This research addresses an important, yet under-researched, issue concerning the management of loyalty programs (LPs) in the era of globalization: how to effectively motivate LP members from different cultures to continue the reward pursuit process. Drawing on cross-cultural research and regulatory fit theory, we identify feedback framing as a low-cost, easy-to-implement strategy for building program loyalty across cultures. Two cross-cultural studies confirm all the hypotheses about the effects of feedback framing. Overall, this research advances theoretical understanding of reward pursuit behavior across cultures and offers practical advice for managing LPs in different cultural contexts.

Despite significant research and progress in examining the effects of loyalty programs on consumer behavior and firm performance, it is still unclear the firm value implications of these programs. The main goal of this article is to investigate whether announcements related to the loyalty program introduction affect firm value. In addition, the current research examines the moderating role of program, firm, and market factors in order to present a complete picture. The authors test the hypotheses empirically by conducting an event study of 134 announcements which cover a set of firms in the United States in five industries for 17 years from 2000 to 2016. We find that on average, the introduction of a loyalty program is positively related to firm value. Findings of this study will help managers understand how and under what conditions, they should introduce a loyalty program in order to affect firm value positively.

Every day, large amounts of personal information are collected by private companies from consumers through multiple sources. Loyalty programs are one of the most popular tools, used to gather such information. Information that is used to offer more personalised options and to target more effectively their promotions. However, many consumers are still attracted to such programs because of the rewards and other benefits offered. Privacy concerns over loyalty programs seem to take their toll. According to a Colloquy (2015) report the numbers of active members is dropping and one of the main reasons cited in the report is privacy concerns. Declining numbers and increased privacy concerns raise the question of how concerned consumers appreciate the benefits offered by loyalty programs and how their satisfaction and loyalty are affected. Apparently, loyalty programs cannot always guarantee loyalty (Nielsen, 2013) as a large portion of consumers demand better protection of their privacy (Madden, 2014) and decline to subscribe to such programs over privacy concerns (Maritz, 2013). The objectives of this study are firstly to examine the underlying reasons behind consumers’ privacy perceptions and secondly to investigate how such perceptions alter consumers’ appraisal of the benefits offered by the loyalty program as well as satisfaction with the program and consumer loyalty. Based on a review of the relevant literature a set of testable hypotheses was developed.

In the last decade loyalty programs have gained popularity across various industries. They are one of the most popular marketing tools that companies use to increase retention, enhance loyalty and gather ‘big data’. The number of companies adopting loyalty programs is rapidly increasing with fashion department stores grown their loyalty program subscriptions by 70% between 2010 and 2012 (Colloquy, 2013). One of the main reasons for this growth can be attributed to the benefits fashion retailers offer to their customers. A new body of current research had directed its attention to a comprehensive set of benefits offered by loyalty programs as well as their potential to increase customer retention and profitability (Evanschitzky et al., 2012). Until recently, it was debatable if loyalty programs can be effective and appropriate in luxury retailing (Lowenstein, 2009), despite research evidence showing a positive effect of loyalty programs’ benefits on customer retention (e.g. Mimouni-Chaabane & Volle, 2010). Traditionally, luxury companies and retailers build loyalty through top-end and differentiated customer experiences. If loyalty schemes were to succeed in the luxury sector they had to deliver the kind of recognition and rewards that make luxury shoppers feel remarkable. Given the growing interest in loyalty programs and scarcity of research related to their effectiveness in the luxury fashion department stores, this study comes to examine the effectiveness of such programs. In particular, this research examines how the utilitarian, hedonic and symbolic perceived benefits from loyalty programs can influence the satisfaction and trust with the program and consequently store loyalty. These relationships are compared between high- and low-end fashion department stores and the differences in their effectiveness are reported. To test these relationships data were collected form a sample of 984 consumers from an online panel in US, using a structured questionnaire. A range of different department stores that offer loyalty programs were pre-selected through a rater procedure to represent the high- and low- fashion department stores. Using structural equation modelling and multi-group analysis, findings support that the effectiveness of loyalty programs is important to both high-and low-end fashion retailing settings but the strength of this effectiveness varies across the two settings. Specifically, hedonic and symbolic benefits derived from loyalty programs found to be more important in the high-end rather than the low-end fashion retailers. In contrast, utilitarian benefits found to be much more effective in influencing customers’ satisfaction with the program in the low-end fashion retailing. The results of this research address an important research gap and help to better understand customers' perceptions of loyalty program benefits obtained from high- and low-end fashion department stores. Finally, the findings provide clear guidelines for managers in both high- and low-end fashion retailing on how to design effectively their loyalty program rewards, by strategically allocating their resources to the benefits that are more important in their setting.

Customer loyalty programs have been widely adopted for customer relationship management all over the world. The proliferation of loyalty programs causes program competition which weakens the effectiveness of loyalty programs at the end of customers. In general, existed research suggests that the increasing competition among rival programs in a single industry may cancel out the expected roles of loyalty programs (Mägi, 2003). For example, program competition is a substantial threat to customer lifetime value and share of wallet (Leenheer, van Heerde, Bijmolt, & Smidts, 2007; Meyer-Waarden, 2007). Liu and Yang (2009) find the sales impact of a single loyalty program diminishes as program competition increases. Their study also shows this negative effect is weaker in a highly expandable product category. Although previous studies have examined the suppressive effect of program competition on financial outcomes of loyalty programs, little research has explored its role on attitudinal customer loyalty formation process. This study aims to explore the differential roles of program competition on two formation processes of customer loyalty. It intends to contribute to the loyalty programs literature in two aspects. First, this study examines two routines of customer loyalty formation in the context of loyalty programs. That is, a company can leverage program offerings to build customer loyalty through increased customer satisfaction or strengthened customer identification with the company. Second, this study examines the moderating roles of program competition on those two loyalty-generating routines. Specifically, it finds customer identification is more important for building customer loyalty at the presence of program loyalty.

This study examines the determinants of the member customer’s decision of redeeming versus accumulating loyalty program (LP) points by focusing on the effects of the different channels of transaction (online versus offline) and the demographic information of member customers. Our study is based on customer-level demographic and transaction data on a major partnership LP in Korea, the OK Cashbag (OCB) program. This study differs from the existing literature in three aspects. First, the dataset employed for this study enables us to compare member customers’ point redemption behavior between online and offline channels, whereas previous studies demonstrate coupon redemption behavior either in an online (Chiou-Wei and Inman 2008) or an offline setting (e.g., Cronovich 1997; Kwon and Kwon 2007; Mittal 1994; Reibstein and Traver 1982; Ward and Davis 1978). Second, the current study investigates not only the main effects of demographic variables, but also a series of interaction effects between the online channel and each demographic variable. Clear empirical evidence of an interaction effect would provide an LP provider with significant managerial implications. Third, rich data on customers’ transaction behavior with matching demographic information for each member customer enable us to conduct both transaction-level and individual customer-level analyses. Therefore, an individual customer’s transaction behavior can be analyzed in more detail for robust results and richer implications. We find that transactions that occur through online channels and those made by younger customers demonstrate a greater tendency of redeeming LP points as opposed to accumulating them. We also find that online channels exhibit a moderating role by mitigating the demographic effects on member customers’ point redemption behavior. These findings allow the LP provider to predict the future LP point balance by analyzing its main channel of transaction and the demographic profiles of its member customers.