The effect of short-term loyalty programs on (the
relationship between) attitudinal and behavioral loyalty
change in a grocery retail setting
Research
Question
Background &
setup
What is the effect of consumer’s participation in SLPs on
both behavioral and attitudinal loyalty and how do these
two constructs relate?
BrandLoyalty aims to increase retailer’s sales and brand equity by implementing tailor-made SLPs all over the world.
Understanding not only the effect of its programs on consumer’s behavior, but also why these changes occur, is of great value for the company.
This study provides insights in the relationship of consumer’s changes in
behavior and attitudes by means of the implementation of an SLP.
Customer-related and program-related factors are included to test whether
customer characteristics and program design influences the effect of participation on customer loyalty.
Findings
4
Attitudinal loyalty change:
Sign of effect depends on household income level
Behavioral loyalty change:
Participation in the SLP under study only led to basket size increase
The effect on basket size change is dependent on the level of number of competitors visited (low) and perceived reward attractiveness (high).
Attitudinal/behavioral loyalty change relationship:
Bootstrapping methods did non indicate an indirect effect of participation on change in behavioral loyalty through attitudinal loyalty change.
Research
Method
Data collection
and models used
Indirect effect on behavioral loyalty change through attitudinal loyalty change:
• (Multiple moderated) mediation models
• PROCESS-tool to estimate bootstrap confidence intervals • Repeated 10,000 times
Direct effects on attitudinal and behavioral loyalty change:
• Least-squares regression models
• Main effects model and moderation models
Data collection:
Results
Attitudinal loyalty
change
6
SLP-participation is not significantly affecting attitudinal loyalty change There is a positive moderation effect of household income on the effect of participation on attitudinal loyalty change: participation leads to increase in attitudes for high income levels, but to a decrease in attitudes for low
Results
Behavioral loyalty
change
SLP-participation has a significant positive effect on basket size change, but not on change in share-of-wallet and visit frequency.
Conditional direct effects indicate that the effect of participation on basket size change is dependent on number of competitors visited (customer-related) and perceived reward attractiveness (program-(customer-related):
Results
Program
comparison of
reward
attractiveness
8Implications
Retailer implications:
Using SLP as a tool to increase attitudinal loyalty will affect customers with high income levels positively, but customers with low income levels
negatively.
BrandLoyalty implications:
The success of implementing an SLP as marketing tool in order to increase customer behavior is dependent on reward attractiveness, indicating that it is necessary to test reward attractiveness before implementing an SLP.
Limitation
Statistical power
10
Sample size of final dataset: n=208, statistical power of .80 is strived for. Largest least-squares model
contains 13 predictors
For medium population effect size the samples size is large enough, for
small effect size not.
(Cohen, 1992)
For the mediation models, the effect of SLP-participation on change in
attitudinal loyalty + the effect on change in attitudinal loyalty on behavioral loyalty change must reach medium effect size in this study, in order to
obtain .80 statistical power with n=208.
