Advertisement

Journal of the Academy of Marketing Science

, Volume 40, Issue 5, pp 625–638 | Cite as

Consequences of customer loyalty to the loyalty program and to the company

  • Heiner Evanschitzky
  • B. Ramaseshan
  • David M. Woisetschläger
  • Verena Richelsen
  • Markus Blut
  • Christof Backhaus
Original Empirical Research

Abstract

Gaining customer loyalty is an important goal of marketing, and loyalty programs are intended to help in reaching it. Research on loyalty programs suggests that customers differentiate between loyalty to a company and loyalty to a loyalty program, yet little is known about the consequences of these two types of loyalty. Therefore, our study intends to make two main contributions: (1) improving our understanding of the constructs “program loyalty” and “company loyalty”, (2) investigating the relative impact of the two types of loyalty on preference, intention, and purchase behavior for the case of a multi-firm loyalty program. Results indicate that company loyalty influences a customer’s choice to visit a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior. Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the store, more money is spent.

Keywords

Program loyalty Company loyalty Preference Intention Behavioral consequences 

Notes

Acknowledgements

The authors would like to thank Suman Basuroy, Vikas Mittal, and Florian von Wangenheim for their helpful comments on earlier versions of the manuscript.

References

  1. Adams, J. S. (1963). Toward an understanding of inequity. Journal of Abnormal and Social Psychology, 67(5), 422–436.CrossRefGoogle Scholar
  2. Adams, J. S. (1965). Inequity in social exchange. Advances in Experimental Social Psychology, 2, 267–299.CrossRefGoogle Scholar
  3. Ajzen, I. (1982). Equity in attitude formation and change. In J. Greenberg & R. L. Cohen (Eds.), Equity and justice in social behavior (pp. 161–186). New York: Academic.Google Scholar
  4. Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12(2), 125–143.CrossRefGoogle Scholar
  5. Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and profitability: findings from Sweden. Journal of Marketing, 58(July), 53–66.CrossRefGoogle Scholar
  6. Armstrong, S. J., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 14(August), 396–402.CrossRefGoogle Scholar
  7. Beatty, S. E., & Kahle, L. R. (1988). Alternative hierarchies of the attitude-behavior relationship: the impact of brand commitment and habit. Journal of the Academy of Marketing Science, 16(Summer), 1–10.CrossRefGoogle Scholar
  8. Beatty, S. E., Mayer, M., Coleman, J. E., Reynolds, K. E., & Lee, J. (1996). Customer-sales associate retail relationships. Journal of Retailing, 72(3), 223–247.CrossRefGoogle Scholar
  9. Beggs, A., & Klemperer, P. (1992). Multi-period competition with switching costs. Econometrica, 60(3), 651–666.CrossRefGoogle Scholar
  10. Beirne M (2008) Hotel loyalty programs increase in popularity. BRANDWEEK, August 22Google Scholar
  11. Berry, L. L. (1993). Playing fair in retailing. Arthur Anderson Retailing Issues Newsletter, 5, 5.Google Scholar
  12. Berry, L. L. (1995). Relationship marketing of services: growing interest, emerging perspectives. Journal of the Academy of Marketing Science, 23(Fall), 236–254.CrossRefGoogle Scholar
  13. Berry, L. L., & Parasuraman, A. (1991). Marketing services—competing through quality. New York: The Free Press.Google Scholar
  14. Blau, P. (1964). Exchange and power in social life. New York: Wiley.Google Scholar
  15. Bloemer, J., & Kasper, H. (1995). The complex relationship between consumer satisfaction and brand loyalty. Journal of Economic Psychology, 16(2), 311–329.CrossRefGoogle Scholar
  16. Bolton, R. N., Kannan, P. K., & Bramlett M. D. (2000). Implications of Loyalty Program Membership and Service Experiences for Customer Retention and Value. Journal of the Academy of Marketing Science, 28(1), 95–108.Google Scholar
  17. Bradach, J. L., & Eccles, R. G. (1989). Price, authority, trust: from ideal types to plural forms. Annual Review of Sociology, 15, 97–118.CrossRefGoogle Scholar
  18. Chaudhuri, A., & Holbrook, M. B. (2001). The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty. Journal of Marketing, 65, 81–93.CrossRefGoogle Scholar
  19. Cronin, J. J., Jr., & Taylor, S. A. (1992). Measuring service quality: a reexamination and extension. Journal of Marketing, 56, 68–81.CrossRefGoogle Scholar
  20. Delgado-Ballester, E., & Munuera-Aleman, J. L. (2001). Brand trust in the context of consumer loyalty. European Journal of Marketing, 35(11/12), 1238–1258.CrossRefGoogle Scholar
  21. De Wulf, K., Odekerken-Schroder, G., & Iacobucci, D. (2001). Investments on consumer relationships: a cross-country and cross-industry exploration. Journal of Marketing, 65, 33–50.CrossRefGoogle Scholar
  22. Dick, A. S., & Basu, K. (1994). Customer loyalty: toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22, 99–113.CrossRefGoogle Scholar
  23. Dowling, G., & Uncles, M. (1997). Do customer loyalty programs really work? Sloan Management Review, 38(4), 71–82.Google Scholar
  24. Evanschitzky, H., & Wunderlich, M. (2006). An examination of moderator effects in the four-stage loyalty model. Journal of Service Research, 8(4), 330–345.CrossRefGoogle Scholar
  25. Evanschitzky, H., Iyer, G. R., Plaßmann, H., Nießing, J., & Meffert, H. (2006). The relative strength of affective commitment in securing loyalty in service relationships. Journal of Business Research, 59(12), 1207–1213.CrossRefGoogle Scholar
  26. Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18, 39–50.CrossRefGoogle Scholar
  27. Fournier, S., Dobscha, S., & Mick, D. G. (1998). Preventing the premature death of relationship marketing. Harvard Business Review, 76(1), 42–45.Google Scholar
  28. Fox, A. (1974). Beyond contract: Work, power and trust relationships. London: Faber.Google Scholar
  29. Fullerton, G. (2003). When does commitment lead to loyalty? Journal of Service Research, 5(4), 333–344.CrossRefGoogle Scholar
  30. Garbarino, E., & Johnson, M. S. (1999). The different roles of satisfaction, trust, and commitment in customer relationships. Journal of Marketing, 63(April), 70–87.CrossRefGoogle Scholar
  31. Goodwin, C. (1997). Communality as a dimension of service relationships. Journal of Consumer Psychology, 5(4), 387–415.CrossRefGoogle Scholar
  32. Goodwin, C., & Gremler, D. D. (1996). Friendship over the counter: How social aspects of service encounters influence consumer service loyalty. In T. A. Swartz, D. E. Bowen, & S. W. Brown (Eds.), Advances in services marketing and management, vol. 5 (pp. 247–282). Greenwich: JAI.CrossRefGoogle Scholar
  33. Greene, H. W. (2007). Econometric analysis (6th ed.). Upper Saddle River: Prentice Hall.Google Scholar
  34. Gundlach, G. T., Archol, R. S., & Mentzer, J. T. (1995). The structure of commitment in exchange. Journal of Marketing, 59, 78–92.CrossRefGoogle Scholar
  35. Gwinner, K., Gremler, D., & Bitner, M. J. (1998). Relational benefits in service industries: the customer’s perspective. Journal of the Academy of Marketing Science, 26(2), 101–114.CrossRefGoogle Scholar
  36. Hair, J., Black, W. C., Babin, B., Anderson, R. E., & Tatham, R. L. (2006). Multivariate data analysis (6th ed.). Prentice Hall: Englewood Cliffs.Google Scholar
  37. Harris, L. C., & Goode, M. M. H. (2004). The four levels of loyalty and the pivotal role of trust: a study of online service dynamics. Journal of Retailing, 80(2), 139–158.CrossRefGoogle Scholar
  38. Harrison-Walker, J. (2001). The measurement of word-of-mouth communication and an investigation of service quality and customer commitment as potential antecedents. Journal of Service Research, 4, 60–75.CrossRefGoogle Scholar
  39. Hennig-Thurau, T., Gwinner, K. P., & Gremler, D. D. (2002). Understanding relationship marketing outcomes: an integration of relational benefits and relationship quality. Journal of Service Research, 4(3), 230–247.CrossRefGoogle Scholar
  40. Jones, M. A., Mothersbaugh, D. L., & Beatty, S. E. (2000). Switching barriers and purchase intentions in services. Journal of Retailing, 76(2), 259–274.CrossRefGoogle Scholar
  41. Kumar, V., & Reinartz, W. J. (2006). Customer relationship management: A databased approach. New York: Wiley.Google Scholar
  42. Kumar, N., Stern, L. W., & Steenkamp, J.-B. E. M. (1995). The effects of perceived interdependence on dealer attitudes. Journal of Marketing Research, 32, 348–356.CrossRefGoogle Scholar
  43. Leenheer, J., van Heerde, H. J., Bijmolt, T. H. A., & Smidts, A. (2007). Do loyalty programs really enhance behavioral loyalty? An empirical analysis accounting for self-selected members. International Journal of Research in Marketing, 24, 31–47.CrossRefGoogle Scholar
  44. Liu, Y. (2007). The long-term impact of loyalty programs. Journal of Marketing, 71, 19–35.CrossRefGoogle Scholar
  45. Meyer-Waarden, L. (2007). The effects of loyalty programs on customer lifetime duration and share of wallet. Journal of Retailing, 83(2), 223–236.CrossRefGoogle Scholar
  46. Moorman, C., Zaltman, G., & Deshpande, R. (1992). Relationships between providers and users of market research: the dynamics of trust within and between organizations. Journal of Marketing Research, 29, 314–329.CrossRefGoogle Scholar
  47. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship management. Journal of Marketing, 58, 20–38.CrossRefGoogle Scholar
  48. Netemeyer, R. G., Krishnan, B., Pullig, C., Wang, G., Yagci, M., & Dean, D. (2004). Developing and validating measures of facets of customer-based brand equity. Journal of Business Research, 57(2), 209–224.CrossRefGoogle Scholar
  49. O’Brien, L., & Jones, C. (1995). Do rewards really create loyalty? Harvard Business Review, 73(3), 75–85.Google Scholar
  50. Oliver, R. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research, 17, 460–469.CrossRefGoogle Scholar
  51. Oliver, R. (1997). Satisfaction: A behavioural perspective on the consumer. New York: Irwin McGraw-Hill.Google Scholar
  52. Oliver, R. (1999). Whence consumer loyalty. Journal of Marketing, 63, 33–44.CrossRefGoogle Scholar
  53. Palmatier, R. W., & Gopalakrishna, S. (2005). Determining the payoff from relationship marketing programs. Marketing Science Institute Working Paper Series, Issue 1(05–001), 49–70.Google Scholar
  54. Parasuraman, A., & Grewal, D. (2000). The impact of technology on the quality-value- loyalty-chain: a research agenda. Journal of the Academy of Marketing Science, 28(December), 168–174.CrossRefGoogle Scholar
  55. Patterson, P. G., & Smith, T. (2003). A cross-cultural study of switching barriers and propensity to stay with service providers. Journal of Retailing, 79(2), 107–120.CrossRefGoogle Scholar
  56. Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.CrossRefGoogle Scholar
  57. Reinartz, W. J., & Kumar, V. (2003). The impact of customer relationship characteristics on profitable lifetime duration. Journal of Marketing, 67, 77–99.CrossRefGoogle Scholar
  58. Reynolds, K. E., & Beatty, S. E. (1999). A relationship customer typology. Journal of Retailing, 75(4), 509–524.CrossRefGoogle Scholar
  59. Rust, R. T., Lemon, K. N., & Zeithaml, V. A. (2004). Return on marketing: using customer equity to focus marketing strategy. Journal of Marketing, 68, 109–127.CrossRefGoogle Scholar
  60. Sherman, S. (1992). Are strategic alliances working? Fortune, September, 77–78.Google Scholar
  61. Shugan, S. (2005). Brand loyalty programs: are they shams? Marketing Science, 24, 185–193.CrossRefGoogle Scholar
  62. Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66(1), 15–37.CrossRefGoogle Scholar
  63. Szymanski, D. M., & Henard, D. H. (2001). Customer satisfaction: a meta-analysis of the empirical evidence. Journal of the Academy of Marketing Science, 29, 16–35.Google Scholar
  64. Taylor, G. A., & Neslin, S. A. (2005). The current and future sales impact of a retail frequency reward program. Journal of Retailing, 81(4), 293–305.CrossRefGoogle Scholar
  65. The Economist (2002). Frequent-flyer economics (May 4), 62.Google Scholar
  66. Thibaut, J., & Kelley, H. (1959). The social psychology of groups. New York: Wiley.Google Scholar
  67. Uncles, M. D., Dowling, G. R., & Hammond, K. (2003). Customer loyalty and customer loyalty programs. Journal of Consumer Marketing, 20(4), 294–316.CrossRefGoogle Scholar
  68. Verhoef, P. (2003). Understanding the effect of customer relationship management efforts on customer retention and customer share development. Journal of Marketing, 67, 30–45.CrossRefGoogle Scholar
  69. Verhoef, P., Langerak, F., & Donkers, B. (2007). Understanding brand and dealer retention in the new car market: the moderating role of brand tier. Journal of Retailing, 83(1), 97–113.CrossRefGoogle Scholar
  70. Vogel, V., Evanschitzky, H., & Ramaseshan, B. (2008). Customer equity drivers and future sales. Journal of Marketing, 72, 98–108.CrossRefGoogle Scholar
  71. Wendlandt, M., & Schrader, U. (2007). Consumer reactance against loyalty programs. Journal of Consumer Marketing, 24(5), 293–304.Google Scholar
  72. Wirtz, J., Mattila, A. S., & Lwin, M. O. (2007). How effective are loyalty reward programs in driving share of wallet? Journal of Service Research, 9, 327–334.CrossRefGoogle Scholar
  73. Yang, Z., & Peterson, R. T. (2004). Customer perceived value, satisfaction, and loyalty: the role of switching costs. Psychology and Marketing, 21(10), 799–822.CrossRefGoogle Scholar
  74. Yi, Y., & Jeon, H. (2003). Effects of loyalty programs on value perception, program loyalty, and brand loyalty. Journal of the Academy of Marketing Science, 31(June), 229–240.CrossRefGoogle Scholar
  75. Zeithaml, V. A. (1988). Consumer perceptions of price, quality and value: a means-end model and synthesis of evidence. Journal of Marketing, 52, 2–22.CrossRefGoogle Scholar
  76. Zeithaml, V. A. (2000). Service quality, profitability, and the economic worth of customers: what we know and what we need to learn. Journal of the Academy of Marketing Science, 28(1), 67–85.CrossRefGoogle Scholar
  77. Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of service quality. Journal of Marketing, 60, 31–46.CrossRefGoogle Scholar

Copyright information

© Academy of Marketing Science 2011

Authors and Affiliations

  • Heiner Evanschitzky
    • 1
  • B. Ramaseshan
    • 2
  • David M. Woisetschläger
    • 3
  • Verena Richelsen
    • 4
  • Markus Blut
    • 5
  • Christof Backhaus
    • 3
  1. 1.Aston Business School, Marketing GroupAston UniversityAston Triangle, BirminghamUK
  2. 2.School of MarketingCurtin UniversityPerthAustralia
  3. 3.Technische Universität BraunschweigInstitute of Automotive Management and Industrial ProductionBraunschweigGermany
  4. 4.Gelsenkirchen University of Applied SciencesBocholtGermany
  5. 5.Department of MarketingTU Dortmund UniversityDortmundGermany

Personalised recommendations