Designing loyalty programs that matter to customers

Abstract

This study explores a model proposing a customer loyalty program as an identity marketing tool that evokes customer's identity salience (one's perception that a loyalty program membership is important to his/her identity). The results of a Web-based experiment indicate that identity salience is heightened by (1) the uniqueness and exclusiveness of a loyalty program (distinctiveness), and (2) by the fit between the function of the program's rewards and the customer's identity goal (identity congruence). The heightened identity salience, in turn, positively influences the customer's attitude toward the retailer, satisfaction with the loyalty program and the perceived quality of his/her relationship with the retailer.

Keywords:

• customer loyalty programs
• distinctiveness
• congruence
• identity salience