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

Alex Belli (), Anne-Maree O’Rourke (), François A. Carrillat (), Ljubomir Pupovac (), Valentyna Melnyk () and Ekaterina Napolova ()
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Alex Belli: The University of Adelaide
Anne-Maree O’Rourke: The University of Queensland
François A. Carrillat: HEC Montréal
Ljubomir Pupovac: UNSW Sydney
Valentyna Melnyk: UNSW Sydney
Ekaterina Napolova: Rabobank Australia

Journal of the Academy of Marketing Science, 2022, vol. 50, issue 1, No 11, 147-173

Abstract: 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.

Keywords: Loyalty programs; Loyalty cards; Reward programs; Customer loyalty; Firm performance; Relationship marketing; Meta-analysis (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11747-021-00804-z

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