IDEAS home Printed from https://ideas.repec.org/a/eee/ijrema/v40y2023i2p276-293.html
   My bibliography  Save this article

Cross-reward effects in a coalition loyalty program: The impact of a point currency devaluation

Author

Listed:
  • Stourm, Valeria
  • Bradlow, Eric T.

Abstract

While single-brand reward programs encourage customers to remain loyal to that one brand, coalition programs encourage customers to be “promiscuous” by offering points redeemable across partner stores. Despite the benefits of this “open relationship” with customers, store managers face uncertainty as to how rewards offered by partners influence transactions at their own stores. We use a model of multi-store purchase incidence and spend to show how the value of points shared among partner stores can explain patterns in customer-level purchases across them. We also allow reward spillovers to be moderated by three measures of store affinity that characterize a coalition’s portfolio: the relative popularity, geographic distance, and overlap in product categories between each pair of stores.

Suggested Citation

  • Stourm, Valeria & Bradlow, Eric T., 2023. "Cross-reward effects in a coalition loyalty program: The impact of a point currency devaluation," International Journal of Research in Marketing, Elsevier, vol. 40(2), pages 276-293.
    • Handle: RePEc:eee:ijrema:v:40:y:2023:i:2:p:276-293
    DOI: 10.1016/j.ijresmar.2022.08.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167811622000659
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijresmar.2022.08.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Matilda Dorotic & Dennis Fok & Peter Verhoef & Tammo Bijmolt, 2011. "Do vendors benefit from promotions in a multi-vendor loyalty program?," Marketing Letters, Springer, vol. 22(4), pages 341-356, November.
    2. Marcel Goi'{c} & Kinshuk Jerath & Kannan Srinivasan, 2011. "Cross-Market Discounts," Marketing Science, INFORMS, vol. 30(1), pages 134-148, 01-02.
    3. Schumann, Jan H. & Wünderlich, Nancy V. & Evanschitzky, Heiner, 2014. "Spillover Effects of Service Failures in Coalition Loyalty Programs: The Buffering Effect of Special Treatment Benefits," Journal of Retailing, Elsevier, vol. 90(1), pages 111-118.
    4. Moon, Ilkyeong & Xu, Jie & Feng, Xuehao & Ruan, Xiao, 2020. "Cooperative sales promotion with a point-sharing policy: Advantages and limitations," Omega, Elsevier, vol. 94(C).
    5. Matilda Dorotic & Dennis Fok & Peter C. Verhoef & Tammo H. A. Bijmolt, 2021. "Synergistic and cannibalization effects in a partnership loyalty program," Journal of the Academy of Marketing Science, Springer, vol. 49(5), pages 1021-1042, September.
    6. Wayne Taylor & Brett Hollenbeck, 2021. "Leveraging loyalty programs using competitor based targeting," Quantitative Marketing and Economics (QME), Springer, vol. 19(3), pages 417-455, December.
    7. Daniel M. Ringel & Bernd Skiera, 2016. "Visualizing Asymmetric Competition Among More Than 1,000 Products Using Big Search Data," Marketing Science, INFORMS, vol. 35(3), pages 511-534, May.
    8. Bombaij, Nick J.F. & Dekimpe, Marnik G., 2020. "When do loyalty programs work? The moderating role of design, retailer-strategy, and country characteristics," International Journal of Research in Marketing, Elsevier, vol. 37(1), pages 175-195.
    9. Valeria Stourm & Scott A. Neslin & Eric T. Bradlow & Els Breugelmans & So Yeon Chun & Pedro Gardete & P. K. Kannan & Praveen Kopalle & Young-Hoon Park & David Restrepo Amariles & Raphael Thomadsen & Y, 2020. "Refocusing loyalty programs in the era of big data: a societal lens paradigm," Marketing Letters, Springer, vol. 31(4), pages 405-418, December.
    10. Oded Netzer & Ronen Feldman & Jacob Goldenberg & Moshe Fresko, 2012. "Mine Your Own Business: Market-Structure Surveillance Through Text Mining," Marketing Science, INFORMS, vol. 31(3), pages 521-543, May.
    11. Quang Dang Nguyen & Khoa Van Nguyen & Olga Kolosova, 2022. "Ways to Measure Loyalty of Service Users," International Journal of Information Systems in the Service Sector (IJISSS), IGI Global, vol. 14(1), pages 1-18, January.
    12. Danaher, Peter J. & Sajtos, Laszlo & Danaher, Tracey S., 2020. "Tactical use of rewards to enhance loyalty program effectiveness," International Journal of Research in Marketing, Elsevier, vol. 37(3), pages 505-520.
    13. Chib, Siddhartha, 1992. "Bayes inference in the Tobit censored regression model," Journal of Econometrics, Elsevier, vol. 51(1-2), pages 79-99.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bombaij, Nick, 2021. "Effectiveness of loyalty programs," Other publications TiSEM 095c506d-5b5c-4ea3-9b41-a, Tilburg University, School of Economics and Management.
    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. Matilda Dorotic & Dennis Fok & Peter C. Verhoef & Tammo H. A. Bijmolt, 2021. "Synergistic and cannibalization effects in a partnership loyalty program," Journal of the Academy of Marketing Science, Springer, vol. 49(5), pages 1021-1042, September.
    4. Bies, Suzanne, 2022. "Examining the effectiveness of activation techniques on consumer behavior in temporary loyalty programs," Other publications TiSEM ade86df3-4846-4318-938f-a, Tilburg University, School of Economics and Management.
    5. 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.
    6. Xuan Gong & Yunchan Zhu & Rizwan Ali & Ruijin Guo, 2019. "Capturing Associations and Sustainable Competitiveness of Brands from Social Tags," Sustainability, MDPI, vol. 11(6), pages 1-20, March.
    7. Bies, Suzanne M.T.A. & Bronnenberg, Bart J. & Gijsbrechts, Els, 2021. "How push messaging impacts consumer spending and reward redemption in store-loyalty programs," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 877-899.
    8. Els Breugelmans & Tammo Bijmolt & Jie Zhang & Leonardo Basso & Matilda Dorotic & Praveen Kopalle & Alec Minnema & Willem Mijnlieff & Nancy Wünderlich, 2015. "Advancing research on loyalty programs: a future research agenda," Marketing Letters, Springer, vol. 26(2), pages 127-139, June.
    9. Maximilian Matthe & Daniel M. Ringel & Bernd Skiera, 2023. "Mapping Market Structure Evolution," Marketing Science, INFORMS, vol. 42(3), pages 589-613, May.
    10. Adam N. Smith & Jim E. Griffin, 2023. "Shrinkage priors for high-dimensional demand estimation," Quantitative Marketing and Economics (QME), Springer, vol. 21(1), pages 95-146, March.
    11. Saridakis, Charalampos & Katsikeas, Constantine S. & Angelidou, Sofia & Oikonomidou, Maria & Pratikakis, Polyvios, 2023. "Mining Twitter lists to extract brand-related associative information for celebrity endorsement," European Journal of Operational Research, Elsevier, vol. 311(1), pages 316-332.
    12. Dawn Iacobucci & Maria Petrescu & Anjala Krishen & Michael Bendixen, 2019. "The state of marketing analytics in research and practice," Journal of Marketing Analytics, Palgrave Macmillan, vol. 7(3), pages 152-181, September.
    13. Rehnen, Lena Marie, 2016. "Exit strategies of loyalty programs," jbm - Journal of Business Market Management, Free University Berlin, Marketing Department, vol. 9(1), pages 564-596.
    14. Zhou, Meihua & Angelopoulos, Spyros & Ou, Carol & Liu, Hongwei & Liang, Zhouyang, 2023. "Optimization of dynamic product offerings on online marketplaces: A network theory perspective," Other publications TiSEM 75d71155-88bf-4ff7-aba1-9, Tilburg University, School of Economics and Management.
    15. Ratchford, Brian & Soysal, Gonca & Zentner, Alejandro & Gauri, Dinesh K., 2022. "Online and offline retailing: What we know and directions for future research," Journal of Retailing, Elsevier, vol. 98(1), pages 152-177.
    16. Bombaij, Nick J.F. & Gelper, Sarah & Dekimpe, Marnik G., 2022. "Designing successful temporary loyalty programs: An exploratory study on retailer and country differences," International Journal of Research in Marketing, Elsevier, vol. 39(4), pages 1275-1295.
    17. Alina Nastasoiu & Neil T. Bendle & Charan K. Bagga & Mark Vandenbosch & Salvador Navarro, 2021. "Separating customer heterogeneity, points pressure and rewarded behavior to assess a retail loyalty program," Journal of the Academy of Marketing Science, Springer, vol. 49(6), pages 1132-1150, November.
    18. Jaeger, Lena-Christin & Höhler, Julia, 2021. "Using word of mouth data from social media to identify asymmetric competition in food retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    19. Ning Zhong & David A. Schweidel, 2020. "Capturing Changes in Social Media Content: A Multiple Latent Changepoint Topic Model," Marketing Science, INFORMS, vol. 39(4), pages 827-846, July.
    20. Torsten J. Gerpott & Jan Berends, 2022. "Competitive pricing on online markets: a literature review," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(6), pages 596-622, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ijrema:v:40:y:2023:i:2:p:276-293. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/international-journal-of-research-in-marketing/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.