The Paradox of Points: Theoretical Foundation and Empirical - download pdf or read online

By Sören Köcher

ISBN-10: 3658095423

ISBN-13: 9783658095420

ISBN-10: 3658095431

ISBN-13: 9783658095437

In his learn, Sören Köcher presents beneficial insights at the paradoxical results of the significance of a loyalty software medium—i.e. the sheer variety of issues, miles, or stamps credited for each buy and required for gift redemption—on the vital customer judgements in loyalty application memberships. In sum, the result of twelve empirical reviews exhibit that prime value currencies increase the popularity of medium assortment yet entail reluctant medium spending habit. those findings supply very important implications for a extra effective utilization of loyalty courses in enterprise practices. moreover, this dissertation discovers a contravention of 1 of the main basic assumptions of rational selection thought and therefore contributes to a greater figuring out of whilst and why humans deviate from rational decision-making.

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Additional info for The Paradox of Points: Theoretical Foundation and Empirical Evidence of Medium Magnitude Effects in Loyalty Programs

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4 Long-Term Orientation Long-term orientation, the fourth common thread among loyalty programs, highlights that loyalty schemes operate differently from other marketing techniques. For instance, due to their degree of defensive and long-term orientation, loyalty programs can be distinguished from sales promotions and advertising campaigns which are characterized by a clear time line and, accordingly, pursue distinct objectives (Sharp and Sharp 1997). These promotions aim to increase market share through a substantial gain in penetration and a small increase in average purchase frequency (Ehrenberg, Goodhardt, and Barwise 1990).

Gold (15 nights, 10%), Platinum (50 nights, 50%) 3,000 pts. Marriott (Marriott Rewards) $1 = 10 pts. 7,500 pts. Silver (10 nights, 20%), Gold (50 nights, 25%), Platinum (75 nights, 50%) - Starwood (Preferred Guest) 1$ = 2 pts. 2,000 pts. , 2,000 points for a free night at Starwood hotels versus 5,000 points at Hyatt hotels; see also Bagchi and Lee 2011). Second, all illustrated loyalty schemes are characterized by a non-linear medium issuance structure such that the number of earned points per dollar increases as a function of repeat purchase (Leenheer 2004; Hsee et al.

E. participation exclusivity (De Wulf et al. 2003)—has to be specified (Leenheer 2004). Following O’Brien and Jones (1995), opening loyalty programs to a wide range of participants might involve a waste of resources in over-satisfying less profitable customers, while undersatisfying more valuable customers. , membership-fees; Bolton et al. 2000; Kivetz and Simonson 2002; Liu and Yang 2009) as well as non-economic costs in terms of the amount of disclosed personal information through registration and subsequent identification at transactions (Leenheer et al.

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The Paradox of Points: Theoretical Foundation and Empirical Evidence of Medium Magnitude Effects in Loyalty Programs by Sören Köcher

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