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

Author

Listed:
  • 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)

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.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:joamsc:v:50:y:2022:i:1:d:10.1007_s11747-021-00804-z
    DOI: 10.1007/s11747-021-00804-z
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    2. Meyer-Waarden, Lars & Bruwer, Johan & Galan, Jean-Philippe, 2023. "Loyalty programs, loyalty engagement and customer engagement with the company brand: Consumer-centric behavioral psychology insights from three industries," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    3. Katarína Gubíniová & Thorsten Robert Moller & Silvia Treľová & Malgorzata Agnieszka Jarossová, 2023. "Loyalty Programmes and Their Specifics in the Chinese Hospitality Industry—Qualitative Study," Administrative Sciences, MDPI, vol. 13(6), pages 1-12, June.
    4. John H. Roberts & Mark Uncles & Harald J. Heerde & Valentyna Melnyk & Maggie Chuoyan Dong, 2023. "Marketing at UNSW Sydney: Building Marketing Capability in Australasia," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 10(1), pages 1-8, December.
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