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

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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.

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Notes

  1. Even though it is not the key contribution of our paper to derive antecedents of the two loyalties, we run models with alternative operationalizations of both company and program loyalty in which all six antecedents load on both loyalties. These alternative models have a significantly worse model fit compared to the original model. Full model results are available upon request from the lead author.

  2. We also assessed whether CL is antecedent to PL or vice versa. Results indicate a weak regression coefficient from CL to PL (.051, p < .05) and a stronger one from PL to CL (.278, p < .01). However, neither of these two alternative models fit the data better than the original model in which PL and CL are allowed to correlate. We thank one anonymous reviewer for raising this point.

  3. To test for model stability, we also estimated the models with SEMs (overall fits: CFI between .949 and .956; TLI .943–.955; RMSEA .049–.055; SRMR .060–.064) and found that the results did not substantially change. In particular, the path coefficients are almost identical to the ones found using 3SLS.

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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.

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Authors and Affiliations

  1. Aston Business School, Marketing Group, Aston University, Aston Triangle, Birmingham, B4 7ET, UK

    Heiner Evanschitzky

  2. School of Marketing, Curtin University, Perth, WA, 6149, Australia

    B. Ramaseshan

  3. Technische Universität Braunschweig, Institute of Automotive Management and Industrial Production, Schleinitzstr. 23a, 38106, Braunschweig, Germany

    David M. Woisetschläger & Christof Backhaus

  4. Gelsenkirchen University of Applied Sciences, Münsterstraße 265, 46397, Bocholt, Germany

    Verena Richelsen

  5. Department of Marketing, TU Dortmund University, Otto-Hahn-Str. 6, 44221, Dortmund, Germany

    Markus Blut

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  1. Heiner Evanschitzky
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Correspondence to Heiner Evanschitzky.

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Evanschitzky, H., Ramaseshan, B., Woisetschläger, D.M. et al. Consequences of customer loyalty to the loyalty program and to the company. J. of the Acad. Mark. Sci. 40, 625–638 (2012). https://doi.org/10.1007/s11747-011-0272-3

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