When customers are members: Customer retention in paid membership contexts

  • C. B. Bhattacharya
Article

Abstract

This article seeks to gain an understanding of how members’ characteristics relate to lapsing behavior in paid membership contexts. Literatures such as social identity theory are used to propose hypotheses that are tested using a hazard rate model on archival data pertaining to 7,798 members of an art museum. The results indicate that the hazard of lapsing is lowered with increasing duration, participation in special interest groups whose goals are related to those of the focal organization, gift frequency, and increasing interrenewal times. Conversely, members who have downgraded their membership level in the past, those who have participated in special interest groups whose goals are unrelated to those of the focal organization, and those who received their membership as a gift are more likely to lapse.

References

  1. Aaker, David. 1994. “Building a Brand: The Saturn Story,”California Management Review 36 (2): 114.Google Scholar
  2. Allison, Paul. 1984.Event History Analysis. Beverly Hills, CA: Sage.Google Scholar
  3. “ASAE’s Top 100: Who Ranks Where in Terms of Membership and Staff Size?” 1994.Association Management 46 (May).Google Scholar
  4. Belk, Russell W. 1988. “Possessions and the Extended Self.”Journal of Consumer Research 15 (September): 139–168.CrossRefGoogle Scholar
  5. Bendapudi, Neeli, Surendra N. Singh, and Venkat Bendapudi. 1996. “Enhancing Helping Behavior: An Integrative Framework for Promotion Planning.”Journal of Marketing 60 (3): 33–49.CrossRefGoogle Scholar
  6. Benjamin, Maynard H. 1993. “A Membership Management That Makes a Difference.”Association Management, September, p. 26.Google Scholar
  7. Bhattacharya, C. B., Hayagreeva Rao, and Mary Ann Glynn. 1995. “Understanding the Bond of Identification: An Investigation of Its Correlates Among Art Museum Members.”Journal of Marketing 59 (October): 46–57.CrossRefGoogle Scholar
  8. Bolton, Ruth N. 1996. “Linking Customer Satisfaction to Loyalty and Revenues.” Working Paper, University of Maryland, College Park, MD.Google Scholar
  9. Campbell, Alexandra J., and David T. Wilson. 1996. “Managed Networks: Creating Strategic Advantage.” InNetworks in Marketing, Ed. Dawn Iacobucci. Thousand Oaks, CA: Sage.Google Scholar
  10. Cross, Richard H. 1992. “Five Degrees of Customer Bonding.”Direct Marketing 55 (6): 33–35.Google Scholar
  11. Cunningham, R. M. 1956. “Brand Loyalty—What, Where, and How Much?”Harvard Business Review 34 (January–February): 116–128.Google Scholar
  12. Dillman, Don A. 1977.Mail and Telephone Surveys. New York: John Wiley.Google Scholar
  13. Drumwright, Minette E. 1994. “Socially Responsible Organizational Buying: Environmental Buying as a Noneconomic Buying Criterion.”Journal of Marketing 58 (3): 1–19.CrossRefGoogle Scholar
  14. Dutton, Jane E., Janet M. Dukerich, and Celia V. Harquail. 1994. “Organizational Images and Member Identification.”Administrative Science Quarterly 39: 239–263.CrossRefGoogle Scholar
  15. DuWors, Richard E. Jr., and George H. Haines Jr. 1990. “Event History Analysis Measures of Brand Loyalty.”Journal of Marketing Research 27 (November): 485–493.CrossRefGoogle Scholar
  16. Ehrenberg, Andrew S. C. 1988.Repeat Buying: Fact, Theory and Applications. London: Charles Griffin. New York: Oxford University Press.Google Scholar
  17. Fader, Peter S., and David C. Schmittlein. 1993. “Excess Behavioral Loyalty for High-Share Brands: Deviations From the Dirichlet Model for Repeat Purchasing.”Journal of Marketing Research 30 (November): 478–493.CrossRefGoogle Scholar
  18. Glynn, Mary Ann, C. B. Bhattacharya, and Hayagreeva Rao. 1996. “Art Museum Membership and Cultural Distinction: Relating Members’ Perceptions of Prestige to Benefit Usage.”Poetics: Journal of Empirical Research on Literature, Media and the Arts [Special issue on Museum Research] Ed. Paul DiMaggio. 24:259–274.Google Scholar
  19. Gruen, Thomas W., and Jeffrey M. Ferguson. 1994. “Using Membership as a Marketing Tool: Issues and Applications.” Paper presented at the Relationship Marketing Conference, American Marketing Association, June, Atlanta, GA.Google Scholar
  20. Gupta, Sunil. 1991. “Stochastic Models of Interpurchase Time With Time-Dependent Covariates.”Journal of Marketing Research 28: 1–15.CrossRefGoogle Scholar
  21. Hall, Douglas T., and Benjamin Schneider. 1972. “Correlates of Organizational Identification as a Function of Career Pattern and Organizational Type.”Administrative Science Quarterly 17 (34): 340–350.CrossRefGoogle Scholar
  22. Helsen, Kristiaan, and David C. Schmittlein. 1993. “Analyzing Duration Times in Marketing: Evidence for the Effectiveness of Hazard Rate Models.”Marketing Science 11 (4): 395–414.Google Scholar
  23. Hendon, William S. 1979.Analyzing an Art Museum. New York: Praeger.Google Scholar
  24. Herron, Douglas B. 1997.Marketing Nonprofit Programs and Strategies. San Francisco: Jossey-Bass.Google Scholar
  25. Jain, Dipak C., and Naufel Vilcassim. 1991. “Investigating Household Purchase Timing Decisions: A Conditional Hazard Function Approach.”Marketing Science 10: 1–23.CrossRefGoogle Scholar
  26. Kelly, Harold H., and John Thibault. 1978.Interpersonal Relations: A Theory of Interdependence. New York: John Wiley.Google Scholar
  27. Kleine, Susan Schultx, Robert E. Kleine III, and Chris T. Allen. 1995. “How Is a Possession ‘Me’ or ‘Not Me’? Characterizing Types and an Antecedent of Material Possession Attachment.”Journal of Consumer Research 22 (December): 327–343.CrossRefGoogle Scholar
  28. Lager, Fred “Chico.” 1994.Ben & Jerry’s: The Inside Scoop: How Two Real Guys Built a Business With a Social Conscience and a Sense of Humor. New York: Crown.Google Scholar
  29. Lemon, Katherine N., and Russell S. Winer. 1996. “A Model of Customer Retention: The Customer Continuation/Disadoption Decision.” Working Paper, Fuqua School of Business, Duke University, Durham, NC.Google Scholar
  30. Levin, Gary. 1993. “Marketers Flock to Loyalty Programs.”Advertising Age 64 (22): 13.Google Scholar
  31. Lovelock, Christopher H. 1983. “Classifying Services to Gain Strategic Marketing Insights.”Journal of Marketing 47 (Summer): 9–20.CrossRefGoogle Scholar
  32. Mael, Fred, and Blake E. Ashforth. 1992. “Alumni and Their Alma Mater: A Partial Test of the Reformulated Model of Organizational Identification.”Journal of Organizational Behavior 13: 103–123.CrossRefGoogle Scholar
  33. O’Reilly, Charles III, and Jennifer Chatman. 1986. “Organizational Commitment and Psychological Attachment: The Effects of Compliance, Identification, and Internalization on Prosocial Behavior.”Journal of Applied Psychology 71 (3): 492–499.CrossRefGoogle Scholar
  34. Pfeffer, Jeffrey. 1983. “Organizational Demography”Research in Organizational Behavior 5: 299–357.Google Scholar
  35. Pritchard, Harmon O. Jr. 1991. “A Member’s Lifetime Value.”Association Management, June, pp. 35–39.Google Scholar
  36. Raj, S. P. 1985. “Striking a Balance Between Brand “Popularity” and Brand Loyalty.”Journal of Marketing 49 (Winter): 53–59.CrossRefGoogle Scholar
  37. Rangaswamy, Arvind, Raymond R. Burke, and Terence A. Oliva. 1993. “Brand Equity and the Extendibility of Brand Names.”International Journal of Research in Marketing 10: 61–75.CrossRefGoogle Scholar
  38. Reichheld, Frederick F. 1996. “Learning From Customer Defections.”Harvard Business Review, March–April, pp. 56–69.Google Scholar
  39. Reid, Peter C. 1989.Well-Made in America: Lessons From Harley-Davidson on Being the Best. McGraw Hill.Google Scholar
  40. Rohwer, Gotz. 1993. TDA (Copyright: Rowher).Google Scholar
  41. Rosenberg, Larry J., and John A. Czepiel. 1984. “A Marketing Approach to Customer Retention.”Journal of Consumer Marketing 1 (Spring): 45–51.CrossRefGoogle Scholar
  42. Rust, Roland T., and Anthony J. Zahorik. 1993. “Customer Satisfaction, Customer Retention, and Market Share.”Journal of Retailing 69 (2): 193–215.CrossRefGoogle Scholar
  43. Sherry, John F., Mary Ann McGrath, and Sidney J. Levy. 1993. “The Dark Side of the Gift.”Journal of Business Research 28: 225–244.CrossRefGoogle Scholar
  44. Smith, Craig. 1994. “The New Corporate Philanthropy.”Harvard Business Review, May–June, pp. 105–116.Google Scholar
  45. Stryker, S. 1980.Symbolic Interactionism: A Social Structural Version. Menlo Park, CA: Benjamin Cummings.Google Scholar
  46. Tajfel, Henri, and John C. Turner. 1985. “The Social Identity Theory of Group Behavior.” InPsychology of Intergroup Relations. Vol. 2. Eds. Steven Worchel and William G. Austin. Chicago: Nelson-Hall, 7–24.Google Scholar
  47. Turner, John C. 1982. “Towards a Cognitive Redefinition of the Social Group.” InSocial Identity and Intergroup Relations. Eds. Henri Tajfel. Cambridge: Cambridge University Press, 15–40.Google Scholar
  48. — 1987.Rediscovering the Social Group: A Self-Categorization Theory. Oxford: Basil Blackwell.Google Scholar
  49. Urice, John K. 1990. “Government Support for the Arts in the United States, 1990–2015: A Forecast.” InThe Future of the Arts: Public Policy and Arts Research. Eds. David Pankratz and Valerie Morris. New York: Praeger, 243–262.Google Scholar
  50. Varadarajan, Rajan P., and Anil Menon. 1988. “Cause-Related Marketing: A Coalignment of Marketing Strategy and Corporate Philanthropy.”Journal of Marketing 52 (3): 58–74.CrossRefGoogle Scholar
  51. Vilcassim, Naufel J., and Dipak C. Jain. 1991. “Modeling Purchase-Timing and Brand-Switching Behavior Incorporating Explanatory Variables and Unobserved Heterogeneity.”Journal of Marketing Research 28: 29–41.CrossRefGoogle Scholar
  52. Watson, Bruce. 1968. “On the Nature of Art Publics.”International Social Science Journal 20 (4): 674–675.Google Scholar
  53. Wedel, Michael, Wagner A. Kamakura, Wayne S. DeSarbo, and Frenkel Ter Hofstede. 1995. “Implications for Asymmetry, Nonproportionality, and Heterogeneity in Brand Switching From Piece-Wise Exponential Mixture Hazard Models.”Journal of Marketing Research 32: 457–462.CrossRefGoogle Scholar
  54. Winer, Russell W., John Deighton, Sunil Gupta, Eric J. Johnson, Barbara Mellers, Vicki G. Morwitz, Thomas O’Guinn, Arvind Rangaswamy, and Alan G. Sawyer. 1997. “Choice in Computer Mediated Environments.”Marketing Letters 8 (3): 287–296.CrossRefGoogle Scholar
  55. Zeithaml, Valerie A., Leonard L. Berry, and A. Parasuraman. 1996. “The Behavioral Consequences of Service Quality.”Journal of Marketing 60 (2): 31–46.CrossRefGoogle Scholar

Copyright information

© Academy of Marketing Science 1998

Authors and Affiliations

  • C. B. Bhattacharya
    • 1
  1. 1.Emory UniversityAtlantaUSA

Personalised recommendations