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Journal of the Academy of Marketing Science
Published in: Journal of the Academy of Marketing Science 1/2022

08-09-2021 | Original Empirical Research

40 years of loyalty programs: how effective are they? Generalizations from a meta-analysis

Authors: Alex Belli, Anne-Maree O’Rourke, François A. Carrillat, Ljubomir Pupovac, Valentyna Melnyk, Ekaterina Napolova

Published in: Journal of the Academy of Marketing Science | Issue 1/2022

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Abstract

Despite firms’ extensive usage of loyalty programs (LPs) and decades-long academic research on their effectiveness, LPs’ effects on customer loyalty are still heavily debated. We perform a comprehensive meta-analysis of loyalty programs across various LP designs and industries and spanning different performance metrics to identify moderators of LP effectiveness. Based on a data set with 429 effect sizes, published or available between 1990 and 2020, we find strong evidence that LPs enhance customer loyalty. However, while LPs particularly enhance behavioral loyalty, shifting consumers’ attitudinal loyalty is more challenging. Further, LP effectiveness differs systematically depending on LP design characteristics (LP structure, reward content and delivery) and industry characteristics. These effects are enabled by both cognitive and affective drivers, acting sequentially, as underlying mechanisms. Despite a wide range of methodologies investigating LPs’ effectiveness, methodological choices have little impact on the substantive results. We develop a comprehensive research agenda and managerial implications.
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Appendix
Available only for authorised users
Footnotes
1
Up until now, the four LP design characteristics in Bombaij and Dekimpe’s (2020) study constitute the largest number of simultaneous effects investigated.
 
2
The literature discussion covers conative loyalty, but this dimension is not part of the meta-analytical framework and is not included in empirical predictions because only 8 effect sizes were retrieved for it.
 
3
Similarly, in the few cases when the studies compare different intensity levels of the same LP design characteristics (e.g., 5 tiers vs. 3 tiers rather than tiers vs. no tiers), the higher intensity level served as the treatment condition to maintain consistency between effect sizes.
 
4
For example, we were able to retrieve LP design and rewards information about Macau’s Venetian Casino’s Sands Rewards Club included in Shi et al. (2014) from the archived corporate web site and online business news articles published then (Cision PR Newswire 2010).
 
5
Diagnostic tests of publication bias based on funnel plot asymmetry are inadequate if the distribution of effect sizes is likely to be heterogeneous (Ionnadis 2005), as in our case, because the pool of effect sizes reflects a population with different underlying “true” effects. As a solution, we account for heterogeneity with the moderators, including the precision of the effect size (Sterne and Egger 2005).
 
6
For the full list of articles included in the meta-analysis, see Web Appendix A.
 
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Metadata
Title
40 years of loyalty programs: how effective are they? Generalizations from a meta-analysis
Authors
Alex Belli
Anne-Maree O’Rourke
François A. Carrillat
Ljubomir Pupovac
Valentyna Melnyk
Ekaterina Napolova
Publication date
08-09-2021
Publisher
Springer US
Published in
Journal of the Academy of Marketing Science / Issue 1/2022
Print ISSN: 0092-0703
Electronic ISSN: 1552-7824
DOI
https://doi.org/10.1007/s11747-021-00804-z

Other articles of this Issue 1/2022

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Methodological Paper

Revisiting Gaussian copulas to handle endogenous regressors

Original Empirical Research

Managing customer satisfaction after a product recall: the joint role of remedy, brand equity, and severity

Original Empirical Research

The use of Net Promoter Score (NPS) to predict sales growth: insights from an empirical investigation

Editorial

Reimagining marketing strategy: driving the debate on grand challenges

Conceptual/Theoretical Paper

The future of buyer–seller interactions: a conceptual framework and research agenda

Original Empirical Research

Going healthy: how product characteristics influence the sales impact of front-of-pack health symbols