The purpose of this paper is to investigate customer loyalty program membership effects from a multi‐faceted relational outcome perspective.
A model was developed to assess hypothesized loyalty program effects on a series of linkages between relationship commitment and a variety of relational outcomes. The study's hypotheses are tested with customer survey data from an upscale department store chain. Structural model multi‐group analysis is used to test the hypotheses between members (n=1,239) and non‐members (n=743) of the department store's customer loyalty program.
The findings display the surprisingly limited impact of loyalty program membership on the tested relational outcomes. Loyalty program membership favorably influences customers' desires to increase their purchases and provide complaint feedback to the firm. However, loyalty program membership fails to favorably impact four key advocacy outcomes; namely, customers' willingness to provide personal referrals, marketing research support, share personal information, and demonstrate openness to firm promotions.
The results are based on a large sample of highly educated and affluent customers of a specific retailer, encompassing members of one particular loyalty program.
The results provide cautionary evidence as to what marketers may be able to gain from loyalty programs as a relationship marketing tool for impacting firm advocacy behaviors.
The tested model captures potential contributions of customers as advocates to the firm. The mixed empirical support demonstrates the limited impact of loyalty programs on strengthening non‐purchase‐related outcomes.
