 The economic worth of loyalty programs: An event study analysisAshkan Faramarzi and Abhi Bhattacharya Journal of Business Research, 2021, vol. 123, issue C, 313-323 Abstract: Despite significant research and progress in examining the effects of loyalty programs on consumer behavior and firm performance, the firm value implications of these programs are still unclear. The article investigates whether loyalty program introduction affects firm value, as measured by abnormal stock returns. The authors test the hypotheses empirically by conducting an event study of 260 announcements which cover 110 firms in the United States across different industries for 18 years from 2000 to 2017. Findings reveal that the introduction of loyalty programs, on average, positively influences firm value. The results of this study also reveal the existence of contingencies including synergies with complementary market-based assets and market conditions of lower uncertainty in determining the value of loyalty programs. The authors conclude that the value of loyalty programs is greater when the perceived risks of purchase are lower. Keywords: Loyalty program; Advertising; Customer satisfaction; Brand value; Event study (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:123:y:2021:i:c:p:313-323 DOI: 10.1016/j.jbusres.2020.09.044 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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