دانلود رایگان مقاله انتخاب زمان بازخرید و هزینه آن و اثرات پاداش بازخرید در برنامه وفاداری

Abstract

The redemption of loyalty program (LP) rewards has an important impact on LP members' behavior, particularly on purchase behavior before and after redeeming a reward. However, little is known about the interplay between members' purchase and redemption behavior when members are not pressured with point expiration and they choose for themselves when and how much to redeem. In this context, the effects of redemption are not straightforward, as little additional effort is required from an LP member to obtain the reward. Analyzing the behavior of 3094 members in such an LP, we find that the mere decision to redeem a reward significantly enhances purchase behavior before and after the redemption event, even when members redeem just a fraction of their accumulated points. Conceptually, we refer to this enhancement as the redemption momentum, which is an alternative and novel explanation of the existence of pre-reward effects that do not depend on points-pressure. In addition to the overall impact of redemption on purchases, prior purchase behavior also enhances redemption decisions. Finally, we find a number of moderating effects on purchase and redemption behavior that derive from the length of LP membership, age, income and direct mailings. Our study's most important managerial implication is that firms should avoid imposing point expiry and/or binding thresholds in order to enhance members' purchase behavior.

Discussion

This study aims to better understand the LP members' rewardredemption behavior and its impact on purchase behavior—in particular, the behavior directly preceding and following a redemption. The study examined a typical LP with a continuous and linear rewarding structure (i.e., one point per euro spent), which is common among retailers of frequently purchased items. Importantly, in LPs without point expiry deadlines, members endogenously choose when and how much to redeem from a broad spectrum of potential reward options. Little is known regarding whether redemption effects occur when no expiration or binding policies exist. Because obtaining a reward in such LPs requires only little additional effort from members, some authors have postulated that pre-reward effects would not occur (Blattberg et al., 2008). Using an extensive data set of 3094 members involved in such an LP, we simultaneously modeled purchase incidence, purchase amount, redemption decision and redemption amount (as a fraction of available balance). This allowed us to empirically investigate such pre-reward effects. We summarize and discuss our key findings below.