(s):  
Baolong Ma ◽  
Xiaofei Li ◽  
Lin Zhang
Keyword(s):  
Relationship Quality ◽  
Structural Equation ◽  
Qualitative Comparative Analysis ◽  
Customer Relationships ◽  
Loyalty Programs ◽  
Equation Modeling ◽  
Negative Consequences ◽  
Loyalty Program ◽  
Content Type ◽  
High Level

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.

Enhancing customer-brand relationship by leveraging loyalty program experiences that foster customer-brand identification

2020 ◽  
Vol 13 (12) ◽  
pp. 3991-4016
Author(s):  
Minjung Shin ◽  
Ki-Joon Back ◽  
Choong-Ki Lee ◽  
Young-Sub Lee
Keyword(s):  
Structural Equation ◽  
Loyalty Programs ◽  
Equation Modeling ◽  
Brand Identification ◽  
Loyalty Program ◽  
Cross Sectional ◽  
Content Type ◽  
Positive Effects ◽  
Brand Relationship ◽  
Cross Sectional Design

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.

The role of relationship quality and loyalty programs in building customer loyalty

2020 ◽  
Vol 35 (11) ◽  
pp. 1645-1657 ◽  
Author(s):  
Piotr Kwiatek ◽  
Zoe Morgan ◽  
Marsela Thanasi-Boçe
Keyword(s):  
Relationship Quality ◽  
Structural Equation ◽  
Small And Medium Enterprises ◽  
Measurement Model ◽  
Loyalty Programs ◽  
Equation Modeling ◽  
Company Performance ◽  
Relational Exchange ◽  
Content Type ◽  
Willingness To Recommend

Purpose Despite the abundance of B2B loyalty programs (LPs), the research on their interplay with relationship marketing is scarce. The purpose of this paper is to investigate a LP (a relational practice) on a transactional business market to test if and how a B2B LP affects relationship outcomes. Design/methodology/approach The study is based on dyadic research in a multi-theory framework. Data were collected from 200 small and medium enterprises that purchase office supplies from a company and merged with the company’s internal records.The formative-reflective measurement model is estimated using structural equation modeling – partial least squares (SEM-PLS). Findings Relationship quality (RQ) directly affects sales and customer share of wallet. The effect is strengthened by customer activity in a LP. RQ results directly in a longer tenure and willingness to recommend only for members of a LP. Research limitations/implications RQ is driven mainly by customer’s evaluation of prior experience with a supplier, while a LP is based on a forward-looking promise of a reward. The results of the study point to the level of customers’ activity in a LP as a boundary condition of the program’s efficacy. Practical implications RQ affects both attitudinal and behavioral outcomes but through distinct mechanisms. Once a supplier is a preferred one, LP membership strengthens the attitudinal outcome of a relationship. The effect of RQ on company performance is magnified by the level of customer activity in a LP but not by the membership status. Originality/value The theoretical framework integrates transaction costs, relational contract and relational exchange theories to investigate a LP on a transactional market. The study adds to the scant literature on LPs in business-to-business and provides evidence for similarities and differences in comparison to consumer research.

Value co-creation between consumers and distributors: the moderating effect of relationship characteristics

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Natalia Rubio ◽  
Nieves Villaseñor ◽  
Maria Jesús Yagüe
Keyword(s):  
Structural Equation ◽  
Service Innovation ◽  
Perceived Support ◽  
Equation Modeling ◽  
Loyalty Program ◽  
Content Type ◽  
Relationship Duration ◽  
High Level ◽  
Multigroup Structural Equation Modeling ◽  
Basic Level

PurposeAlthough value co-creation has been widely analyzed in digital contexts and various types of services (tourism, healthcare, etc.), it has received less study in the area of retail distribution. This study proposes that trust in the retailer and perceived support can encourage co-creation behavior on various levels: a basic level related to communication of service errors and a moderate-high level related to participation in service innovation. This study also proposes modeling for two different segments according to the participation in a loyalty program and according to the relationship duration.Design/methodology/approachA survey (N = 644) was used to test the model in the context of the consumer goods retail industry. Confirmatory factor analysis and multigroup structural equation modeling techniques were used to assess the proposed model.FindingsThe results show differences in the formation of co-creation behaviors depending on the customers analyzed. To encourage communication of service errors, customers affiliated to the program and customers with the longest customer-firm relationships must trust the distributor. Perceived support is crucial in encouraging feedback on service errors among non-affiliated and new customers. For promoting service innovation, the most significant antecedent is perceived support, followed by trust, independently of whether or not the customer belongs to the loyalty program. Customers with the longest relationship participate in co-innovation motivated equally by trust and perceived support. Customers with shorter relationship duration only participate in co-innovation if they perceived support.Originality/valueThis study contributes to deepening knowledge of co-creation behavior in the field of retail distribution. To date, research in this context has not considered the existence of various levels of co-creation: the basic level related to feedback on service errors and the moderate/high level related to participation in service co-innovation. Nor have studies tested the influence of trust and perceived support on these co-creation behaviors. Further, this study is the first study to integrate two significant variables that moderate retailers' strategy in the same model: membership in a loyalty program and duration of customer-firm relationship.

E-retailer cognitive and emotional relationship quality: their experiential antecedents and differential impact on brand evangelism

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ibrahim Al Nawas ◽  
Shadi Altarifi ◽  
Nabil Ghantous
Keyword(s):  
Relationship Quality ◽  
Social Presence ◽  
Structural Equation ◽  
Online Survey ◽  
Word Of Mouth ◽  
Equation Modeling ◽  
Growth Strategies ◽  
Content Type ◽  
The Difference ◽  
Brand Evangelism

PurposeLimited knowledge exists on the difference in the antecedents and outcomes of relationship quality's cognitive and emotional aspects for e-retailers. This research tests how utilitarian and hedonic shopping values differentially affect “cognitive and emotional” relationship quality components and how the latter differentially affects word-of-mouth and brand evangelism.Design/methodology/approachOnline survey data were collected from 450 Jordanian online shoppers. Structural equation modeling (AMOS 24.0) was employed to analyze the data.FindingsFirst, e-retailer's informativeness and transaction convenience (i.e. utilitarian values), drive more strongly cognitive than emotional relationship quality, whereas e-retailer's escapism and social presence (i.e. hedonic values) drive more strongly emotional than cognitive relationship quality. Second, emotional relationship quality has a strong significant effect on brand evangelism, whereas cognitive relationship quality's effect is insignificant. Third, there are no statistically significant differences concerning the effect of cognitive and emotional relationship quality on word-of-mouth.Originality/valueThe findings of our research are expected to enhance our understanding of e-retailer relationship quality, its emergence and consequences. They would also provide e-retailers with guidance on how to execute growth strategies by focusing on specific types of brand relationship quality, on the other hand.

Building trust by signaling trustworthiness in service retail

2014 ◽  
Vol 28 (5) ◽  
pp. 361-373 ◽  
Author(s):  
Husni Kharouf ◽  
Donald J. Lund ◽  
Harjit Sekhon
Keyword(s):  
Customer Loyalty ◽  
Structural Equation ◽  
Positive Impact ◽  
Past Research ◽  
Customer Relationships ◽  
Mediating Effect ◽  
Equation Modeling ◽  
Content Type ◽  
Survey Responses ◽  
Customer Trust

Purpose – The purpose of this paper is to investigate the role of retailer trustworthiness in driving customer trust and the subsequent impact on loyalty. The authors position trustworthiness as a mediator in the link between retail strategies and the development of trust. They model customer loyalty to the service retailer as a function of the trust created through trustworthy perceptions. Design/methodology/approach – The authors validate their model using 420 survey responses from customers in a service retail setting. Nine research hypotheses were tested using structural equation modeling. Alternate models are estimated, and the results provide support for the theory-based trustworthiness mediation model. Findings – Trustworthy behaviors first build trustworthiness, which then translates into customer trust and ultimately has a positive impact on both behavioral and attitudinal loyalty. Research limitations/implications – The research highlights the importance for retailers to signal their trustworthiness to build customer trust and loyalty. Researchers should measure trustworthiness perceptions when examining customer relationships and managers should plan strategically to develop both trust and trustworthiness with their customers. Originality/value – This study is one of the first to investigate the mediating effect of trustworthiness on customer loyalty in service settings. While past research has investigated dimensions of trustworthy behaviors, none has included a measure of trustworthiness perceptions and consumer trust in the same theoretical model. The results of the research provide important insights for both researchers and managers.

Customer centricity and guanxi prevalence as social capital: a study of international business relationships

2018 ◽  
Vol 33 (8) ◽  
pp. 1209-1220 ◽  
Author(s):  
Angeline Close Scheinbaum ◽  
Stephen W. Wang
Keyword(s):  
Structural Equation ◽  
Equation Modeling ◽  
Global Business ◽  
Global Marketing ◽  
Logistics Industry ◽  
Content Type ◽  
Global Logistics ◽  
High Level ◽  
Customer Centricity

Purpose This research blends perspectives of the Eastern phenomenon of guanxi with the more Western perspectives of relationship marketing and customer centricity. Extending scholarship on guanxi in marketing (e.g. Park and Luo, 2001; Sheu and Hu, 2009; Luo et al., 2008; Fowler and Reisenwitz, 2014), the objective is to highlight the indirect role of customer centricity (i.e. how visible or central it is for the business partner to communicate with/have information sharing with), for firms in regions with a prevalence of guanxi. Design/methodology/approach The empirical model is tested in context of global marketing in the business-to-business (B2B) logistics industry (n = 508). A total of 508 global logistics employees and managers with experience in global business participated in the survey in Taiwan. Structural equation modeling was used for data analysis with multi-group analyses. Findings Customer centricity intensifies positive outcomes of guanxi prevalence. Specifically, a high level of customer centricity strengthens established associations among guanxi prevalence, trust, relationship commitment and firm performance. Originality/value While most work on guanxi has a focus in China, this research focuses on Taiwan. While building on a wealth of literature, relatively less work has focused on customer centricity.

scholarly journals Do mistakes acceptance foster innovation? Polish and US cross-country study of tacit knowledge sharing in IT

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wioleta Kucharska
Keyword(s):  
Critical Thinking ◽  
Tacit Knowledge ◽  
Risk Taking ◽  
Structural Equation ◽  
Equation Modeling ◽  
Learning Climate ◽  
It Industry ◽  
Content Type ◽  
The Usa ◽  
High Level

Purpose This study aims to understand and compare how the mechanism of innovative processes in the information technology (IT) industry – the most innovative industry worldwide – is shaped in Poland and the USA in terms of tacit knowledge awareness and sharing driven by a culture of knowledge and learning, composed of a learning climate and mistake acceptance. Design/methodology/approach Study samples were drawn from the IT industry in Poland (n = 350) and the USA (n = 370) and analyzed using the structural equation modeling method. Findings True learning derives from mistake acceptance. As a result of a risk-taking attitude and critical thinking, the IT industry in the USA is consistently innovation-oriented. Specifically, external innovations are highly correlated with internal innovations. Moreover, a knowledge culture supports a learning culture via a learning climate. A learning climate is an important facilitator for learning from mistakes. Originality/value This study revealed that a high level of mistake acceptance stimulates a risk-taking attitude that offers a high level of tacit knowledge awareness as a result of critical thinking, but critical thinking without readiness to take a risk is useless for tacit knowledge capturing.

Green marketing programs as strategic initiatives in hospitality

2015 ◽  
Vol 29 (2) ◽  
pp. 81-92 ◽  
Author(s):  
Mark Scott Rosenbaum ◽  
Ipkin Anthony Wong
Keyword(s):  
Firm Value ◽  
Structural Equation ◽  
Economic Value ◽  
Green Marketing ◽  
Loyalty Programs ◽  
Equation Modeling ◽  
Content Type ◽  
The Impact ◽  
Guest Loyalty

Purpose – This paper aims to investigate a guest’s subjective appraisal of a hotel’s green marketing program, or green equity, along with value, brand and relationship equities on guest loyalty. Design/methodology/approach – Study 1 presents three models to explicate the role of a luxury hotel’s green initiatives in influencing guest loyalty. By means of structural equation modeling, one model emerges with the best fit. Study 2 examines how tourists assign economic value to a hotel’s green programs. Findings – Green equity plays a significant role in customers’ overall assessment of a hotel’s marketing programs; however, the effect is weaker when compared with the other indicators, including a hotel’s value proposition, brand image and loyalty programs. Furthermore, the results reveal that tourists are willing to pay a price premium for a hotel’s green marketing programs. Research limitations/implications – The paper links green marketing to the customer equity model and clarifies the impact of green marketing programs on loyalty and profitability. However, the study was conducted among luxury hotel guests and tourists in Macau, a leading gambling destination; thus, these customers might not have been concerned with green marketing initiatives. Practical implications – The results show that green initiatives are beneficial as long as managers include these initiatives in their overall strategic marketing programs that also promote firm value propositions, brand images and reputation. Originality/value – The paper clarifies the role of green marketing programs in hospitality and shows how hotels can benefit from enhanced guest loyalty and decreased operational expenses by implementing green initiatives.

Reciprocity and commitment in online travel communities

2019 ◽  
Vol 119 (2) ◽  
pp. 397-411 ◽  
Author(s):  
Daniel Belanche ◽  
Luis V. Casaló ◽  
Carlos Flavián ◽  
Miguel Guinalíu
Keyword(s):  
Social Exchange ◽  
Structural Equation ◽  
Social Exchange Theory ◽  
Active Participation ◽  
Equation Modeling ◽  
Relational Capital ◽  
Content Type ◽  
High Level ◽  
Online Travel

PurposeWith social exchange theory as a basis, the purpose of this paper is to seek a better understanding of advice processes in online travel communities, which offer crucial advice for travelers’ decisions. It also predicts that relational capital variables (commitment, reciprocity perceptions) moderate the main relationships.Design/methodology/approachData from a web survey of 456 users of online travel communities affirm the scale’s validity and provide the input for structural equation modeling and multisample analyses of the hypotheses.FindingsHigher levels of commitment reinforce the effect of following past advice on passive and active participation intentions. Users’ perceptions of reciprocity in the community strengthen the influence of following past advice on active participation. However, a high level of reciprocity causes users following past advice to reduce their intentions to continue following that advice.Practical implicationsManagement tactics should specify active and passive participation in online travel communities. Specifically, to encourage the creation of high-quality new content, community managers should create interactive environments marked by high levels of reciprocity and commitment.Originality/valueThis research elucidates the role of relational capital variables in advice processes and advances understanding of online travel communities.

The role of Islamic marketing ethics towards customer satisfaction

2019 ◽  
Vol 11 (4) ◽  
pp. 1001-1018 ◽  
Author(s):  
Aamir Abbas ◽  
Qasim Ali Nisar ◽  
Mahmood A. Husain Mahmood ◽  
Abderrahim Chenini ◽  
Ahsan Zubair
Keyword(s):  
Customer Satisfaction ◽  
Structural Equation ◽  
Scale Validation ◽  
Sampling Technique ◽  
Customer Relationships ◽  
Marketing Ethics ◽  
Equation Modeling ◽  
Islamic Banks ◽  
Ethical Perspective ◽  
Content Type

Purpose Islamic marketing ethics focus on the principles of equity, justice and value maximization for the welfare of society. These ethics play a vital role in elevating the standards of customer behavior. The strategy of focusing customer is now considered as important element because of rapidly changing marketing trends in Islamic banks. Therefore, the purpose of this study is to find out the important features of Islamic marketing ethics and identify their effect on customer’s satisfaction in Islamic banking. Design/methodology/approach This study is descriptive and quantitative. Data were collected from 1000 customers of Islamic banks by applying convenient sampling technique. Smart PLS was used to check the scale validation by confirmatory factor analysis. To test the hypotheses, structural equation modeling technique was used. Findings Results enlightened that Islamic marketing ethics play a significant role in enhancing the customer’s satisfaction. Islamic banks should focus on marketing mix along with Islamic and ethical perspectives to improve the customer’s satisfaction level. Practical implications This study highlighted that Islamic marketing ethics have great impact on customer satisfaction. Therefore, Islamic banks need to concentrate on the ethical perspective of Islamic marketing in order to develop long term customer relationships. Islamic banks need to revise their marketing practices, and they should align their marketing tactics with ethical Islamic boundaries. They need to design, communicate and enforce the code of Islamic ethics within organizations. Originality/value This paper fulfills an identified need to study how Islamic marketing ethics effect customer satisfaction.

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