Asia Marketing Journal

Korean Marketing Association (한국마케팅학회)
권호 표지
DOI QR코드

DOI QR Code

The Synergy Effect of a Corporate-Level Loyalty Program Integration on Customer Equity

  • Received : 2018.04.10
  • Accepted : 2019.01.14
  • Published : 2019.01.31
Download PDF
⟨ Previous Next ⟩

Abstract

This study empirically examines the synergy effect of a corporate-level loyalty program on customer equity (CE) known as the lifetime value of current and future customers (Blattberg et al. 2009). A corporate-level loyalty program refers to a company-wide integration loyalty program at the corporate-level in which subsidiaries (multi-divisions) participate as program members. It does not merely examine whether there is an integration effect of a corporate-level loyalty program from the CE perspective, but it provides practical implications for a firm's strategic focus by identifying which value creation channels (i.e., acquisition, retention, and cross-selling), brand characteristics (i.e., size of the customer base before integration, diversity of products, and sales channel type), and consumer characteristics (i.e., customer relationship stage, transaction amount before integration, transaction period, and number of purchased brands) are affected the most by the synergy effect.

Keywords

Acknowledgement

This research is supported by BK21PLUS Research Fund for Korea University Business School.

References

  1. Money Today, July, 17, 2015. "Women in their 20s are most obsessed with scoring points" (https://news.joins.com/article/18245743)
  2. Blattberg, R., Getz, G., & Thomas, J. S. (2001). Customer Equity: Building and Managing Relationships as Valuable Assets. Boston, MA: Harvard Business School Press.
  3. Rust, R. T., Zeithaml, V. A., & Lemon, K. N. (2000). Driving Customer Equity: How Customer Lifetime Value is Reshaping Corporate Strategy, Free Press.
  4. Bantham, J. H., Celuch, K. G., & Kasouf, C. C. (2003). A perspective of partnerships based on interdependence and dialectical theory. Journal of Business Research, 56(4), 265-274.
  5. Allaway, A. W., Berkowitz, D., & D'Souza, G. (2003). Spatial diffusion of a new loyalty program through a retail market. Journal of Retailing, 79(3), 137-151.
  6. Avery, J., Steenburgh, T. J., Deighton, J. & Caravella, M. (2012). Adding Bricks to Clicks: Predicting the Patterns of CrossChannel Elasticities Over Time. Journal of Marketing, 76(3), 96-111.
  7. Berger, P. D., & Nasr, N. (1998). Customer Lifetime Value: Marketing Models and Applications. Journal of Interactive Marketing, 12(1), 17-30.
  8. Blattberg, R. C., Malthouse, E. C., & Neslin, S. A. (2009). Customer Lifetime Value: Empirical Generalizations and Some Conceptual Questions. Journal of Interactive Marketing, 23(2), 157-168.
  9. Bolton, R. N. (1998). A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction. Marketing Science, 17(1), 45-65.
  10. Bolton, R. N., Lemon, K. N., & Verhoef, P. C. (2004). The Theoretical Underpinnings of Customer Asset Management: A Framework and Propositions for Future Research. Journal of the Academy of Marketing Science, 32(3), 271-292.
  11. Capizzi, M. T., & Ferguson, R. (2005). Loyalty trends for the twenty-first century. Journal of Consumer Marketing, 22(2), 72-80.
  12. Chatterjee, P. (2012). The role of varying information quantity in ads on immediate and enduring cross-media synergies. Journal of Marketing Communications, 18(3), 217-240.
  13. Colombo, R., & Jiang, W. (1999). A stochastic RFM model. Journal of Interactive Marketing, 13(3), 2-12.
  14. Dorsh, M. J., & Carlson, L. (1996). A Transaction Approach to Understanding and Managing Customer Equity. Journal of Business Research, 35(3), 253-264.
  15. Dorotic, M., Fok, D., Verhoef, P. C., & Bijmolt, T. H. A. (2011). Do vendors benefit from promotions in a multi-vendor loyalty program? Marketing Letter, 22(4), 341-356.
  16. Evanschitzky, H., Ramaseshan, B., Woisetschlager, D. M., Richelsen, V., Blut, M., & Backhaus, C. (2012). Consequences of customer loyalty to the loyalty program and to the company. Journal of the Academy Marketing Science, 40(5), 625-638.
  17. Fader, P. S., Hardie, B. G. S. & Lee, K. L. (2005). Counting Your Customers the Easy Way: An Alternative to the Pareto/ NBD Model. Marketing Science, 24(2), 275-84.
  18. Fader, P. S., Hardie, B. G. S., & Shang, J. (2010). Customer-Base Analysis in a Discrete-Time Noncontractual Setting. Marketing Science, 29(6), 1086-1108.
  19. Furinto, A., Pawitra, T., & Balqiah, T. E. (2009). Designing competitive loyalty programs: How types of program affect customer equity. Journal of Targeting, Measurement and Analysis for Marketing, 17(4), 307-319.
  20. Goold, M., & Campbell, A. (1998). Desperately seeking synergy. Harvard Business Review, 76(5), 131-143.
  21. Gupta, S., & Lehmann. D. R. (2003). Customers as assets. Journal of Interactive Marketing, 17(1), 9-24.
  22. Gupta, S., & Zeithaml, V. (2006). Customer Metrics and Their Impact on Financial Performance. Marketing Science, 25(6), 718-739.
  23. Gupta, S., Hanssens, D., Hardie, B., Kahn, W., Kumar, V., Lin, N., Ravishanker, N., & Sriram, S. (2006). Modeling Customer Lifetime Value. Journal of Service Research, 9(2), 139-155.
  24. Hoppe, D., & Wagner, U. (2014). The role of lifetime activity cues in customer base analysis. Journal of Business Research, 67(5), 983-989.
  25. Johnson, K. (1998). Choosing the right program. Direct marketing, 61(2), 36-45.
  26. Kivetz, R., Urminsky, O., & Zheng, Y. (2006). The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention. Journal of Marketing Research, 43(1), 39-58.
  27. Kopalle, P. K., & Neslin. S. A. (2003). The Economic Viability of Frequent Reward Programs in a Strategic Competitive Environment. Review of Marketing Science, 1(1), 1-39.
  28. Kumar, V., & Venkatesan, R. (2005). Who are the multichannel shoppers and how do they perform?: Correlates of multichannel shopping behavior. Journal of Interactive Marketing, 19(2), 44-62.
  29. Kumar, V., George, M., & Pancras, J. (2008). Cross-buying in retailing: Drivers and consequences. Journal of Retailing, 84(1), 15-27.
  30. Lal, R., & Bell, D. E. (2003). The Impact of Frequent Shopper Programs in Grocery Retailing. Quantitative Marketing and Economics, 1(2), 179-202.
  31. Lee, J. J., Capella, M. L., Taylor, C. R., Luo, M., & Gabler, C. B. (2014), "The financial impact of loyalty programs in the hotel industry: A social exchange theory perspective. Journal of Business Research, 67(10), 2139-2146.
  32. Lee, J. W., Song, T. H. & Kim, J. Y. (2012). A Study on the Effects of Inter-firm Coalition Loyalty Programs : Focusing on Customer Acquisition vs. Retention Effects. Journal of the Korean Operations Research and Management Science Society, 38(3), 183-199
  33. Lemon N. K., & Wangenheim, F. V. (2009). The Reinforcing Effects of Loyalty Program Partnership and Core Service Usage. Journal of Service Research, 11(4), 357-370.
  34. Liu, Y. (2007). The Long-Term Impact of Loyalty Programs on Consumer Purchase Behavior and Loyalty. Journal of Marketing, 71(4), 19-35.
  35. Liu, Y., & Yang, R. (2009). Competing Loyalty Programs: Impact of Market Saturation, Market Share, and Category Expandability. Journal of Marketing, 73(1), 93-108.
  36. Marciukaityte, D., Roskelley, K., & Wang, H. (2008). Strategic alliances by financial services firms. Journal of Business Research, 62(11), 1193-1199.
  37. Neslin, S. A., Grewal, D., Leghorn, R., Shankar, V., Teerling, M. L., Thomas, J. S., & Verhoef, P. C. (2006). Challenges and Opportunities in Multichannel Customer Management. Journal of Service Research, 9(2), 95-112.
  38. O'Brien, L., & Jones, H. (1995). Do Rewards Really Create Loyalty? Harvard Business Review, 73(3), 75-82.
  39. Rumelt, R. P. (1982). Diversification strategy and profitability. Strategic Management Journal, 3(4), 359-369.
  40. Rust, R. T., Ambler, T., Carpenter, G. S., Kumar, V., & Srivastava, R. K. (2004). Measuring Marketing Productivity: Current Knowledge and Future Directions. Journal of Marketing, 68(4), 76-89.
  41. Rust, R. T., Lemon, K. N., & Zeithaml, V. A. (2004). Return on Marketing: Using Customer Equity to Focus Marketing Strategy. Journal of Marketing, 68(1), 109-127.
  42. Schmittlein, D. C., Morrison, D. G., & Colombo, R. (1987). Counting Your Customers: Who Are They and What Will They Do Next? Management Science, 33(1), 1-24.
  43. Yoo, S., Hanssens, D. M., & Kim, H. (2012). Marketing and the evolution of customer equity of frequently purchased brands. Working Paper.
  44. Toufaily, E., Ricard, L., & Perrien, J. (2014). Customer loyalty to a commercial website: Descriptive meta-analysis of the empirical literature and proposal of an integrative model. Journal of Business Research, 66(9), 1436-1447.
  45. Varadarajan, P. R. (1986). Horizontal Cooperative Sales Promotion: A Framework for Classification and Additional Perspectives. Journal of Marketing, 50(2), 61-73.
  46. Varadarajan, R. & Rajaratnam D. (1986). Symbiotic Marketing Revisited. Journal of Marketing, 50(1), 7-17.
  47. Venkatesan, R., & Kumar, V. (2004). A Customer Lifetime Value Framework for Customer Selection and Resource Allocation Strategy. Journal of Marketing, 68(4), 106-125.
  48. Verhoef, P. C., & Donkers, B. (2001). Predicting customer potential value an application in the insurance industry. Decision Support Systems, 32(2), 189-199.
  49. Walter, J., Lechner, C., & Kellermanns, F. W. (2007). Knowledge transfer between and within alliance partners: Private versus collective benefits of social capital. Journal of Business Research, 60(7), 698-710.
  50. Yi, Y., & Jeon, H. (2003). Effects of Loyalty Programs on Value Perception, Program Loyalty, and Brand Loyalty. Journal of the Academy of Marketing Science, 31(3), 229-240.