Customer demotion in hierarchical loyalty programmes

Geert van Berlo, Josée Bloemer and Vera Blazevic

The Service Industries Journal, 2014, vol. 34, issue 11, 922-937

Abstract: Hierarchical loyalty programmes are popular in many service industries, as a means to tie customers to the company and improve customer relationships. In these programmes, customers obtain more benefits if they spent more but are demoted if they spent less. This study focuses on demotion and suggests that customer demotion can have an asymmetrical negative effect on customers' trust, commitment, and loyalty. The effect appears strongest for demoted customers with an external locus of causality. An experimental study also shows that customer loyalty is lower for demoted customers than for customers who were never elevated.

Date: 2014
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DOI: 10.1080/02642069.2014.915950

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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