What drives Loyalty Program Perception? A Cross-Country Analysis
In many industries, companies have shifted from a transaction-based to a relationship-based marketing approach, which is reflected by the introduction of loyalty programs. Obviously, loyalty program effectiveness depends on loyalty program design. We relate loyalty program design to loyalty program perception and consider different design ele-ments. Based on a conjoint analysis in fashion retailing in Germany and Switzerland, we find that consumers in both countries prefer cash rewards as well as no direct mailings, no magazines and no payment function. Consumers in Switzerland prefer a card or app and one fashion show per year, while consumers Germany prefer a card only and no fa-shion show. We also find that deal proneness has an effect on relative importance values for reward rate and direct mailings, while gender has an effect on relative importance values for reward type and services. Based on these findings, we derive recommen-dations and discuss limitations.