Testing the leaflet design of a loyalty program as driver for consumer participation

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Testing the leaflet design of a loyalty program as

driver for consumer participation

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Testing the leaflet design of a loyalty program as

driver for consumer participation

Master Thesis

University of Groningen

Faculty of Economics and Business Msc Business Administration Department of Marketing PO Box 800, 9700 AV Groningen

Date July, 2013

Name: Maud Boereboom

Student number: 2145057 Address: Hadewychstraat 74 5216 KE ‘s-Hertogenbosch E-mail: maudboereboom@hotmail.com Telephone: +31 (0)6 83257751 Supervisor 1: Dr. J. Bouma

E-mail supervisor 1: j.t.bouma@rug.nl

Supervisor 2: J.H. Wiebenga

E-mail supervisor 2: j.h.wiebenga@rug.nl Supervisor BrandLoyalty int. K. Heeren

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MANAGEMENT SUMMARY

This report is written for BrandLoyalty international. The purpose of this study is to explore what ensures consumers to participate in a loyalty program and how the decision to participate is influenced by the leaflet design, and in particular the collecting part of the leaflet where stamps have to be pasted on the leaflet. This empirical research investigates the different aspects of a leaflet design, which consists out of; including images of the reward, the use of color and the size of the leaflet.

Firstly, it is studied whether including an image of the reward in the leaflet design influences consumers’ willingness to participate (WTP) in the loyalty program. As Hilligoss and Howard (2002) stated, the first thing a consumer notices when encountering a document, are pictures. When these impressions are positive, consumers will continue elaborating on the document, which may ensure a more positive feeling towards the loyalty program and motivation to participate (Hilligoss & Howard, 2002). The second variable which is distinguished in the leaflet design is the influence of color. As many studies have implicated; different colors enhance different feelings, thoughts and motivations (Bagchi & Cheema, 2012; Labrecque et al., 2013; Jones, 1997). For this research the influence of colors and the use of contrast colors are tested on consumers’ WTP in a loyalty program. The last variable is the size of the leaflet; do consumers want the leaflet to fit into their wallet, or should it be somewhat larger which is likely to increase the readability and visibility?

Moderation on the direct relation between leaflet design aspects and WTP in a loyalty program was tested. The effort consumers have to make in order to redeem the reward is proposed to have an influence on this relationship. This moderating effect of effort can be distinguished in three variables; a financial investment, number of stamps to collect and the use of sub goals.

The first moderating effect includes a financial investment that consumers have to make in order to redeem the reward. Here, an extra payment for the reward is tested. The second variable is the number of stamps that have to be collected. This variable gives consumers a good indication of the amount of effort they have to put into a loyalty program (Wulf et al. 2003). The third variable is the use of sub goals in the collecting part, as sub goals can enhance or delay the intended velocity towards completing the leaflet. Sub goals are seen as small goals in the process of collecting, as these sub goals can refer to the number of stamps that already have been collected, or the number of stamps that still have to be collected.

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4 Quantitative research was conducted by sending out questionnaires to respondents in different age categories and educational levels. Respondents were asked to answer questions concerning seven leaflet designs. The questions related to consumer attitudes regarding the design and the likelihood of participation in the loyalty program in real life. All independent variables and moderating variables were manipulated in the leaflet designs: half of the designs included images, contrast colors and a small leaflet size, while in others these were excluded. The same was done for the moderating variables, in half of the leaflet designs participants had to pay extra in order to redeem the reward, the number of stamps was different, and the designs had sub goals while the other half had no extra payment was necessary, the number of stamps needed was lower and the design had no sub goals. The direct effect of the design variables were not all significant on consumers’ WTP, only the use of contrast colors had a significant influence on consumers’ WTP, while including images and the size of the leaflet were not significant. However, when testing the independent variables separately on WTP with an univariate test, the design elements were significant on WTP, what made us continue to study the moderating effects. The difference in significance indicates that the design elements have a high influence on each other, which decreased the significance level.

After testing the moderating effects of a financial investment, it can be stated that an extra payment significantly influences consumers’ WTP when the leaflet has colors in it, and when it has a small size. The number of credits did also have a moderating influence on consumers’ WTP when the size of the leaflet was small, and the use of sub goals moderates the relation between the use of an image and consumers’ WTP. However, these separate moderating effects did not result in an overall influence of effort on the impact of leaflet design on WTP.

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PREFACE

This thesis concludes the final part to complete my Master in Marketing Management at the University of Groningen. This thesis provides an empirical study of the leaflet design of a loyalty program and their impact on the willingness of consumers to participate in a loyalty program. The variables that were tested are: whether to include images of rewards, using a small or large leaflet size, and using contrast colors.

The behavior of consumers for these kind of loyalty programs corresponds with my interests in customer programs, fast moving consumer goods and all elements that binds the consumers to a company.

First of all I would like to thank my supervisors Dr. Jelle T. Bouma and Mr. Jacob H. Wiebenga for their useful feedback and instructions. I would also like to thank BrandLoyalty International, and in particular Mrs. Karla Heeren for giving me the opportunity to perform my research for BrandLoyalty, and giving me constructive feedback during this period. Furthermore, I would like to thank Thomas Verleg, Rob Boereboom and Martha Caers for the time they invested in reading this thesis and providing me with useful feedback.

Maud Boereboom

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1. INTRODUCTION

This thesis is written for BrandLoyalty international which is an international company with nine offices, employing more than 400 people all over the world. BrandLoyalty is funded in 1995 with the aim to develop and retain customer relationships with loyal customers for food retailers. Per year they run short-term loyalty programs in over 200,000 retail stores in almost every continent. As BrandLoyalty executes a lot of short-term loyalty programs all over the world, they aim to develop the most optimal collecting part of a leaflet design, in order to attract more consumers to participate in the program. As some of the loyalty programs are designed by the retailer, and most loyalty programs are designed within BrandLoyalty, this thesis will provide the management of both companies with measures about the most optimal leaflet design. The most important aspects that should be taken into account when designing a leaflet for a loyalty program are discussed, as the design of a loyalty program has a big impact on both the participation of consumers as the effectiveness of the loyalty program (Bijmolt, Dorotic and Verhoef, 2010).

The aspects which are involved in this research are defined in a scope, as not every aspect of a leaflet can be researched. This means that the core of this research consists out of the collecting part of the leaflet. The collecting part includes some information about the loyalty program and dates, pictures of the reward that the consumers can redeem, the colors used to make a contrast between the leaflet and the collecting part, and the size of the overall leaflet. While knowing this, the research question can be stated, in order to provide BrandLoyalty with direct answers to their questions.

How do design elements of a loyalty program leaflet ensure that consumers are willing to participate?

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9 Besides the main effect of the design variables on WTP, it is suggested that there is a moderating effect of the variable effort. Effort is tested as moderating effect between the design elements and WTP as it is stated in previous research that consumers are only willing to participate in a loyalty program when the perceived benefits are higher than the perceived costs, what refers to financial costs and costs for losing privacy (Leenheer, 2007, Liudmila & Jakštaitė, 2007). This moderator ‘effort’ is expected to have an effect on the relation of leaflet design and consumers’ WTP in a loyalty program, which is distinguished in three variables; (1) an extra financial investment in order to redeem the reward, (2) the number of stamps the customer has to generate and (3) the presence of sub goals.

The first moderating effect of financial investment is said to have a moderating effect on the design elements and their influence on WTP. When a lot of money has to be invested in order to redeem a reward of a loyalty program, the positive design elements may be affected by the degree of effort that the consumer has to put into the loyalty program. While knowing this, some sub questions regarding the first moderating effect, financial investment, can be stated; “How does an extra financial investment influence the relation between the use of images in a leaflet design and the WTP in a loyalty program?” “How does the amount of an extra financial investment influence the relation between the use of contrast colors in a leaflet design and consumers’ WTP?” and, “How does the height of an extra financial investment has an influence on the relation between the leaflet size and consumers’ WTP?”

When taking a look at the second moderating variable which is the number of stamps that have to be collected in order to redeem the reward, we suggest that the less stamps that have to be collected, the higher the WTP of consumers in the loyalty program. Regarding this statement, following sub questions can be stated. “How does the number of stamps influence the relation between the use of images in a leaflet design and the WTP in a loyalty program?” “How does the number of stamps have an influence on the relation between the use of contrast colors in a leaflet design and consumers’ WTP?” and, “How does the number of stamps have an influence on the relation between the size of the leaflet and consumers’ WTP?”

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10 and, “How does the use of sub goals influence the relation between the leaflet size and consumers’ WTP in a loyalty program?”

For this master thesis, a closer look was taken at the collecting part of a leaflet, and in particular leaflets that were used in short-term loyalty programs. As a lot of participants drop out, or even do not want to start with the loyalty program, the researcher aimed to find out what aspects of the leaflet design ensures consumers to become more WTP in the program. Additionally, a closer look was taken at the effort that participants have to make in order to redeem the reward, and their influence on the effect of leaflet design aspects on consumers’ WTP. Next, the designs of existing leaflets are evaluated, and with this evaluation, we aim to find some big differences in types of design, which may be an incentive to design the best possible leaflet.

This research is an addition in the field of loyalty programs as a lot of studies regarding loyalty programs indicate the effort of consumers and their possibility to join a loyalty program or the reasons why not to choose to participate (Leenheer, 2007, Stauss et al., 2005, Bagdonienė, Jakštaitė, 2007). This study has been performed from a different angle, as design elements of a loyalty program are tested on the consumers’ WTP in a loyalty program, and the influence of effort on this relation. These design elements were supported with literature, and can be implemented in future loyalty programs by companies such as BrandLoyalty international.

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2. LITERATURE REVIEW

Loyalty programs exist out of intentions to change consumer behavior, as they reward their customers for doing business with the firm (Lui, 2007).This change in consumer behavior has as much to do with psychological as economic aspects (Melnyk and Osselaer, 2012). Before the research about loyalty programs, and more specific the leaflet of the loyalty program will be carried out, some background information about the motivation of consumers to collect will be provided. According to McIntosh and Schmeichel (2004), collecting is a process where a positive feeling can be derived by goal formation and attainment that is clear and can be reached. When this goal is set and achieved, a sense of competence and autonomy will be reached, which increases consumers’ feelings of self-worth and self-efficacy (Belk, 1991). Thus, collecting in a loyalty program or the collection of goods is highly related to the development of relations with the world and other people, as to development of the self (Case, 2009). This can easily be related to the “Hierarchy of Needs” of Maslow (1943) where self-actualization is at the top, which stands for self-fulfillment; after a person feels save and is accepted by a community, they feel safe enough to develop themselves and start leisure activities such as collecting (Case, 2009, Berl et al, 1984). When the differences in gender are postulated, female consumers are seen as more loyal to individuals such as service providers, whereas male consumers tend to be more loyal to a group of people, a company or a store (Melnyk and Osselaer, 2012).

Typical loyalty programs consist out of customers that earn loyalty points (or another type of points such as credits or stamps) for buying at the provider of the loyalty program (Dorotic et al., 2011). Leaflets are a part of a reward program which only run for limited periods and are anonymous (Gómez et al., 2012). Therefore this research will focus on the leaflets within short-term loyalty programs.

2.1 Willingness to participate in a Loyalty Program

Companies can lower their costs and create loyalty by ensuring WTP of consumers in a program. In the new social and internet based world, WTP can be seen as consumer engagement or “active involvement with a brand, product, service, or company through acts like creating content” (Parent, Plangger & Bal, 2011).

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12 This positive attitude will occur when there are both economic and non-economic benefits for the participants (Leenheer, 2007). This means that the advantages and disadvantages of the attitudes towards programs should be in balance.

When combining the WTP in a loyalty program with the equity theory, some useful similarities were found. The equity theory proposes that “parties in exchange relationships compare their ratios of exchange inputs to outcomes” (Adams, 1965; Huppertz, Arenson & Evans, 1978; Wulf, 2003). In a loyalty program, inequity may exist when the inputs of a consumer are seen as higher than the perceived benefits or outcomes. Wulf et al. (2003) identified eight different variables concerning consumer inputs and outputs, which is said to have an impact on consumers’ WTP in a loyalty program. Consumer inputs are stated as; (1) privacy concerns, (2) financial costs, (3) frequency of purchase, (4) exclusivity of the consumer (5) the effort the consumers have to make. The consumer outputs that have an impact on consumers’ WTP are; (1) benefits of the program, (2) quantity of loyalty programs, (3) duration of the program.

Consumer inputs Consumers outputs

Privacy concerns Benefits of the program

Financial costs Quantity of loyalty programs

Frequency of purchase Duration of the program

Exclusivity of the consumer Effort of the consumer

Table 1: variables that have an influence on consumers’ WTP in a loyalty program

Privacy concerns: The costs or an input that consumers have to make is giving some personal information to the retailer. The retailer can use this information to send promotions and mails, but the consumer wants to see a clear benefit while providing this information. This type of input can be noticed as loosing privacy (Nowak & Phelps, 1995; Liudmila & Jakštaitė, 2007).

Financial costs: The financial costs are seen as some amount of money that consumers have to pay in order to participate in the loyalty program. For some long-term loyalty programs this is referred to as costs before receiving a loyalty card, and in short-term loyalty programs it can be seen as the costs that have to be made in order to redeem a reward (Wulf et al., 2003).

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13 Exclusivity of the consumer: With exclusivity is referred to a special treatment of a consumers, or belonging to a specific group of consumers (Wulf et al., 2003). As customer focus becomes more and more important, consumers want to be treated in an individual and special way (Verhoef & Lemon, 2013).

Effort: For every type of loyalty program, some minimal amount of effort is involved. This effort can be seen as an activity that a consumer has to undertake in order to get its promised benefits, which can be distinguished in “minimal efforts” and “extended efforts” (Wulf et al.; 2013). Minimal effort is seen as bringing the loyalty card with you to the retailer, while extended effort is referred to as collecting the stamps, putting them on the loyalty card and some paperwork.

Consumer outputs are elaborated in the following section.

Benefits of the program: These benefits are seen as something that consumers get in return for participating in a loyalty program. Most of the time, these benefits are seen as the most important reason to participate in a loyalty program, as almost 70% of consumers’ choice to participate is driven by benefits and costs of the loyalty program (Wulf et al. 2003). For long-term loyalty programs this can be seen as a discount, while for short-term loyalty programs the reward is the benefit.

Quantity of loyalty programs: Is seen as the number of loyalty programs that are provided at the same time by multiple retailers. Consumers will be more interested when stamps for the same loyalty program can be collected at multiple retailers at the same time, as opposed to one single retailer.

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14 2.2 Leaflet design

The design of the leaflet is important in the decision of consumers to start with a loyalty program (Bijmolt, Dorotic and Verhoef, 2010). As stated by Kotler and Rath (1990), “well-designed products communicate quality and value to the consumer.” This enhances the fact that a good design distinguishes products and companies from the rest of the suppliers (Bruce & Daly, 2007). When taking a closer look at leaflets and other types of communications of a company, these should all enhance its corporate identity (Bruce & Daly, 2007). Additional, as appeared from focus groups held in Germany (2012), a clear design of a loyalty program increases the quality perception of the consumer towards the reward.

The design of a leaflet is influenced by many factors such as color of the text and background, including images of the rewards or excluding them, the size of the leaflet and the quality of the paper. For this research the images, color and size of the leaflet are taken into account, as these seem to be the most valuable factors to focus on from the consumers’ and retailers’ point of view. 2.2.1 Images

Visual elements, such as images, are seen as effective elements when the purposes of the images are highly aligned with those of the actual document (Rosenquist, 2012). When visualizations are included in a design, human memory can be activated in processing visual information with cognitive processing. This cognitive processing includes the processing of underlying information by comprehension, memory and deduction of the visualizations (Agrawala, Li & Berthouzoz, 2011). So, the actual reward of a loyalty program should be clearly visualized in the leaflet in order to be effective. Other visual elements such as decoratives (e.g., color, shape) can enhance a specific feeling from the consumer. Again, these decoratives should be used to promote the purpose of the actual document (Manning & Amare, 2006). This enhances the Gestalt principles, which states that visual information is organized into wholes. All individual visual parts that are noticed by the consumers are organized into categories, where two principles are especially helpful, namely;

 “Separating figure from ground”

 “Grouping by proximity and similarity”

o Grouping objects that are close to each other

o See objects as related when they have a lot of similarities

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15 texture. Consumers being aware of these perceptual issues can help them interpret the message (Hilligoss & Howard, 2002).

Relating all these aspects to the design of a loyalty program, we notice that a lot of different aspects are important in the design of a leaflet. Consumers tend to lose motivation as they do not understand the loyalty program, thus when using a clearly visualized and explained redemption scheme, consumers will get more motivation to redeem the reward (Smith & Sparks, 2009).

“When encountering a document, people first tend to focus on the pictures, this includes all visual elements like photographs, drawings, maps or graphs” (Hilligoss & Howard, 2002). These visual elements relate to stored knowledge but also to emotional responses.

As our memory creates our own “mental images” of pictures and relates those images to words, it is one of the long lasting types of memory. Once encountered an image, the first impressions relate to importance, interest and genre which are already stored in mind. If the first impressions are positive, consumers will continue elaborating on the document such as reading or scanning the most important elements (Hilligoss & Howard, 2002). An affective or emotional response can be generated by an image used in a print advertisement. Using images in print advertising has a high impact on consumers’ attitudes towards the brand (Mitchell, 1986) and may evoke an emotional response (Chowdhury, 2008). When taking the visual elements of the leaflet into consideration, and in particular images of the reward, the visualizations of the reward ensures higher WTP in the loyalty program as consumers are confronted with the product they are collecting for (Focusgroup Germany, 2012). Thus, the following hypothesis can be stated:

H1: A clearly visualized image of the reward has a positive influence on consumers’ WTP. 2.2.2 Color

Color is also an important factor in the design of a leaflet. As many studies have implicated; different colors enhance different feelings, thoughts and motivations (Bagchi & Cheema, 2012; Labrecque et al., 2013; Jones, 1997). Additionally, “consumers overwhelmingly prefer color to black and white” and pages that have several colors in it are viewed by consumers as more easy to read, more important and believable (Jones, 1997).

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16 are seen as "beautiful" and Austria, Colombia, United States see them as “pleasant.” For all colors and their meanings across countries, see table 2.

Table 2: Colors and their meaning in different countries (Madden et al. 2000)

Research from Hemphill (1996) on reactions to colors indicate that more positive attitudes like happy and excited are accompanied with brighter colors such as white, pink, red, blue compared with negative reactions to darker colors such as brown and black.

Another important factor concerning color is the contrast between the foreground color and background color. The use of these colors has a great influence on the visibility of the consumer. Thus, there should be a big contrast between the background color versus the color of the text, as most aged people tend to have visual disorders (Pinheiro & Da Silva, 2012; Da Silva, 2012). According to research of “Stichting InZicht” in the Netherlands in 2020, 73,9% of the Western citizens of 50 years and older will be visually impaired, compared with 3,5% of the citizens in the age category 15 to 49 (Limburg, 2007, see appendix 3).

H2: Leaflets with a big contrast between background color and text-color, will ensure a higher WTP in the loyalty program as opposed to leaflets with little contrast.

2.2.3 Size

Besides the images and the color of the leaflet, size can also be seen as highly important as most participants tend to keep the leaflet in their wallet (Focus Group Germany, 2012). The size of the leaflet affects the attention of the consumer to the offer, memory aspects such as recall and

recognition and attitudes such as brand belief (Hussain et al. 2010). Thus, small leaflet sizes (from A7 till A9) seem to be more effective than large leaflets (A5 and A6). Then, participants can take their

Country Associations

Blue, Green, White All countries "peaceful,"

"gentle,"& "calming,"

Brazil, Hong Kong, China, United States "beautiful" Austria, Colombia, United States "pleasant" Black and Brown All countries "sad,"& "stale"

Brazil, Colombia, China, and Taiwan "formal" Austria, Hong Kong, the United States "masculine" Gold, Orange, and

Yellow

All countries Do not possess strong associations

Purple Hong Kong, China, Taiwan Similar to brown

Red All countries "active," "hot," "vibrant," "emotional" & "sharp"

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17 leaflet to the retailer which ensures higher WTP as they are directly confronted with the leaflet and the number of stamps to collect. As stated on several printing websites (motionprinting.co.uk, nextdayflyers.com, vistaprint.nl) , A7 is seen as ideally for flyers with little information, A6 is seen as the most popular size as it is easy to fold and put into pockets and handbags, and A5 is very useful for flyers with lots of text. Additionally, leaflets with somewhat bigger sizes (A6 and A5) seems to be better readable as the font size of the text can be a minimal 9pt font size what is recommended by Fuchs et al. (2008). For the different paper sizes, see figure 1.

Figure 1: Paper sizes

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18 2.3 Moderating effect of effort

The WTP of a consumer is said to be directly influenced by the design elements of a leaflet. As previously mentioned, the effort a consumer has to put into a program is seen as a very important whether to participate in a loyalty program (O’Brien & Jones, 1995; Wulf et al.; 2013). Therefore, it is assumed that the influence of effort has a moderating effect on the influence of the design of a leaflet, with its variables image, color and size, and the dependent variable WTP. The moderator ‘effort’ can be distinguished in an extra financial investment, the number of stamps to collect and sub goals. The financial investment the consumer has to pay and the number of stamps they have to collect in order to redeem the reward are seen as important aspects of effort. Sub goals may decrease the apparent effort the consumer has to make, as a collecting program is sub divided in plural little goals.

When looking at the effort consumers have to make in order to complete a collecting program, we notice several elements that determine the value of a loyalty program, namely; the financial value of the rewards, the range of rewards to choose from, the observed value of the rewards, the likelihood of achieving the requested number of loyalty points and thus achieving the reward, and the ease of use of the loyalty card (O’Brien & Jones, 1995). As we do not have any influence on the type of rewards, the other variables will be taken into account in the moderator effort.

2.3.1 Influence of a required financial investment

Several types of investments in a loyalty program can be distinguished, this section of the research is aimed at the financial aspect, as for all loyalty programs some financial contribution has to be made by the customer (Wulf et al., 2003). Normally, when consumers do grocery shopping, some stamps are given concerning the amount they spent on groceries (on average €10 per stamp), and with a full leaflet a reward can be redeemed. However, in some loyalty programs an extra payment is required in order to redeem the reward. An extra payment has everything to do with the mechanism the retailer chooses for its loyalty program. There are three mechanisms which are used by retailers to execute the loyalty program. The first one is an ‘investment program’ where the retailer is investing money in a loyalty program to retain their current customers or attract new customers. This means that the participants are able to redeem a reward with a very high discount rate up to 100%. The second mechanism is a ‘break-even program’ where the retailer has no intention to make a profit or to invest a lot of money in their customers. This type of program is seen as an extra offer for the loyal customer as they get a discount up to 70% for rewards such as household appliances.

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19 type of loyalty program, the retailer makes a profit on every reward that has been sold. Normally, a high extra payment is required in order to redeem the reward.

A lot of frustration with a loyalty program rises when consumers can only access the reward with these additional costs (Stauss et al., 2005). Thus, these additional costs are important factors for joining a program, as monetary savings are seen as the most important benefit in order to join a loyalty program (Peterson, 1995; Olesen & Petersen, 1995). This is underpinned by Wulf et al. 2003 who discovered that the costs consumers have to pay and the benefits they receive by paying those costs drive their choice whether to participate in a loyalty program for almost 70%. Therefore, the hypothesis can be stated as;

H4: A high required financial investment will have a negative moderating effect on the relation between leaflet design and consumers’ WTP

H4a: The relation between the use of an image in the leaflet design and the willingness to participate is moderated by financial investment

H4b: The relation between the use of color and the willingness to participate is moderated by financial investment

H4c: The relation between leaflet size and the willingness to participate is moderated by financial investment

2.3.2 Influence number of stamps to collect

Per loyalty program, there is a big difference in the number of stamps that consumers have to collect in order to redeem a reward. The number of stamps and the amount that a consumer has to spend per stamp is highly dependent of the reward and the type of loyalty program (profit, break-even or investment program) As some retailers want to make a profit with their loyalty programs, the number of stamps to collect can increase to 60 or 80, with a payment of €5 to €10 per stamp (CompetitorMonitor, 2012). In this case, the number of stamps required to redeem the reward are often seen as difficult or impossible to fulfil (Stauss et al., 2005). This may ensure a lot of frustration with the customer as the number of stamps is seen as a barrier to redeem the reward.

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20 Some participants also seem to forget the loyalty program points that they have earned in time, according to research of Capizzi et al., (2004) 19% of 1000 participants forget about their loyalty points.

H5: A high number of credits will have a negative moderating effect on the relation between leaflet design and consumers’ WTP

H5a: The relation between the use of an image in the leaflet design and the WTP is moderated by the number of stamps to collect

H5b: The relation between the use of color and the willingness to participate is moderated by the number of stamps to collect

H5c: The relation between leaflet size and the willingness to participate is moderated by the number of stamps to collect

2.3.3 Influence of sub goals

Many researchers state, that in order to successfully reach a goal, a set of actions or sub goals have to be fulfilled over a period of time (Anzai and Simon 1979; Newell and Simon 1972). Consumers can enhance their ability to visualize outcomes and thus increase goal pursuit with visualizing the goal, which may also lead to increased effort in obtaining the goal (Cheema & Bagchi, 2011; Naylor & Ilgen, 1984; Pham & Taylor, 1999). Thus, consumers are more concerned about a goal as they get closer towards redeeming it. As researched by Cheema and Bagchi (2011), the motivation of people is greater when they can graphically track their progress in approaching a goal. Additionally, “visualizing performance has greater effects when the goals are presented in a consolidated manner than when they are divided into multiple sub goals.” As stated by Kumar, Kalwani and Dadi (1997) concerning waiting cues in theme parks, filled time seems to pass more quickly than empty time. This can also be reflected on collecting programs, as consumers have to wait until they collected all stamps.

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21 occur as when sub-goals are chosen. This refers to loyalty programs where a lot of stamps have to be collected, thus not too much sub goals have to be included in a leaflet design. As reward programs are seen as short-term loyalty programs, the most effective leaflet design would be one with sub-goals, and with a clear visualization of the goal. Thus, hypotheses can be stated:

H6: The use of sub goals in a leaflet design will have a positive moderating effect on the relation between leaflet design and consumers’ WTP

H6a: The relation between the use of an image in the leaflet design and the WTP is moderated by the use of sub-goals

H6b: The relation between the use of color and the WTP is moderated by the use of sub-goals H6c: The relation between leaflet size and the WTP is moderated by the use of sub-goals

2.4 Conceptual Model

In figure 2 the independent variable “leaflet design” with its variables; images, color and size, and moderator “effort” with its variables; financial investment, number of stamps and sub goals with dependent variable “willingness to participate in a loyalty program” is represented in a conceptual model.

Figure 2: The conceptual model

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3. RESEARCH METHOD

3.1 Pre-Study

Before designing the leaflets that were tested in a quantitative research, a portfolio study was conducted where existing leaflets were tested on all variables (images, colors, leaflet size, financial investment, number of stamps, and sub goals). Existing leaflets were provided by the Competitor Monitor of BrandLoyalty international. The Competitor Monitor is an internal program which is designed to collect all loyalty programs of BrandLoyalty and their competitors. From all these loyalty programs and their corresponding leaflets, a selection of the leaflets with apparently different designs was made. This selection consisted out of thirty leaflets, which subsequently were tested on a subjective seven-point likert scale. All design elements of these existing leaflets were used as input for the leaflet designs that were tested in the quantitative research.

Reward: Glassware was used as reward of the loyalty program that was tested with quantitative research, as it is a globally accepted product. Also, many different brands in glassware exist. Because of the many glassware brands, for this study the brand Fontignac was chosen in deliberation with BrandLoyalty. As Fontignac has no glassware in its assortment, consumers’ brand awareness did not create a bias for the Fontignac glasses used in this study. In the study, participants could redeem stamps for four different types of glasses (red wine glasses, white wine glasses, juice glasses, and soda glasses).

Image: As Fontignac glassware was chosen as reward, clear images of another brand of glassware were used in the leaflet design. As participants could choose for which type of glassware they wanted to collect stamps, an image of all types of glasses was used in the collecting program.

Color: The two leaflets which got the highest overall grades had the colors red and black. As mentioned earlier (see page 15), black is a color that is seen as “sad & sale”, while red is seen as “hot and vibrant” (Madden et al. 2000). Therefore it was interesting to combine these colors, and see which color, and therefore participants’ color related attitudes, were dominant.

Leaflet size: In order to respond to the wish of consumers to store the leaflet in their wallet, two different sizes were used in the leaflet designs. One leaflet had A5 size, which could not be stored in a wallet, while the other leaflet had size A7. A7 is a size that can easily be stored in a consumers’ wallet.

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23 investment program were free after collecting stamps. In a profit program, participants had to make an extra payment of respectively €7,99 or €8,99, depending on the type of glassware. Additionally, the financial investment of the stamps was taken into account, therefore, the amount participants had to spent in order to get one stamp was €10, as this is an amount that is most used in different types of loyalty programs.

Number of stamps: The number of stamps that were most often used in the portfolio study was between twenty and eighty stamps. As the reward for this loyalty program is glassware, twenty and sixty stamps had to be collected. This number gives a good distinction in the amount of stamps, as twenty is seen as a small number, thus more feasible than sixty stamps.

Sub goals: Some sub goals were used in the leaflet designs. As there are many different ways to implement sub goals, in this leaflet testing another color is used to project the amount of stamps that has already been collected.

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24 3.2 Study

3.2.1 Participants

Table 3: Descriptive results

An online questionnaire was conducted under 217 inhabitants of the Netherlands, who were older than eighteen years. These participants were approached via different social media. To ensure the participants had earlier encountered a loyalty program, participants were filtered on the quantity of doing grocery shopping. Participants who did their groceries “always” or “often” were redirected to the questionnaire, while participants who did their groceries “sometimes” or “never” were filtered out. The questionnaire was online for a period of two weeks. The actual sample size after filtering and participants that stepped out during the questionnaire, consisted out of 101 participants. The study was a quantitative causal research where the main dependent variable, WTP in the loyalty program, was tested throughout the whole questionnaire.

As seen in table 3, of the participants, 65% were females and 35% were males (average in the Netherlands; 71% female and 29% male shoppers (Consumententrends 2011)). The mean age of these participants was 36 years, with a minimum of 20 and a maximum of 79 years old. This age was not normally distributed, as most participants were between 20 and 30 years old (according to EMFI Business school (Consumententrends 2011), 42% of the supermarket shoppers are between 35 and 54 years old, and 22% is between 18 and 34 years old). Most participants had a slightly higher educational level than the average in the Netherlands; 50,4% had an educational level on a University of Professional Education, and 38% had an education on University level, while the average of higher educated inhabitants in the Netherlands is 28% (CBS Statline). These results suggest that there was no normal distribution in level of education.

In the quantitative research, two different questionnaires were used, one with even leaflet designs (53,5%), and one with odd leaflet designs (46,5%). As the distribution of these questionnaires was more or less equal, the results are combined and used as one study.

Descriptives

Gender Age Persons in

household

Educational level Male Female Total

N Valid

35 66 101 95 101 101

Missing 116 122 116 116

Mean 36,00 2,23 4,22

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25

3.2.2 Procedure

All participants attended the questionnaires on an individual measure. Before the participants approved to attend the experiment, a link of the online questionnaire was posted on different types of social media. Participants were asked to attend this questionnaire where they had to give their opinion on seven different leaflet designs. When the participants started the questionnaire, they were redirected to one of the six different questionnaires. These six questionnaires were designed each with seven leaflet designs. In total fourteen leaflets were designed to manipulate all independent and moderating variables, the manipulation of the variables can be found in table 4. Image: The independent variable ‘Images’ has everything to do with including pictures of the reward at the collecting part of the leaflet, to give consumers the opportunity to see what they are collecting for. In half of the leaflet designs an image was included, while no images were included in the other seven designs.

Color: The next independent variable, color, is about the use of contrast color at the collecting part of the leaflet design. This variable was manipulated by using contrast colors in half of the designs, while no clear contrast colors were used in the other seven leaflet designs.

Size: The last independent variable, leaflet size, considers the overall size of the leaflet. As the sizes A5 and A7 were mentioned before, these sizes are also used in the research. In half of the questionnaires, a small leaflet size was used (A7), in the other half a larger leaflet size was used (A5).

Table 4: Manipulation leaflet designs

Leaflet design

Image Contrast color Overall leaflet size

Sub-goals Number of stamps

Pay extra

1 Yes Yes A7 No 20 Yes

2 Yes Yes A7 No 20 No

3 Yes Yes A7 No 60 No

4 Yes Yes A7 Yes 60 No

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26 This distribution in leaflet design and independent variables ensured that the participants encountered other aspects in every leaflet design, as they were exposed to seven designs in one questionnaire.

Financial investment: A financial investment was also manipulated in the leaflet designs, as the extra amount that had to be paid in order to redeem the reward was stated at the leaflet. In half of the questionnaires no additional payment had to be done, while in the other half of the questionnaires, an extra amount of respectively €7,99 or €8,99 had to be paid.

Number of stamps: As stated in the pre-study, twenty and sixty stamps were used in the leaflet designs. In seven of the leaflets, twenty stamps had to be collected in order to redeem the reward. In the other seven leaflets, sixty stamps had to be collected.

Sub goals: The last variable ‘sub goals’ can be seen as a difference in color, or some text in the collecting program which says how many stamps the participants already have collected, or have left to collect after reaching this point in the program. In seven of fourteen leaflet designs, sub goals were included, which made the participants notice other design elements in each leaflet design.

3.2.3 Composition questionnaires

In the questionnaires, first some information about participants’ attitudes towards saving programs and the gifts was asked on a seven-point likert scale (“Participating by collecting stamps for rewards in loyalty programs gives me a positive feeling” , Handbook of Marketing Scales, 2011). Next, the first leaflet design was shown to the participant. After the participant encountered the leaflet design, ten statements about their feelings and thoughts were stated, also on a seven point likert-scale. Next, fifteen attitudes on a semantic differential scale had to be filled in. After the participants filled in their attitudes concerning the first leaflet design, the following six designs were shown where the same statements were given.

After the questions about the specific designs, some general questions regarding leaflet aspects were asked. The respondents had to answer these questions by giving grades from 0 to 100 to each leaflet aspect. Before the demographics of the respondents had to be filled in, the participants had to rank the seven designs from most favorite to least favorite leaflet design.

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27 ascending sequence. The same was conducted with questionnaires with the even designs. When doing this, both questionnaire groups had different leaflet designs which could not influence the results.

3.2.4 Statistical analyses

Statistical analyses were conducted using

Statistical Package for the Social Sciences version 21. First, some data was analyzed in order to get some insights. Thus, participants’ attitudes towards leaflet designs were tested using statements regarding each separate leaflet design. Five statements testing the leaflet designs were used and its means were tested and graphically represented using a compared means test. For every variable that was manipulated in the leaflet designs, participants were asked to rate the independent variables and moderating variables with a grade from 0 (not important at all) to 100 (very important). The difference in variance of these grades was tested using one-way ANOVA, and the means were graphically represented in a bar chart.

Dependent variable: Willingness to participate was measured using statements and questions in the questionnaire. The willingness to participate was tested with the statements: “I am interested in this loyalty program” and “I am likely to participate in this program” (Handbook of Marketing Scales, 2011). These two statements were combined, what ensured the data WTP of participants in the loyalty program.’

Independent variables: The independent variables were tested using the WTP per leaflet design, and dummy variables for including pictures, contrast colors or using a small leaflet size. The influence of leaflet design on the WTP was tested using a linear regression analysis.

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28

4. RESULTS

4.1 Preliminary results

Participants were asked to give a grade to each leaflet element from 0 (not important at all) to 100 (very important). The results in figure 4 show that the most the most important element of the leaflet is seen as the financial contribution participants had to make (87,4 out of 100) and the number of stamps they had to collect (85,8 out of 100). The least important aspects were the color of the leaflet (52.7 out of 100) and the use of sub goals (41.7 out of 100).

Figure 4: variables and their grades on a scale from 0 to 100

From the ANOVA it appeared that the grading of the variable ‘image’ significantly differs from all other variables except from the variable ‘sub goals’ (F (93) =1,036, p=.44). The average grading for both color elements, thus the color used in the design and the use of contrast colors, both significantly differ from the independent measures (images (F(93)=3,090, p<.01, F(96)=2,243, p<.01) and size (F(93)=2,519, p<.01, F(96)=1,649, p<.05), but do not significantly differ from the three moderating variables of effort (financial investment, number of stamps and sub goals). The variable with the highest average grade, financial investment, does significantly differ from color (F (92) =1,835, p<.05) and number of stamps to collect (F (98) =3,701, p<.01, see appendix 11). This indicates that not all variables significantly differ from each other, while the two highest scores do. This means that we can be much more confident about significant differences between the variables. Thus, we can be much more confident about significant difference between a financial investment and the color that is used and the number of stamps that have to be collected, compared with the difference in financial investment and the use of images in a leaflet design.

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29 At the beginning of the questionnaire, some general questions were asked regarding the attitudes of the participants towards loyalty programs. Participants were asked to answer on a 7 point-likert scale, of which examples can be found in table 5. The most important results here, were the answers to the statement “I enjoy collecting stamps for gifts via loyalty programs, regardless the amount that I save,” which was answered with a mean of 3,54, this indicates that some participants does not like to participate in a loyalty program, regardless the amount that they save with collecting.

Descriptive Statistics

N Mean Std. Deviation

Appealing design gives me motivation 144 3,99 1,61

Collecting gives a positive feeling 144 3,65 1,64

Enjoy collecting regardless the amount I save 145 3,54 1,77

Product is appealing, thus I am more motivated 146 4,93 1,77

Valid N (listwise) 143

Table 5: Motivation of respondents concerning loyalty programs in %

4.2 Independent variable testing

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30 When testing the independent variables univariate on the dependent variable WTP, there appeared to be a significant effect of every independent variable on participants’ WTP. The results of the regression indicated the predictor images explained 1, 6% of the variation in WTP (R2=.018, F (1, 758) = 13.72, p<.01). This indicated a significant positive effect of the use of images on consumers WTP (β = .457, p<.01). The results of these regression analyses can be found in table 6 on page 32.

The use of color in the leaflet design explained 2,3% of the variation in WTP (R2=.024, F (1, 758) =18.90, p<.01). The regression analysis indicated a positive effect of the use of contrast colors on WTP (β = .535, p<.01). The last independent variable, the size of the leaflet, explained 0,6% of the variation in WTP (R2=.007, F (1, 758) =5.51, p<.05). The size of a leaflet had a negative influence on consumers WTP (β = -.291, p<.05), this indicated that the larger the size of the leaflet, the less consumers are willing to participate in the loyalty program (appendix 12). This univariate test shows that all independent aspects are separately influencing consumers WTP. Thus, all design variables are taken into account when testing the moderating effect.

Table 6: Testing IV on DV with regression analysis ( WTP as dependent variable)

Additional open questions at the end of each leaflet design suggested that some participants thought that, for the leaflet designs without images, some images should be included in the leaflet design (28,8% of the participants). Some reactions were; “When you would put an image of the glasses on the flyer, you would motivate me to start collecting,” “The consumer has no idea what he is

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31 collecting for, we could be collecting stamps for a very cheap glassware brand when no pictures are shown”, and “Put a picture of the reward on the design, and use some more livelier colors, these are sad and boring”.

As mentioned above, some participants found the colors very sad, and rather some livelier colors should be used in the leaflet design (12,7% of the participants).

Concerning the financial aspects, most participants thought that the price of the rewards regarding the number stamps and their collecting value was too high (16,1%), or no additional payment should be included when collecting stamps (10,17%). Also, 26,3% of the participants thought that fewer stamps should be included in the collecting program.

4.2.1 Including moderators in the regression analysis

When including the moderating variables financial investment, number of stamps and sub goals as dummies in the regression analysis, we found that the overall model is significant, and 7,6% of the variance in WTP is explained by these moderating and independent variables (R2=.083 F(6,753)= 11.43, p<.01). See table 7 for an overview.

The moderating variables did have an effect on the significance of the independent variables, as the use of images (β =-.269, p=.08) and the use of contrast colors (β =.567, p=.22), were not significant anymore on WTP. The independent variable size still had a significant effect on consumers’ WTP (β =.334, p<.01). Moreover, when we looked at the moderating variables, an additional financial investment (β =1.322, p<.01) and the number of stamps that have to be collected in a loyalty program (β =1.268, p<.01) did have a significant direct effect on consumers’ WTP. This was not the case for sub goals, as its results were not significant (β = -.194), p=.45).

The final regression analysis included the influence of the moderating effects on the relation between including an image, the use of contrast colors and the size of a leaflet on consumers’ WTP. From this analysis it appeared that 7,9% of the total variance in WTP was explained by all these variables (R2=.091 F (10,749) =7.504, p<.01).

Images on WTP: From the regression analysis it appeared that the moderating effect of a financial investment on the relation including images on WTP was not significant (β =.021, p=.97). The second moderating variable, number of stamps, was excluded from the analysis. While the moderating effect of sub goals was significant on this relation (β =.965, p<.05). Therefore, hypothesis 4a and 5a were rejected, while hypothesis 6a was accepted.

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32 on this relation (β =.917, p<.05), while the number of stamps was excluded from the analysis, and the number of sub goals had no significant moderating effect (β =.226, p=.47). These results indicate that hypothesis 4b was accepted, while hypothesis 5b and 6b were rejected.

Size on WTP: The last relation that was tested with the moderating variables is the influence of size of the leaflet on WTP. From the regression analysis it is concluded that there was a significant moderating effect of both financial investment (β =1.379, p<.01) and the number of stamps (β =1.226, p<.01) on this relation. The moderating effect of sub goals was not significant on the relation between size and WTP (β =-.301, p=.27). From these results, hypothesis 4c and 5c were accepted, while hypothesis 6c was rejected.

Table 7: Regression analysis with WTP as dependent variable Model Unstandardized Coefficients Standardized Coefficients t Sig. R Square Adjusted R Square B Beta .083 .076 (Constant) 1,722 6,859 ,000 Image -,269 -,078 -1,226 ,220 Color ,567 ,165 2,559 ,011 5 Size ,334 ,098 1,753 ,080 Money 1,322 ,386 6,000 ,000 Stamps 1,268 ,370 4,536 ,000 Subgoals -,194 -,056 -,755 ,450 .091 .079 (Constant) 2,933 12,851 ,000 Image -,743 -,217 -1,798 ,073 Size -,834 -,243 -2,633 ,009 Money ,139 ,041 ,341 ,733 Image x Money ,021 ,006 ,041 ,967

6 Image x Sub goals ,965 ,197 2,399 ,017

Color x Money ,917 ,254 2,919 ,004

Color x Sub goals ,226 ,055 ,724 ,469

Size x Money 1,379 ,335 3,352 ,001

Size x Stamps 1,226 ,293 3,906 ,000

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33 4.3 Overall effect of moderating variables on direct relation

The overall effect of the moderating variables financial investment, number of stamps and sub goals was tested on the direct relation between leaflet design and WTP. These results can be found in table 8.

This regression analysis showed that the moderating effect of a financial investment explained 2,3% of the total variance in WTP (R2=.027 F(3,756)=7,059, p<.01) From this regression analysis it can be stated that leaflet design had no overall significant effect on WTP (β =.661, p=.093). When testing the overall influence of financial investment on the direct relation of leaflet design on WTP, also here no significant effect was found (β =.-404, p<.561). Overall, a financial investment did not have a moderating effect on the effect of a leaflet design on the WTP. The second moderating effect that was tested is the number of stamps. Here, 3,4% of the variance in WTP is explained in WTP. Also here it is concluded that the number of stamps did not have a moderating effect on this relation (R2=.038 F (3,756) =9.975, p<.01, β =.468, p=.81).

Moreover, the use of sub goals neither had a positive significant effect on the direct relation between leaflet design and WTP, with 3% of the variance in the moderating effect that was explained in WTP (R2=.034 F (3,756) =8.786, p<.01, β =.795, p<.11). Therefore it can be concluded that there is no significant moderation effect of the variables of effort (financial investment, number of stamps and sub goals) on the relation between the design of a leaflet, and the WTP.

Coefficientsa

Model Unstandardized Coefficients Standardized

Coefficients t Sig. R Square Adjusted R Square B Std. Error Beta (Constant) .027 .023 2,766 ,188 14,700 ,00 1 _Design _,661 _,503 _{,093 1,313} _,19 Money ,588 ,378 ,171 1,555 ,12 Design x Money -,404 ,694 -,084 -,582 ,56 (Constant) .038 .034 2,392 ,260 9,193 ,00 2 _Design _1,271 _,402 _{,179 3,166} _,00 Stamps ,282 ,316 ,082 ,892 ,37 Design x Stamps ,468 ,574 ,066 ,816 ,4 (Constant) .034 .030 2,637 ,226 11,655 ,00 3 _Design _,958 _,366 _{,135 2,614} _,0 Sub Goals ,021 ,293 ,006 ,071 ,94

Design x Sub goals ,795 ,552 ,113 1,439 ,15

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34

5. CONCLUSIONS AND RECOMMENDATIONS

In this research, it was tested how the different elements of a loyalty program leaflet influences WTP in loyalty programs. An extra financial investment and the number of stamps that have to be collected in a loyalty program were seen as most important aspects of a loyalty design. From these results we can conclude that the effort a consumer has to make in order to complete a collecting program is seen as very important. When taking a look at the design elements, including images in the leaflet design was seen as most important aspect. In next paragraphs, the hypothesis and their results are elaborated on. For all hypothesis and their results, see table 9.

Hypothesis Results

Design

H1: Including an image positively affects WTP Rejected H2: Leaflets with a big contrast in color will positively influence WTP Accepted H3: A small collecting part of a leaflet will positively influence WTP Rejected

Effort

H4: A high required financial investment will have a negative moderating effect on the relation between leaflet design and consumers’ WTP

Rejected

H4a: Relation use of an image and WTP is moderated by financial investment Rejected H4b: Relation use of color and WTP is moderated by financial investment Accepted H4c: Relation leaflet size and WTP is moderated by financial investment Accepted H5: A high number of credits will have a negative moderating effect on the relation between

leaflet design and consumers’ WTP

Rejected

H5a: Relation use of an image and WTP is moderated by the number of stamps Rejected H5b: Relation use of color and WTP is moderated by the number of stamps Rejected H5c: Relation leaflet size and WTP is moderated by the number of stamps Accepted H6: The use of sub goals in a leaflet design will have a positive moderating effect on the

relation between leaflet design and consumers’ WTP

Rejected

H6a: Relation image and the WTP is moderated by the use of sub-goals Accepted H6b: Relation use of color and the WTP is moderated by the use of sub-goals Rejected H6c: Relation leaflet size and the WTP is moderated by the use of sub-goals Rejected

Table 9: Hypothesis and their results 5.1 Conclusions leaflet design

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35 The findings suggest that only the color aspect of a leaflet has a significant effect on the WTP in the loyalty program. This means that the presence of an image of the reward and using a small leaflet size have no influence on consumers’ motivation to participate in the loyalty program.

Looking at the analysis on multivariate level, and in particular the influence of color in the design, one can state that the use of a contrast color in a leaflet design positively influences the WTP in the loyalty program. A lot of respondents underpinned this by giving comments on the leaflet designs. Most respondents concluded that the use of color in the leaflet designs that were tested, were very sad, and they would rather see some livelier colors in the leaflet design. As mentioned earlier by Hemphill (1996); more positive reactions will occur when brighter colors are used in the leaflet design. These colors include white, pink, red and blue. As dark red and black colors were used in the leaflets that were tested, it can be concluded that these colors are not preferable to increase the WTP. Additionally, there should be some contrast colors in the collecting part of the leaflet, which ensures a higher visibility for especially elderly consumers that may have visual disorders (Pinheiro & Da Silva, 2012; Da Silva, 2012). However, of all design elements, the use of color was tested as the one variable with a significant effect on consumers’ WTP.

The use of images and the size of the collecting part of the leaflet were not considered as important aspects of a leaflet as it had no influence on consumers’ WTP. Thus, the use of images and the size of the leaflet do not have an impact consumers’ motivation to participate, as long as the colors that are used in the leaflet design are appealing.

From this multivariate analysis it appeared that the design variables had a high influence on each other, what may have affected the significance of the results. Therefore, a univariate analysis was conducted to test all independent variables separately on the WTP. From the univariate analysis it appeared that all separate design variables had a significant effect on consumers’ WTP,. This ensured us to continue the research with these independent variables, and test the moderating effect of effort on these relations.

5.2 Conclusions moderating effect of effort

As most of the respondents stated in the questionnaire, the gifts were too expensive when combining them with the number of stamps that had to be collected. This is also indicated in the analysis; consumers are both more willing to participate in a loyalty program when they see the program as beneficial, thus when no extra payment has to be done (Leenheer, 2007, Stauss et al., 2005, Bagdonienė, Jakštaitė, 2007).

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36 consumers are more likely to participate in a loyalty program when the use of color and the size of the leaflet are appealing to them, and when the extra financial investment is not too high. However, the moderating effect of financial investment did not have a significant effect on the relation between the use of an image and WTP; the financial investment that has to be done has no influence on consumers’ WTP when an image of the reward is included in the leaflet design. Moreover, when testing the overall moderation effect of financial investment on the relation between leaflet design and WTP, we cannot find a significant moderating effect. However, we could find a significant direct effect of financial investment on WTP; this indicates that the financial investment consumers have to make in order to redeem their reward has a positive effect on WTP, thus, the lower the financial investment, the higher the WTP.

The second moderating effect of the number of stamps was also tested on the relation between the three independent variables (image, color, and size) and WTP. From these results it can be concluded that there are some significant moderating effects. The number of stamps to collect moderates the relation of leaflet size on WTP, thus when consumers like the size of a leaflet and more or less twenty stamps have to be collected, the consumers’ WTP in the loyalty program will increase. However, when looking at the moderating effect on the other two relations, we cannot find another significant moderating effect. This means that the number of stamps that have to be collected does not have an influence on consumers’ WTP in a loyalty program. As with the direct effect of an additional financial investment on WTP, also here a direct effect on WTP was found. The last moderating effect that was tested is the influence of sub goals on the relation between a leaflet design and consumers’ WTP. As appeared from the results, there is a moderating effect of sub goals on the relation between the use of images in a leaflet design and the WTP of consumers in a loyalty program. This indicates that including sub goals in a design where also images of the reward are included, are beneficial for the WTP of consumers. However, when taking a closer look at the other results, no significant moderating effect of sub goals on the relation between color and size and WTP was found. This means that there is no overall significant effect of the use of sub goals on consumers’ WTP regarding the leaflet design.

5.3 Limitations and suggestions for further research

Testing the leaflet design of a loyalty program as driver for consumer participation

Testing the leaflet design of a loyalty program as

driver for consumer participation

Testing the leaflet design of a loyalty program as

driver for consumer participation

Master Thesis

MANAGEMENT SUMMARY

PREFACE

CONTENTS

1. INTRODUCTION

2. LITERATURE REVIEW

3. RESEARCH METHOD

Statistical analyses were conducted using

4. RESULTS

5. CONCLUSIONS AND RECOMMENDATIONS