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On the impact of loyalty cards on store loyalty: Does the customers’ satisfaction with the reward scheme matter?

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  • Demoulin, Nathalie T.M.
  • Zidda, Pietro

Abstract

Most customers hold several loyalty cards of competing retailers. Past studies looking into the impact of card ownership on store loyalty showed mixed results. We postulate that loyalty cards are effective only when customers value the rewards associated with them. We investigated to what extent the satisfaction with loyalty card rewards affects the effectiveness of loyalty card programmes in the food retail sector. From the analyses of survey data within the framework of store choice models, we confirm that loyalty card owners are more store loyal. More precisely, we show that when holders are satisfied with the reward scheme of the loyalty card programme, they are more loyal and less price sensitive than unsatisfied card holders.

Suggested Citation

  • Demoulin, Nathalie T.M. & Zidda, Pietro, 2008. "On the impact of loyalty cards on store loyalty: Does the customers’ satisfaction with the reward scheme matter?," Journal of Retailing and Consumer Services, Elsevier, vol. 15(5), pages 386-398.
    • Handle: RePEc:eee:joreco:v:15:y:2008:i:5:p:386-398
    DOI: 10.1016/j.jretconser.2007.10.001
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    References listed on IDEAS

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    1. Rajiv Lal & David Bell, 2003. "The Impact of Frequent Shopper Programs in Grocery Retailing," Quantitative Marketing and Economics (QME), Springer, vol. 1(2), pages 179-202, June.
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    3. N. Demoulin & P. Zidda, 2006. "On the differences between loyalty card adopters and nonadopters," Post-Print hal-00256549, HAL.
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    1. García Gómez, Blanca & Gutiérrez Arranz, Ana M & Gutiérrez Cillán, Jesús, 2012. "Drivers of customer likelihood to join grocery retail loyalty programs. An analysis of reward programs and loyalty cards," Journal of Retailing and Consumer Services, Elsevier, vol. 19(5), pages 492-500.
    2. Chen, Yanyan & Mandler, Timo & Meyer-Waarden, Lars, 2021. "Three decades of research on loyalty programs: A literature review and future research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 179-197.
    3. Firend Al. R., 2018. "Marketing Strategies of Services and Purchasing Incentives in Asia," GATR Journals jmmr187, Global Academy of Training and Research (GATR) Enterprise.
    4. Demoulin, Nathalie T.M. & Zidda, Pietro, 2009. "Drivers of Customers’ Adoption and Adoption Timing of a New Loyalty Card in the Grocery Retail Market," Journal of Retailing, Elsevier, vol. 85(3), pages 391-405.
    5. Filipe, Sandra & Marques, Susana Henriques & Salgueiro, Maria de Fátima, 2017. "Customers' relationship with their grocery store: Direct and moderating effects from store format and loyalty programs," Journal of Retailing and Consumer Services, Elsevier, vol. 37(C), pages 78-88.
    6. Sharma, Dheeraj & Verma, Varsha, 2014. "Psychological and economic considerations of rewards programs," Journal of Retailing and Consumer Services, Elsevier, vol. 21(6), pages 924-932.
    7. Mimouni Chaabane, Aida & Pez, Virginie, 2017. "“Make me feel special†: Are hierarchical loyalty programs a panacea for all brands? The role of brand concept," Journal of Retailing and Consumer Services, Elsevier, vol. 38(C), pages 108-117.
    8. Steyn, Peter & Pitt, Leyland & Strasheim, Arien & Boshoff, Christo & Abratt, Russell, 2010. "A cross-cultural study of the perceived benefits of a retailer loyalty scheme in Asia," Journal of Retailing and Consumer Services, Elsevier, vol. 17(5), pages 355-373.
    9. Chen, Shiuann-Shuoh & Choubey, Bhaskar & Singh, Vinay, 2021. "A neural network based price sensitive recommender model to predict customer choices based on price effect," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    10. Arbore, Alessandro & Estes, Zachary, 2013. "Loyalty program structure and consumers' perceptions of status: Feeling special in a grocery store?," Journal of Retailing and Consumer Services, Elsevier, vol. 20(5), pages 439-444.
    11. Danaher, Peter J. & Sajtos, Laszlo & Danaher, Tracey S., 2016. "Does the reward match the effort for loyalty program members?," Journal of Retailing and Consumer Services, Elsevier, vol. 32(C), pages 23-31.
    12. Hu, Xin & He, Liuyi & Liu, Junjun, 2022. "Status reinforcing: Unintended rating bias on online shopping platforms," Journal of Retailing and Consumer Services, Elsevier, vol. 67(C).
    13. Zou, Fei & Yang, Mei & Zhou, Yanju & Deng, Yaling & Xie, Baiwei, 2024. "Goal-gradient point rewards can increase consumers' willingness to purchase poverty-alleviating products," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    14. Ebo Botchway & Jack McLaughlin & Jan Verpooten & Siegfried Dewitte, 2023. "Loyalty Programs in Second-Hand Markets Stimulate Demand but May Interfere With Supply," RAIS Conference Proceedings 2022-2024 0357, Research Association for Interdisciplinary Studies.
    15. Alex Belli & Anne-Maree O’Rourke & François A. Carrillat & Ljubomir Pupovac & Valentyna Melnyk & Ekaterina Napolova, 2022. "40 years of loyalty programs: how effective are they? Generalizations from a meta-analysis," Journal of the Academy of Marketing Science, Springer, vol. 50(1), pages 147-173, January.
    16. Pandit, Ameet & Vilches-Montero, Sonia, 2016. "Are reward cards just a business deal? The role of calculative versus emotional card commitment in driving store loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 355-360.
    17. Bahri-Ammari, Nedra & Bilgihan, Anil, 2017. "The effects of distributive, procedural, and interactional justice on customer retention: An empirical investigation in the mobile telecom industry in Tunisia," Journal of Retailing and Consumer Services, Elsevier, vol. 37(C), pages 89-100.
    18. Helgesen, Øyvind & Ivar Håvold, Jon & Nesset, Erik, 2010. "Impacts of store and chain images on the “quality–satisfaction–loyalty process†in petrol retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 17(2), pages 109-118.
    19. Vesel, Patrick & Zabkar, Vesna, 2009. "Managing customer loyalty through the mediating role of satisfaction in the DIY retail loyalty program," Journal of Retailing and Consumer Services, Elsevier, vol. 16(5), pages 396-406.
    20. Meyer-Waarden, Lars, 2015. "Effects of loyalty program rewards on store loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 24(C), pages 22-32.
    21. Coelho do Vale, Rita & Verga Matos, Pedro & Caiado, Jorge, 2016. "The impact of private labels on consumer store loyalty: An integrative perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 179-188.

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