آیا برنامه های پاداش ایجاد وفاداری برای خدمات ی کنند؟ : اثر تعدیل رضایت در نوع و زمان پاداش ها

While reward programs have been widely used as a means to engender customer loyalty, it is not clear if the ends are justified. Some researchers argue that we do not fully understand the mechanism underlying reward programs and how it affects consumer acceptability of such programs. In this study, we examine two variables; timing (immediate vs. delayed) and type (direct vs. indirect) of rewards in two service conditions (satisfied vs. dissatisfied). We conduct the experiment in two service settings and the results indicate that when consumers are satisfied, they prefer delayed, direct rewards (of higher values) to immediate, direct rewards. However, when consumers are dissatisfied, they prefer immediate, direct rewards to delayed, direct rewards (of higher values). Interestingly, the preference for direct over indirect rewards is apparent only if the rewards are delayed (for the satisfactory service experience) or immediate (for the dissatisfactory service experience).

As an important component of customer relationship management (CRM), reward or loyalty programs have become an increasingly popular tool for managers to build customer loyalty (O’Brien and Jones 1995; Cigliano et al. 2000; Uncles et al. 2003). In such programs, consumers are given incentives in return for repeat business, which in turn serve as reinforcers that encourage consumers to continue their behavior. Examples of reward programs in the service industries are frequent flyer programs conducted by airlines, cash rebates from credit card companies, and redeemable gifts from banks. However, the effectiveness of reward programs has been questioned. There are divergent views on how best to structure these rewards and whether the ends justify the means (Sharp and Sharp 1997; Cigliano et al. 2000). Given the managerial relevance of reward programs, academics have also recently begun to show interest in this topic (e.g., Kumar and Shah 2004; Magi 2003; Kivetz and Simonson, 2002 and Kivetz and Simonson, 2003). In this study, we investigate how the type and timing of rewards affect customer loyalty for services. Adopting the framework proposed by Dowling and Uncles (1997), type refers to whether the rewards are related or unrelated to the main service in question, whereas timing denotes whether the rewards can be redeemed immediately or at a later time. We examine whether the effectiveness of these reward structures is moderated by customer satisfaction. Specifically, we seek to answer the following questions: • Between redeeming an immediate reward that has lower value and redeeming a delayed reward that has higher value, which one has a stronger effect on customer loyalty? • Similarly, how does relatedness of reward (e.g., getting a free laundry service at a Laundromat vs. getting a food coupon at a Laundromat) affect customer loyalty? • Does customer satisfaction moderate the relative effectiveness of these different reward configurations? The remainder of the paper flows as follows; we first review the relevant literature on reward programs, satisfaction, and loyalty to motivate the hypotheses concerning consumer loyalty response towards various configurations of reward programs under both satisfactory and dissatisfactory conditions. We then conduct an experiment that manipulates three variables (timing, type, and satisfaction) in two service contexts (restaurant and bank). Theoretical and managerial implications are provided, and we conclude with the limitations of our study and suggest directions for future research.

This paper makes useful contributions to both academic literature and managerial practice. There are relatively few existing studies that empirically study reward programs (e.g., Bolton et al. 2000; Roehm et al. 2002; Kivetz and Simonson, 2002 and Kivetz and Simonson, 2003; Nunes and Park 2003; Yi and Jeon 2003). Our empirical results substantiate the conceptual frameworks proposed in the managerial-type literature (e.g., Cigliano et al. 2000; Dowling and Uncles 1997; O’Brien and Jones 1995). Additionally, it provides implications on how these reward programs should be structured so that they can effectively build customer loyalty in service organizations. Future research may investigate and extend this study, taking into account other possible factors that may influence consumers’ choice of reward programs. O’Brien and Jones (1995) suggest that customers evaluate reward according to the cash value, choice of redemption, relevance, aspiration value and convenience. Of these variables, we examine only relevance (“type” in our study) and convenience (“timing”) of redemption in this study. Future studies may investigate how the other factors affect the choice of reward programs and suggest additional methods of structuring reward programs. Additionally, our experiments are constrained to two service organizations, a bank and a restaurant. These two settings can be grouped under “people-processing” service organizations. There are two other types of service organizations, “information-processing” and “possession-processing” (Lovelock 1983). Services that are grouped under the people-processing classification are tangible actions directed to people's bodies. Customers must enter the “service factory” (e.g., bank, beauty salon, hospital, restaurant) in order to receive the service benefits. Information-processing services are core intangible actions directed at both people's minds, such as education and legal advice, and possession-processing services are actions directed at consumer possessions (e.g., car servicing and pet grooming). It is possible that the type of organization could have a moderating effect, for example, consumers in a people-processing setting may experience a higher level of involvement that those in an information-processing or possession-processing setting. As such, future research can replicate the study over a broader range of service organizations. Executive summary Reward or loyalty programs have been widely used since American Airlines introduced its “AAdvantage Program” in 1981. Since that time, reward programs have grown in terms of popularity, and there are now many variations of such programs around the world. They are especially favored by service establishments, including airlines, banks, hotels, supermarkets, restaurants, gasoline stations, and other retailers. Often viewed as a major component of customer relationship management (CRM), reward programs are used as a tool to retain customer loyalty. Advocates for reward programs argue that they work, and that loyal customers are less costly to serve. Hence, in the long run, reward programs are expected to be profitable. However, detractors claim that such programs are widely misunderstood and often poorly applied. They rationalize that when all players in the industry offer similar reward programs, then there is no longer any competitive advantage, and the costs of retaining existing customers and gaining new ones will increase. Ineffective reward programs may hurt more than they help service firms. Worst of all, reward programs, once established, are extremely difficult to discontinue. As such, there is an urgent need to clearly understand the mechanism underlying reward programs and how it affects consumer acceptability of such programs. More specifically, we need to re-examine the key attributes of reward programs and understand their effects in different service conditions. To do this, we conduct an experiment in two service settings (i.e., bank and restaurant), and manipulate the two key attributes of rewards, type and timing, and test their effects on customer loyalty when customers are satisfied or dissatisfied. “Type” indicates that the reward is directly or indirectly related to the service in question, while “timing” refers to the notion that the reward can be redeemed either immediately or at a later time (at a higher value). To illustrate, in the bank context, for every $100 charged to the credit card, a direct-immediate reward is a rebate of $1 credited immediately into the account to offset bank charges, a direct-delayed reward is a rebate of $2 credited immediately into the account, which can be used at the end of the year to offset future monthly bank charges, an indirect-immediate reward is a $1 shopping voucher valid immediately at select department stores, and an indirect-delayed reward is a $2 shopping voucher valid at select department stores during the upcoming Christmas season. Based on a public sample consisting of 205 respondents, our analysis shows that when consumers are satisfied, they prefer delayed, direct rewards (of higher values) to immediate, direct rewards. However, when consumers are dissatisfied, they prefer immediate, direct rewards to delayed, direct rewards (of higher values). What is interesting is that the preference for direct over indirect rewards is apparent only if the rewards are delayed (for the satisfactory service experience) or immediate (for the dissatisfactory service experience). In other words, satisfaction plays an important moderating role on reward type and reward timing. Another noteworthy finding is that that the higher face value of indirect-delayed incentives does not increase customer loyalty in either satisfaction condition. Our results are consistent across both the bank and restaurant service settings, and lead us to conclude that the effectiveness of reward programs is highly dependent on the interplay among service experience, reward type, and reward timing. The findings from this study have significant managerial implications. Firstly, reward programs should be used to strengthen the value proposition of the service firm and not just merely for repeat purchase. Managers should remember that loyalty building should be viewed as a long-term process. To this end, it is essential for companies to offer the correct type of reward programs, and our research indicates that delayed rewards would be more effective in this regard, assuming that the customer is satisfied with the service experience. Real-life evidence such as airline frequent flyer programs and delayed discounts from Laundromats (e.g., ten washes qualify the customer for a free wash) support this conclusion. Secondly, the service organization should strive to provide a positive service experience whenever possible. Our findings imply that delayed, direct rewards would be effective only when customers are satisfied. This further affirms the notion that satisfaction is positively related to customer loyalty.