A consumers’ evaluation of different loyalty program mechanisms

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Purpose – There is still little known about why consumers enroll in loyalty programs and how they experience being enrolled. This study investigates which benefits consumers look for in loyalty programs. Furthermore it investigates if there is a difference in how consumers perceive loyalty programs that use the points-pressure mechanism and loyalty programs that use the rewarded behavior mechanism and what these differences are. Methodology – To collect data 14 in-depth interviews were conducted. To encode the transcripts of these interviews the inductive coding method was used. Findings – The consumer does evaluate loyalty programs that use the points-pressure mechanism and loyalty programs that use the rewarded behavior mechanism differently. Results of this study show that loyalty program that use the points-pressure bring the consumer more utilitarian benefits, whereas loyalty programs that use the rewarded behavior mechanism bring the consumer more hedonic benefits. Theoretical implications – This study brings new insights to the current literature, since it shows that the different mechanisms that can be used in loyalty programs do influence the consumer in different ways. Whereas before, there were only some insights into which types of benefits a consumer can perceive from being enrolled in a loyalty program, this study gives insights into which specific benefits a consumers can perceive from being in a loyalty program and in which cases this occurs. Practical implications – The results of this study can be beneficial for managers in the practical field, since it gives insights in to which parts of the currently used loyalty program consumers do and do not like. Implementing the results into the design of loyalty programs could attract more consumers to enroll in them. Social implications – This research can help consumers to perceive more fun by being enrolled in loyalty programs and feel more appreciated by organization. In the end, this research will encourage organizations to use their customer data better, to tailor their collection to the wants and needs of the consumer. Keywords – Loyalty programs, points-pressure mechanism, rewarded behavior mechanism Paper type – Research Paper
Faculteit der Managementwetenschappen