Journal of Retailing and Consumer Services 24 (2015) 2232

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Journal of Retailing and Consumer Services

journal homepage: www.elsevier.com/locate/jretconser

Effects of loyalty program rewards on store loyalty

Lars Meyer-Waarden n
University Toulouse 1 Capitole, CRM CNRS, IAE School of Management & EM Strasbourg Business School-HuManiS (EA 7308), France

art ic l e i nf o

a b s t r a c t

Article history:
Received 19 December 2013
Received in revised form
31 December 2014
Accepted 15 January 2015
Available online 4 February 2015

This investigation examines consumers' preferred loyalty program (LP) designs across two retail contexts, grocery retailing and perfumery, with varying degrees of personal involvement. The research
employs in-store full prole conjoint analysis by using the following attributes: timing of the reward,
reward compatibility with the store's image, and tangibility.
Our research reveals that the underlying effects of reward types on preferences and intended store
loyalty differ depending on the level of consumers' personal involvement. In sectors with high personal
involvement, compatibility with the store's image and intangible rewards increase LP preference and
loyalty intentions. The time required to obtain the reward (immediate/delayed) has no impact. In sectors
with low personal involvement, immediate and tangible rewards increase LP preference and loyalty
intentions. Compatibility with the store image has no impact.
& 2015 Elsevier Ltd. All rights reserved.

Keywords:
Loyalty program
Reward timing
Reward tangibility
Reward compatibility
Loyalty
Conjoint analysis

1. Introduction
Many rms use customer relationship management instruments, such as loyalty programs (LPs), as key marketing activities
for customer information collection. LPs are vastly popularfor
example, 90% of Europeans and 90% of U.S. shoppers own at least
one loyalty card (Ferguson and Hlavinka, 2009). In 2010, the
number of LP memberships in the United States exceeded 2.1 billion memberships, growing by 16% from the previous year despite
the worldwide recession (Hlavinka and Sullivan, 2011). For example, research estimates that the U.K. pharmacy chain Boots invested 30 million British pounds in the launch of its Advantage
Card LP (Temporal and Trott, 2001), and the U.K. retailer Tesco has
spent an estimated 60 million pounds to operate its Clubcard LP
(Bijmolt et al., 2010).
Despite their popularity, existing research challenges the efcacy of LPs because, in many cases, they offer rewards that fail to
increase loyalty (Leenheer et al., 2007; Liu, 2007; Meyer-Waarden,
2007; Meyer-Waarden and Benavent, 2009). Fewer than half of LP
members report that the programs add value, and the impact of
LPs on customer patronage lags behind most companies' expectations (Ferguson and Hlavinka, 2009). Yet rewards should offer value (Bridson et al., 2008; Garca Gmez et al., 2012; Roehm
et al., 2002). Overall, increasing the benets and decreasing the
costs of using LPs increase loyalty (Demoulin and Zidda, 2008).
n
Correspondence address: 2, rue du Doyen-Gabriel-Marty , F-31000 Toulouse,
France. Fax: 33 5 61 63 56.
E-mail address: meyerwaarden@gmail.com

http://dx.doi.org/10.1016/j.jretconser.2015.01.001
0969-6989/& 2015 Elsevier Ltd. All rights reserved.

Nevertheless, heterogeneity in responsiveness exists across customer segments and industry sectors, as effectiveness depends on
market characteristics. Therefore, this study contributes to research by assessing the following questions that remain insufciently investigated (Bijmolt et al., 2010, pp. 207, 239):
(1) Which type of reward creates customer value and enhances LP
members' patronage intentions? and (2) What is the moderating
role of personal involvement on LP effectiveness?
To contribute to a better theoretical and empirical understanding of the effects of rewards, we propose a conceptual framework that examines how rewards affect LP preferences according to three key variables that have insufciently or not been
empirically investigated (Blattberg et al., 2008). Each of the variables have been studied before, but no one has had all of them
within the same study: (1) reward (in)tangibility, (2) compatibility
with the image of the rm that offers the LP, and (3) time necessary to obtain rewards timing (immediate vs. delayed). We propose that their relative impact on LP preference and loyalty intentions varies depending on consumers' personal involvement in
the product category (Yi and Jeon, 2003). This study thus examines
how different aspects of rewards affect preferences of a LP: type of
rewards (tangibility and compatibility) and timing of rewards. We
conduct conjoint analysis in a French grocery retailer and a perfumery store. After presenting the results, we conclude with a
discussion, managerial implications, and avenues for further
research.

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

23

2. Theoretical background
2.1. Loyalty programs and loyalty
The American Marketing Association refers to loyalty programs
as continuity incentive programs offered by a rm to reward
customers and encourage repeat business. Prior literature uses
different terms, including reward programs, frequency reward
programs, frequent-shoppers programs, and frequent-ier
programs.
We adopt the term loyalty program (LP) to encompass all these
terms and various program designs that contain the following
characteristics (Blattberg et al., 2008; Leenheer et al., 2007): LPs
consist of integrated, structured and ruled (based on collection and
redemption rules) systems of marketing actions that aim to encourage enduring repeat purchases and increase the cost of
switching by providing short- and long-term incentives (MeyerWaarden, 2008). These rewards refer to any abstract (e.g., convenience, hedonic, novelty, social recognition, self-esteem) or
concrete (e.g., economic savings, miles, points, discounts) stimuli
that trigger consumers' internal cognitive responses (Vesel and
Zabkar, 2009; Drze and Nunes, 2011; Kwong et al., 2011; Tietje,
2002). Usually, LP members are rewarded with discounts, goods,
services, personalized offers and tailored marketing efforts, or
preferential treatment (Meyer-Waarden, 2013). To induce sustainable effects on members' loyalty, LP participation and rewards
should increase cost of switching (Bijmolt et al., 2010) and enhance true loyalty, that is increase behavioral (e.g., cross purchases, repeat purchases, mean basket size; Ehrenberg, 1988) and
attitudinal (relationship building through positives attitudes, trust,
attachment; Morgan and Hunt, 1994) loyalty. A LP rewards
members for their loyalty on the basis of their past, current or
future value to the rm, which is usually done through the accumulation of some form of LP currency based on purchase behavior.
Rewards thus help create perceived value and satisfaction; improve economic decision-making and motivation.
2.2. Loyalty program perceived value and preference
Perceived value created is the relationship between the consumer's perceived benets in relation to the perceived costs of
receiving a good or a service, and represents a positive emotional
response (e.g. such as subjective feelings of pleasure or hedonic
enjoyment) as well as a source of satisfaction and motivation,
because the rewards fulll a desire or a goal (Holbrook, 1996;
Bagchi and Li, 2011).
A buyer who commits to an LP considers the costs and efforts
required (e.g., membership fees, provision of personal information
to the rm, switching costs, transportation, changes to purchase
behavior) and compare these costs with the reward value. The
inuence of LPs on member loyalty is contingent on the LP design
(Keh and Lee, 2006). Specically, LP design affects enrollment and
loyalty. If the reward values are higher than the costs, the consumer decides to join the LP and change or increase behavioral
and attitudinal loyalty. The nature and preference of rewards are
thus decisive with regard to consumers' motivation to adopt and
use the LP as well as to change behavior and attitudes.
In this respect, two key analyses variables are recommended
(Blattberg et al., 2008; OBrien and Jones, 1995): (1) reward types,
including tangibility and compatibility with the rm's image, and
(2) reward timing. Yi and Jeon (2003) also suggest considering the
moderating role of personal involvement. Each of the variables has
been studied before, but no one has had all of them within the
same study. We thus propose a conceptual model with three
stages (see Fig. 1). The rst and second stages examine how reward schemes (e.g. timing tangibility, compatibility of rewards)

Fig. 1. Conceptual framework.

affect rst customers' rewards preferences of the LP and second

loyalty intentions. The third stage investigates the moderating role
of personal involvement.

3. Conceptual framework and hypotheses

3.1. Conceptual framework
Customers' value perception is a necessary condition for developing brand loyalty through LPs (OBrien and Jones, 1995). Retailers attempt to meet a wide range of requirements by offering
an array of rewards that cover different dimensions to increase the
preference of an LP (Meyer-Waarden, 2013). Both Roehm et al.
(2002) and Dowling and Uncles (1997) suggest that three elements
of the LP determine its preference and thus can strengthen or
weaken positive associations with the brand, resulting in increased or reduced loyalty: (1) tangibility, (2) compatibility with
the rm's image, and (3) reward timing. However, scant empirical
research has compared these elements.
Transaction theory (Thaler, 1983) explains the value derived by
a customer from a LP exchange, which consists of two drivers:
Acquisition utility represents the economic gain or loss from the
transaction realized within the LP. Transaction utility is associated
with purchase within the LP and represents the pleasure (or displeasure) of the nancial deal per se.
3.1.1. Tangibility of the reward
Reward tangibility depends on the relative level of abstraction.
Tangible or hard benets include monetary incentives (e.g., discounts, vouchers), whereas intangible or soft rewards provide
psychological, relational, emotional, and functional benets (e.g.,
preferential treatment, elevated sense of status, services, special
events, entertainment, priority check-in; Arbore and Estes, 2013;
Drze and Nunes, 2009). Tangible rewards (e.g., free hotel stays,
tickets) may be provided as rewards, but some research suggests
that these forms of acquisition utility have an impact on shortterm behavior but limited effects on relationship quality (Yi and
Jeon, 2003). Many programs now increase the customers' transaction utility, which includes such intangible rewards as privileged
access to websites and members-only newsletters. Empirical evidence suggests that tangible rewards are preferred to intangible
ones and create higher loyalty intentions (likelihood that a consumer will purchase a particular product or service in the future
(Keh and Lee, 2006; Yi and Jeon, 2003). Thus
H1. The (a) preference of an LP (b) and store loyalty intentions are

24

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

higher for tangible than intangible rewards.

3.1.2. Compatibility of the reward with the rm's image
The compatibility of the reward with the rm's image depends
on the overlap with positive associations of the sponsoring company, which reinforce the value of the offer. Direct and compatible
rewards focus on the focal rm (e.g., Buy 1 perfume, get a beauty
service), whereas indirect incompatible rewards are unrelated
(e.g., Buy 1 perfume, get a DVD). The more signicant the
overlap, the more compatible the reward is with the focal rm.
Acquisition utility is high for compatible benets of the reward
program and includes economic rewards, which some research
suggests may be more effective than incompatible awards (Kivetz,
2005; Yi and Jeon, 2003). For example, consumers who purchase a
perfume are likely to appreciate earning a beauty service. Not only
is the relationship between the loyal behavior and program outcome consistent, but also it is clear that these customers are interested in the principal product cosmetics and beauty services. In
contrast, evidence suggests that providing incompatible rewards,
typically, for extraneous goods or services, is a suboptimal reward
practice and may even be harmful to promoting loyalty (cf. Kim
et al., 2001). Thus
H2. The (a) preference of an LP (b) and store loyalty intentions are
higher for compatible than incompatible rewards.
3.1.3. Reward timing
Reward timing affects illusionary progress to obtain the LP
gratication, which in turn enhances post-enrollment inferences
(e.g., pursuit, loyalty, recommendation likelihood; Bagchi and Li,
2011; Kivetz et al., 2006). Rewarding in LPs may vary in the timing
between the purchase behavior and the actual reward redemption.
The time required to obtain rewards is thus a key variable, inuencing both motivation and behavior (Bootzin et al., 1991; Hitt
et al., 1992). This shaping process usually occurs through two
mechanisms resulting in successive reinforcements: points pressure and rewarded behavior. The points' pressure mechanism is
the short-term impact, in which customers increase their purchase
rate to earn rewards. Conversely, the rewarded behavior mechanism is the long-term impact, in which clients increase their
purchase rate after they have received the reward (Taylor and
Neslin, 2005). In designing LPs, managers therefore must decide
whether to offer immediate or delayed rewards, such that consumers must engage in the related effort for less or more time to
obtain the reward (Drze and Nunes, 2006; Nunes and Drze,
2006; Sorman, 1998). Empirical evidence suggests that, preferences for reward timing vary under a number of situations.
Consumers' preferences regarding rewards' timing shift as consumer effort increases (Kivetz, 2003). When the required consumer effort and timing are low, consumers prefer immediate lowmagnitude, guaranteed rewards. But as required effort and timing
increase, they prefer larger rewards, even if they are less certain,
providing evidence of a lottery effect. Nevertheless, all else being
equal, customers prefer immediate rewards whereas rms prefer
delayed gratications to build exit barriers (Bagchi and Li, 2011; Yi
and Jeon, 2003). Thus
H3. The (a) preference of an LP (b) and store loyalty intentions are
higher for immediate than delayed rewards.
3.1.4. Personal consumer involvement as moderator variable
Personal involvement with a product has gained a central place
in the consumer research literature for the past three decades
(Lesschaeve and Bruwer, 2010; Quester and Lim, 2003) as it is
thought to have considerable inuence over the consumer behaviors and the decision making process. The moderating inuence

of involvement on relationships between the marketing variables

(including LPs) and consumers' attitudes, brand preference, perceptions, satisfaction, loyalty has been established (Laurent and
Kapferer, 1985; Traylor and Joseph, 1984). Although there are
various views of involvement, it is generally accepted that a consumer's personal involvement in a product category reects a state
of motivation, awareness, importance, attraction, interest, goaldirected emotional state that determines the personal relevance to
products or services in a particular context of a purchase decision
(Laurent and Kapferer, 1985). Involvement thus stems from the
consumer's perception that the product class meets important
values, goals, or interests while a consumer takes a choice decision. Most literature classies involvement as either high or low
(Aurifeille et al., 2002; Celsi and Olson, 1988). The consequences of
perceived pertinence of a product category (high or low) include a
search for and processing of information and decision-making
(Zaichkowski, 1985). High- and low-involvement consumers are
believed to behave differently (Bei and Widdows, 1999). Consumers with high involvement having a high degree of interest for
the product or service, tend to be information-seekers resulting in
a concomitant degree of knowledge and seek to maximize expected satisfaction through an extensive choice process (Laurent
and Kapferer, 1985; Hollebeek et al., 2007; Barber et al., 2008).
Therefore, these consumers segments go through extensive stages
of awareness, comprehension attitudes and behaviors (Laurent
and Kapferer, 1985).
As some product categories or sectors involve their consumers
more than others we suggest that the inuence of consumers'
personal involvement acts as a moderator of the process in which
the type of LP rewards (compatibility, tangibility, timing) operate
on preferences and loyalty intentions.
In situations with high personal consumer involvement, for
top-range or high-preference brands with high competitor differentiation, the brand purchased offers one of the primary motivations, not the LP reward (Roehm et al., 2002). Customers participate more actively in the search for information, and information
about the product or brand becomes more important than reward
information. Therefore, value derives from the intrinsic characteristics of the product or the brand itself, not from the LP rewards (Rothschild and Gaidis, 1981). Thus, customers perceive
more value from intangible rewards that are compatible with the
image or value proposition of the rm or the brand offering the LP,
leading to high goal congruity and transaction utility (Daryanto
et al., 2010). Even if customers prefer immediate rewards, all else
being equal, delayed rewards are probably more viable in high
personal involvement conditions (Daryanto et al., 2010). Consumers who are highly involved with a LP are more ready to wait
for delayed rewards with high value rather than experiencing
more immediate, lower-value rewards (Keh and Lee, 2006). The
immediacy of the reward becomes secondary because clients focus
more on the attributes of the brand than on the reward (Roehm
et al., 2002). Thus, customers are more likely to accept intangible,
delayed, uncertain future rewards with higher value (Keh and Lee,
2006). The consequences of these rewards creating transaction
utilities should include more sustainable loyalty and relationship
motivation around the brand (Keh and Lee, 2006; Morgan and
Hunt, 1994; Yi and Jeon, 2003), rather than the program, by enhancing customers' brand associations and attitudinal commitment (e.g., a sense of belonging; Dowling and Uncles, 1997), because the intangible and direct nature of the rewards does not
interfere with the brand or draw attention away from the brand's
intrinsic characteristics (Roehm et al., 2002; Yi and Jeon, 2003;
Drze and Nunes, 2009; Phillips Melancon et al., 2010). Behavioral
reinforcement (rewarded behavior) due to the satisfaction with
the rewards, combined with a learning effect due to future rewards, emerges (Frisou and Yildiz, 2011; Rothschild and Gaidis,

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

25

1981; Taylor and Neslin, 2005). Consumers who are satised with
a LP are more ready to wait for delayed rewards with high value
rather than experiencing more immediate, lower-value rewards.
These results are consistent with the notion that high-involvement
consumers are ready to wait for delayed rewards (Yi and Jeon,
2003). Considering these explanations we posit therefore the following hypotheses. In high personal involvement conditions:

(Rothschild and Gaidis, 1981). Points pressure behavior, not

combined with a learning effect due to future rewards, thus
emerges (Frisou and Yildiz, 2011; Taylor and Neslin, 2005). With
the reward in hand, consumers have no reason to buy more and
return to old habits (Meyer-Waarden, 2013). Considering these
explanations we posit therefore the following hypotheses: In low
personal involvement conditions:

H4. The (a) preference of an LP (b) and store loyalty intentions are
higher for intangible than tangible rewards.

H7. The (a) preference of an LP (b) and store loyalty intentions are
higher for tangible than intangible rewards.

H5. The (a) preference of an LP (b) and store loyalty intentions are
higher for compatible than incompatible rewards.

H8. The (a) preference of an LP (b) and store loyalty intentions are
not different for compatible than incompatible rewards.

H6. The (a) preference of an LP (b) and store loyalty intentions are
not different for immediate and delayed rewards.

H9. The (a) preference of an LP (b) and store loyalty intentions are
higher for immediate than delayed rewards.

On the other hand, in situations with low personal involvement, for low-range or low-preference brands with low competitor differentiation, the LP reward is one of the primary motivations, not the brand purchased. Purchases are characterized by
high inertia and geographic proximity. Preference is derived from
the LP rewards, and less from the intrinsic characteristics of the
product, brand or store itself. This causes customers to regard the
rm's reward compatibility as secondary and the tangibility and
reward timing as primary creating acquisition utilities and not
transaction utilities (Rothschild and Gaidis, 1981). Thus, customers
perceive more value from immediate, tangible rewards regardless
of whether these rewards have high goal congruity or are (in)
compatible with the image of the rm offering the LP (Daryanto
et al., 2010). The concrete features of an immediate, tangible reward, such as face value or presentation (e.g., percentages, dollar
discounts), are more relevant for determining their favorability
(Roehm et al., 2002). Though attractive to customers, such rewards
might cause inefciency due to high unit costs (Palmatier et al.,
2009) and may create interference in attention to the brand's intrinsic characteristics, which might induce spurious and shortterm loyalty because customers do not necessarily search for a
stronger relationship with the company (Keh and Lee, 2006;
Phillips Melancon et al., 2010; Yi and Jeon, 2003). Delayed rewards
are therefore less attractive than immediate ones (Keh and Lee,
2006). Consumers who are not highly involved with a LP are less
ready to wait for delayed rewards with high value and want to
experience more immediate, lower-value rewards (Keh and Lee,
2006). Alternatively, dissatised consumers prefer more immediate and lower-magnitude rewards (Keh and Lee, 2006). These
results are consistent with the notion that low-involvement consumers prefer more immediate rewards (Yi and Jeon 2003). Consumers do not change their purchasing behavior substantively but
rather make the most of the immediate rewards before resuming
habitual behaviors, without any reinforcement in the long run

Our model thus examines how the rewards (tangibility, compatibility, and reward time) affect the preference of the LP and
induce store loyalty intentions. Personal involvement serves as a
moderator variable (for a summary of our hypotheses, see Table 1).

4. Methodology and data

We rst develop our scenarios, questionnaire measure instruments and pretest them in order to purify them by a measurement
model analysis. We then apply the questionnaire scales to randomly selected LP members in two sales outlets situated in Toulouse (France). One of the points of sales belongs to a market
leading grocery retailer in France (20% market share just behind
Carrefour with 20.5%; Kantar May 2014), with 561 self-service
stores; the other outlet belongs to a French leader in the distribution of high value cosmetics, with 1220 points of sales. These
two settings differ in the degree of personal involvement (personal
involvement in the purchase of grocery goods should be lower
than in perfume purchases; Zaichkowski, 1985) in order to see if
our results hold in these different consumption domains. Perfumeries as a product category have all the attributes that Laurent
and Kapferer (1985) argue are the source of involvement. It has the
ability to provide the consumer with the pleasure value. Furthermore, this category has a signicant sign value and is perceived by
some as an important product. There is also a perceived risk when
purchasing a perfume or cosmetics.
4.1. Conjoint proles
We employ a full prole conjoint analysis. Conjoint analysis is
suitable to test ctive proles. The method offers a realistic choice
simulation and calculates global utility or preference scoresthat
is, preferences for a product based on global judgments of the full

Table 1
Hypothesized effects of rewards on a) LP preference b) store loyalty intentions.
H1: Tangibility-(a) LP preference, (b) store loyalty intention
H2: Compatibility-(a) LP preference, b) store loyalty intention
H3: Timing of-(a) LP preference, (b) store loyalty intention

Tangible 4 intangible
Compatible 4incompatible
Immediate4delayed

High personal category involvement

H4: Tangibility-(a) LP preference, (b) store loyalty intention
H5: Compatibility-(a) LP preference, (b) store loyalty intention
H6: Timing of-(a) LP preference, (b) store loyalty intention

Intangible4 tangible
Compatible 4incompatible
Immediate delayed

Low personal category involvement

H7: Tangibility-(a) LP preference, (b) store loyalty intention
H8: Compatibility-(a) LP preference, (b) store loyalty intention
H9: Timing of-(a) LP preference, (b) store loyalty intention

Intangibleo tangible
Compatible incompatible
Immediate4delayed

Notes: The 4 sign indicates stronger preference (utility) and intended loyalty, the sign means equal preference (utility) and intended
loyalty, and the o sign reveals weaker preference (utility) and intended loyalty.

26

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

Table 2
Orthogonal array and holdout sample.
Attribute
Level

Compatibility
Strong (1)
Weak (2)

Validation sample
Prole 1
1
Prole 2
1
Prole 3
1
Prole 4
1
Prole 5
2
Prole 6
2
Prole 7
2
Prole 8
2
Holdout sample
Prole 1
Prole 2

1
2

Table 4
Discriminant and convergent validity: Personal involvement.
Tangibility
Tangible (1)
Intangible (2)

Timing of reward
Immediate (1)
Delayed (2)

1
1
2
2
1
1
2
2

1
2
1
2
1
2
1
2

Importance

2
1

1
2

proles (Green and Srinivasan, 1990). Extensive literature has

shown its robustness and adequacy since the early work of Green
and Srinivasan (in the 1970s).
Two sets of eight ctitious LP proles, generated by an orthogonal design (SPSS Orthoplan), feature three attributes with two
levels each (eight proles; see Tables 24):
1. Tangibility of the reward: tangible or intangible.
2. Compatibility of the reward with the image of the store: strong
or weak.
3. Time before obtaining the reward: immediate or delayed.
To test for predictive validity, we add a holdout sample of two
supplementary LP proles generated by SPSS to the eight proles
from the validation sample.
Next, 20 experts representing the two stores (e.g., program,
outlet, or marketing managers) identify rewards that correspond
to each hypothetical prole in the conjoint design. To ensure
comparable programs, the monetary value of the reward consistently averages around 6% (Yi and Jeon, 2003). For example, an
immediate 4 reward corresponds to 6.2% of the value of the

Interest
Attraction
Sign value

Importance

Interest

Groc

Perf

Groc

.83a
.68
.02n
.004
.53n
.29
.17n
.03

.90a
.81
.06n
.003
.22n
.048
.09n
.008

.94a
.89
.16n
.02
.07n
.00

Attraction

Sign Value

Perf

Groc

Perf

Groc

Perf

.86a
.74
.16n
.025
.06n
.003

.79a
.63
.31n
.09

.8a
.64
.28n
.078

.89a
.80

.79a
.62

a
Diagonal elements are the square roots of the AVE of the concerned constructs or factors.
n
Signicant at p o .01.

average shopping basket of 60 in both stores. A 30 delayed reward, obtained after about eight purchases of 60 on average (or
480 in total), similarly corresponds to a 6.2% value (for the hypothetical programs of both stores, see Appendix). Pretests of
these proles (N 420 students form the universities Toulouse and
Strasbourg, France) show that the comprehension of the attributes
and levels is well understood for the respondents and conrm the
credibility, comparability, and clarity of the conjoint design.
4.2. Measurement scales and purication
Store loyalty intentions and involvement are measured with
questionnaire items, while the LP attributes (compatibility, time
and tangibility) and their respective levels are not measured directly via questionnaire as they appear in the conjoint scenarios.
The conjoint measurement methodology calculates the partial
utilities or preferences of the attribute levels (compatible/incompatible, tangible/intangible, delayed/immediate) from the ordinal ranking of the eight full proles by using an OLS regression
(see point 4.4).
The measure of personal involvement relies on Zaichkowski's
(1985) semantic differential scale. All items used ve-point Likert

Table 3
Measurement model (CFA): personal involvement.
Size

Shopping in the store

Grocery

Perfumery

Importance/pertinence

is important (5).not important (1) to me.

is essential (5) .not essential (1) to me.
Variance extracted
Cronbach's alpha

.988
.973
25%
.96

.982
.964
23%
.86

Interest

is interesting (5) not interesting (1) to me.

is of major concern (5) no concern to me (1).
Variance extracted
Cronbach's alpha

.781
.768
19%
.83

.744
.756
18%
.89

Attraction

is valuable (5) not valuable (1) to me.

is vital (5) not vital (1) to me.
worries me (5) .does not worry me (1).
Variance extracted
Cronbach's alpha

.849
.718
.609
18%
.83

.939
.919
.866
18%
.89

Sign value

means a lot (5) not means a lot (1) to me.

is of great value (5) is of no value to me (1).
Variance extracted
Cronbach's alpha

.881
.789
13%
.81

.985
.975
11%
.87

Item removed

is very exciting not very exciting to me

2/sig
RMSEA o .05
GFI/AGFI/CFI Z .90

2.58/.2
.04
.98/.97

2.88/.5
.04
.96/.95

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

27

scales (1 strongly disagree to 5 strongly agree), such that

respondents indicated their degree of agreement with a series of
statements about the stimulus object. This scale focuses on the
personal relevance, interest, and attraction of the category. First,
an exploratory factor analysis (oblimin rotation) done with the
above mentioned student sample (N 420) highlights four factors
(Zaichkowski, 1985) that account for 75% and 70% of the variance
in the grocery retailer and perfumery stores, respectively: importance or pertinence, interest, attraction, and sign value (Gerbing and Anderson, 1988). Cronbach's alphas range from .85 and .95
for the dimensions, which thus appear reliable. We perform two
conrmatory factor analyses (CFA) on the basis of respectively
randomly selected 401 grocery retailer and 376 perfumery LP
members (these respondents are not included in the nal study).
All indicators provide evidence of good model t (GFI 4.9;
AGFI4 .8, RMSEA o.05; 2 (CMIN) 40.1; Fornell and Larcker,
1981). The Cronbach's alpha, are again all higher than.80 for the
four dimensions, which conrms reliability. We demonstrate
convergent validity (all item loadings Z.7 on the latent variable).
Discriminant validity is conrmed (latent variables share more
variance with their respective items than with other latent variables and the variance extracted for all constructs is greater than
the generally accepted value of .50; Fornell and Larcker, 1981). We
perform a manipulation check on personal involvement with the
401 grocery retailer and 376 perfumery LP members. The average
aggregate score of involvement is higher for the perfumery than
for the grocery-retailing store (4.1 vs. 1.7; p o.01).
Finally, the behavioral store loyalty intention is measured by a
Juster scale (0 no intention to repurchase in the store,
100 absolutely sure to repurchase in the store), which assesses
the likelihood that a consumer will purchase in the store in
question systematically for all relevant purchases in the future
because of its LP (Uncles and Lee, 2006; Wright et al., 2002).
Previous research has found that the scale in its many applications
is superior to other intentions scales as a predictive measure of
future purchase behavior (Brennan and Esslemont, 1994).

perfumery than in the grocery store (3.7 vs. 1.6; p o.01; Table 6).
Next, respondents read the eight ctitious LP proles and rewards corresponding to each store (see Appendix) and classify
these descriptions in order of preference, from the most desired
(1) to the least (8). A random rotation before each survey helps
avoid systematic bias. For each LP, respondents indicate behavioral
store loyalty intentions, due to the LP, on the 0100% loyalty intention scale. Finally, as a test of predictive validity, a holdout
sample of two supplementary LP holdout proles (see Appendix)
undertakes the same procedure of preference classication from
most desired (1) to the least desired (2). These evaluations do not
enter into the calculation of partial utilities in the conjoint analysis. For cross-validation, we randomly divide each sample in half,
to obtain four sub-samples (N1Grocery 500, N2Grocery 499;
N1Perfumery 550, N2Perfumery 550).

4.3. Final surveys

5.1. Overall results for the whole sample

Between January and September 2012, 999 LP members of the

grocery retailer and 1100 LP members of the perfumery are randomly selected in the outlets of Toulouse to participate in personal
interviews that last 15 min. Survey times and dates range from
10:00 A.M. to 8:00 P.M., Monday to Saturday. All gender and age
categories are well represented. In total, 8290% hold loyalty cards
with the respective stores for more than a year (Table 5).
The interviews begin with questions about the level of personal
involvement when purchasing from the outlet in question. For the
subsequent tests we use the average aggregate score of personal
involvement that is signicantly higher for purchases in the

The reward timing is the top choice criterion (36%), followed by

reward tangibility (35%) and compatibility (29%), for determining
LP preference (Table 8). Preferences are higher for immediate then
delayed rewards (.36 vs.  .36), for tangible than for in intangible
rewards (.23 vs. .23), and compatible than incompatible rewards
(.19 vs.  .19). H1a, H2a and H3a are conrmed.
Two regression models are estimated measuring the impact of
(a) the relative importance of rewards' attributes (time, tangibility,
compatibility) as well as personal involvement and (b) the conjoint partial utilities (preferences) of attribute levels (immediate/
delayed; strong compatibility/weak compatibility; tangible/intangible) on intended store loyalty (measured on the 0100%
Juster Scale). The KolmogorovSmirnov tests are not signicant
(p 4.05), so the normality postulate is respected. The values of the
DurbinWatson tests and the variance ination factor are less than
2, indicating that multicollinearity is not a problem (see
Tables 9 and 10).
The regression model measuring the impact of the relative
importance of rewards' attributes on store loyalty shows that
timing has a negative impact (b  .42, po .01), tangibility
(b .36) has a positive inuence on loyalty intentions (p o.01).
Reward compatibility with the store's image as well as personal
involvement are not signicant (p 4.1) (Table 9).
The regression model measuring the impact of the conjoint
partial utilities of attribute levels (preferences) on store loyalty
intentions, shows that immediate (b.24), compatible (b .31)
and tangible (b.29) rewards have positive (and higher)

Table 5
Sample description.
Grocery (%)

Perfumery (%)

Gender
Female
Male

55
45

53
47

Age
1630
3145
46

30
37
33

29
35
36

LP membership
Less than one year
More than one year

10
90

18
82

4.4. Assessment of partial utilities and LP preferences

We employ the SPSS Conjoint using an OLS regression (using
the ranking of the 8 proles) to calculate for each individual
(N 999 LP members of the grocery retailer, N 1100 LP members
of the perfumery) the partial utilities of the attribute levels
(compatible/ incompatible, tangible/intangible, delayed/immediate). An additive linear model without interactions between
attributes ts best according to a test of predictive validity (Green
and Srinivasan, 1990), in which the theoretical and real utilities of
both holdout samples are compared. The predictive validity of the
additive linear model without interactions is better (p o.01) than
that with the interactions. The correlations of the theoretical
(calculated on the basis of partial utilities) and actual preference
rankings are high for all samples and subsamples (Groc .91,
Perf .85; N1Groc .89, N2Groc .93; N1Perf .83, N2Perf .87;
see Table 7).

5. Results

28

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

Table 6
Personal involvement.
Size

Shopping in the store

Grocery

Perfumery

Total

Importance/pertinence

is important (5).not important (1) to me.

is essential (5) .not essential (1) to me.

1.5
1.5

3.9
3.5

2.7
2.5

Interest

is interesting (5) not interesting (5) to me.

is of major concern (5) no major concern to me.
is valuable (5) not valuable (1) to me.
is vital (5) not vital (1) to me.
worries me (5) .does not worry me (1).

2.1
1.5
1.6
1.1
1.5

4.5
3.5
3.7
2.9
3.7

3.3
2.5
2.7
2.0
2.6

means a lot (5)does not mean anything (1) to me.

is of great value (5) is of no value to me (1).

1.8
1.9

3.8
4.2

2.8
3.1

1.6nn

3.7nn

2.6

Attraction

Sign value

Involvement average (over the 10 items) by sector

Scales range from 1 to 5.
nn

Signicantly different at p o.01.

Table 7
Predictive validity: correlation of prediction rst choices in the
holdout sample.

Table 10
Effects of conjoint partial utility levels on intended store loyalty.
Constant

Model without interaction

Model with interactions

Grocery: .91n
Perfumery: .85n
N1Groc .89n, N2Groc .93n
N1Perf .83n, N2Perf .87n

Grocery: .10
Perfumery: .11
N1Groc .09, N2Groc .11
N1Perf .11, N2Perf .11

Tangible
Intangible
Strong
compatibility
Weak
compatibility
Immediate

Table 8
Relative importance of attributes and conjoint partial utility levels (total sample
N 2099 grocery retailer and perfumery).
Relative importance
attribute

Level

Conjoint partial
utility

Time

36% (1)

Immediate
Delayed
Strong
Weak
Tangible
Intangible

.36
 .36
.19
 .19
.23
 .23

Compatibility 29% (3)

Tangibility

35% (2)

Note: The conjoint partial utility is set equal to preference.

Total
sample

Grocery
retailer
2.5

Perfumery
2.8

Scheff test differences (grocery

vs. perfumery)

Standardized regression coefcients

Time
Compatibility
Tangibility
Personal
involvement
R2
DurbinWatson
Kolmogorov
Smirnov
nn

po .01,

 .42 nn,
t 5.95
.25 ns,
t .61
.36 nn,
t 5.56
.20 ns,
t .41
.64
1.63
.34

 .83 nn,
t 6.24
.01 ns,
t .81
.75 nn,
t 4.23
.02 ns,
t .73
.63
1.61
.38

p o .05, ns: non-signicant.

 .009 ns,
t .24
.40 nn, t 8.75

nn

 .029 n,
t 3.35
.39nn, t 5.99

nn

.65
1.62
.29

Perfumery
3.49

Scheff test differences (grocery

vs. perfumery)

Delayed
R2
DurbinWatson
Kolmogorov
Smirnov
nn

p o .01,

.29 n,
t 4.34
 .24 n,
t 3.32
.31 n,
t 2.56
 .16 n,
t 2.12
.24 n,
t 3.23
 .15 n,
t 2.23
.65
1.75
.70

.38 n,
t 3.61
 .30 n,
t 3.28
.08 ns,
t .61
 .03 ns,
t .73
.48 n,
t 3.75
 .23 n,
t 2.92
.64
1.89
.66

.20 n, t 4.38
n

 .18 , t 3.39

, F 33.2

, F 9.9

nn

, F 92.3

 .30 n,
t 4.61
.01 ns, t .51

nn

, F 94.32

nn

, F 83.61

 .08 ns,
t .92
.67
1.67
.75

nn

, F 95.9

.54

nn

, t 6.64

p o .05, ns: non-signicant.

Table 11
Test of the moderator role of personal involvement in the store category (grocery/
perfumery).

Table 9
Effects of the relative importance of attributes on intended store loyalty.
Constant

Grocery
retailer
3.43

Standardized regression coefcients

Differences between methods are signicant at p o .01.

Attribute

Total
sample

, F 96.3

nn

, F 99.1

2 Value

df

LP attributes-preference
Independent
Constrained

3815.51
3920.38
104.86
.02

2178
2256
78

LP attributes-loyalty intentions
Independent
Constrained

4631.12
4799.76
168.64
.01

2518
2639
121

, F 97.03

nn

, F 89.12

inuences, whereas delayed (b  .15), compatible (b  .16) and

intangible (b  .24) rewards have negative (thus lower) inuences (p o.05) (Table 10). The compatibility levels (strong/weak)
are not signicant (p 4.1). H1b, H2b and H3b are conrmed.

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

Table 12
Relative importance of attributes and conjoint partial utility levels (subsamples
grocery and perfumery).
Grocery retailer
Attribute

Relative importance attribute

Level

Sample

Total N 999 (subsample N1 500/N2499)

Time

50% (51%/49%)

Immediate

(1)

Delayed

nn

a)

Compatibility 10% (9%/11%)

(3)

Strong
Weak

a)nn
Tangibility

40% (42%/38%)

Tangible

(2)

Intangible

a)n

Conjoint partial
utility

.50 (.51/.49)
s .14
 .50 (  .51/  .49)
s .14
b)nn, F 89.12
.10 (.09/.11)
s .06
 .10 (  .09/  .11)
s .06
b)ns F 1.23
.39 (.42/.36)
s .12
 .39 (  .42/  .36)
s .12
b)n, F 41.61

Perfumery
Attribute
Sample

Relative importance
Level
Conjoint partial
attribute
utility
Total N 1100 (subsample N1 550/N2 550)

Time

22% (23%/21%)

Immediate

(3)

Delayed

nn

a)

Compatibility 48% (49%/49%)

(1)

Strong
Weak

a)
Tangibility

30% (31%/29%)

Tangible

(2)

Intangible

a)
2

.22 (.23/.21)
s .09
 .22 (  .23/  .21)
s .09
b)ns, F 3.1
.47 (.47/.47)
s .17
 .47 (  .47/  .47)
s .17
b)nn, F 127.2
.30 (.30/.30)
s .13
 .30 (  .30/  .30)
s .13
b)n, F 32.3

a) Test difference importance attributes (grocery vs. perfumery):

n
po .05, ns: non-signicant.
b) Anova: nn p o.01, n po .05, ns: non-signicant.

nn

po .01,

5.2. Moderating effects of personal involvement according to the

retailing contexts
A 2(compatible vs. in compatible)  2(immediate vs.
delayed)  (tangible  intangible) between-subjects ANOVA with a
post-hoc Scheff test shows that the two grocery contexts (coded
for this target with 1 grocery retailing with low involvement, and
2 perfumery with high involvement) differ in terms of the impact of (a) the attributes and, as well as (b) the conjoint partial
utilities of attribute levels on LP preferences and intended store
loyalty (see Tables 9, 10, and 12). A test of the moderator personal
involvement with a multi-group analysis is realized with AMOS
(Hayes and Matthes, 2009) and shows signicant differences between the two grocery contexts (see Table 11). A 2 comparison of
the (un)constrained models supports the moderating effects of
personal involvement on LP reward scheme preferences
(2 3.815, 2 3.920, p o.05) and nally store loyalty intentions
(2 4.631, 2 4.799, po .01).
In the grocery retailer store, with low personal involvement,

29

the reward timing is the top choice criterion (50%), followed by

reward tangibility (40%) and compatibility (10%), for determining
LP preference (see Table 12). The same results appear across both
sub-samples (N1Grocery, N2Grocery). In the perfumery, with high
personal involvement, the compatibility of the reward with the
retailer's image is the most important variable (48%), followed by
tangibility (30%) and timing (22%), for both the total sample and
the sub-samples. A 2 test is signicant (p o.01 and p o.05) and
shows that the importance of the attributes differ in both sectors.
In the perfumery, with high personal involvement, tangibility
has a signicant main effect on LP preferences (F(32.3), p o.01).
Preferences are higher for tangible than for in compatible rewards
(.30 vs. .30, p o.01). We reject H4a (as preferences are not higher
for intangible than tangible rewards). Compatibility has a signicant main effect on LP preferences (F(127.2), po .01). LP preferences of the LP are higher for compatible than for in compatible
rewards (.47 vs.  .47, p o.01). We conrm H5a. The main effect of
timing of reward is not statistically signicant (F(3.1), p4 .1), even
if the preferences are higher for immediate and delayed rewards
(.22 vs.  .22, but p 4.1). We thus conrm H6a (the preference is
not different for immediate and delayed rewards).
In the grocery retailer store, with low personal involvement,
tangibility has a signicant main effect on LP preferences (F(41.61),
po.05). Preferences are higher for tangible than for in intangible
rewards (.39 vs.  .39, po.05). We conrm H7a. Compatibility has
not a statistically signicant effect on LP preferences (F(1.23), p4.1),
even if the preferences of the LP are higher for compatible than for
incompatible rewards (.10 vs. .10, p4.1). We conrm H8a (the
preference is not different for compatible and incompatible rewards). The main effect of timing of reward is signicant (F(89.12),
po.01). The preferences are higher for immediate then delayed
rewards (.50 vs.  .50, po.01). We thus conrm H9a.
The regression model measuring the impact of the relative
importance of rewards' attributes on store loyalty shows that for
the perfumery, compatibility has the greatest inuence on behavioral store loyalty intentions (b .40, p o.01). Tangibility exerts a
negative impact on this variable (b  .029, p o.05), and time
before obtaining the reward is not signicant (p4 .1). Personal
involvement has a positive (b.39) signicant impact on loyalty
(p o.01) (see Table 9). Conversely, for the grocery retailer, tangibility (b .75) has the greatest inuence on loyalty intentions
(p o.01). Reward timing has a negative impact (b  .83, p o.01),
and compatibility with the store's image as well as personal involvement are not signicant (p 4.1).
The regression model measuring the impact of the conjoint
partial utilities of attribute levels (preferences) on store loyalty
intentions, shows that in the perfumery store, strongly compatible
(b .54) and tangible (b.20) rewards increase behavioral store
loyalty intentions, whereas weak compatibility (b  .30) and intangible rewards (b .18) have negative inuences (p o.05) (see
Table 10). H4b (intangible rewards increase loyalty intentions
more than tangible ones) is thus rejected; H5b (compatible rewards increase loyalty intentions more than incompatible ones) is
conrmed. The time elapsed before obtaining the reward (immediate /delayed) is not signicant (p 4.1). H6b (no difference of
the impact of immediate or delayed rewards on loyalty intentions)
is conrmed.
For the grocery retailer, immediate (b .48) and tangible
(b .38) rewards have positive inuences, whereas delayed
(b  .23) and intangible (b  .30) rewards have negative inuences (p o.05). The compatibility levels (strong/weak) are not
signicant (p 4.1). H7b (tangible rewards increase loyalty intentions more than intangible ones), H8b (no difference of the impact
of compatible or incompatible rewards on loyalty intentions) and
9b (immediate rewards increase loyalty intentions more than delayed ones) are conrmed.

30

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

Table 13
Summary of results and hypotheses.
H1: Tangibility-(a) LP preference, (b) loyalty intention
H2: Compatibility-(a) LP preference, (b) loyalty intention
H3: Timing of-(a) LP preference, (b) loyalty intention

Tangible 4 intangible
Compatible 4incompatible
Immediate4delayed

Valid./valid.
Valid./valid
Valid./valid.

High personal category involvement

H4: Tangibility-(a) LP preference, (b) loyalty intention
H5: Compatibility-(a) LP preference, (b) loyalty intention
H6: Timing of-(a) LP preference, (b) loyalty intention

Intangible 4tangible
Compatible 4incompatible
Immediatedelayed

Reject./reject
Valid./valid
Valid./valid

Low personal category involvement

H7: Tangibility-(a) LP preference, (b) loyalty intention
H8: Compatibility-(a) LP preference, (b) loyalty intention
H9: Timing of-(a) LP preference, (b) loyalty intention

Intangible o tangible
Compatible incompatible
Immediate4delayed

Valid./valid.
Valid./valid
Valid./valid.

Notes: The 4 sign indicates stronger preference (utility) and intended loyalty, the sign means equal preference (utility) and intended loyalty, and the o sign reveals
weaker preference (utility) and intended loyalty.

6. Discussion
LPs have gained popularity since American Airlines launched its
frequent-ier program in 1981. Despite their importance, little is
known about how LPs inuence post-enrollment value perceptions. The key results presented extend the previous studies of
Dowling and Uncles (1997) as well as Yi and Jeon (2003). Our research reveals that the underlying effects of reward types on
preferences and intended store loyalty differ depending on the
level of consumers' personal involvement in the store. Table 13
summarizes the hypotheses and results.
Overall, we conrm H1a and b, which stipulate that the preference of an LP and, consequently, store loyalty intentions are
higher for tangible than intangible rewards. This contrasts the
results of Roehm et al. (2002) who show that intangible rewards
are preferred in all sectors. In support of H2a and b as well as Yi
and Jeon (2003), LP preference and store loyalty intentions increase for rewards that are compatible with the image of the store
offering the LP. They lead to high goal congruity and transaction
utility (Daryanto et al., 2010). Finally, we conrm H3a and b, which
stipulate that immediate rewards compared to delayed rewards
lead to higher preference and store loyalty intentions for (Yi and
Jeon, 2003).
Involvement clearly moderates the relationship between the LP
reward scheme and LP preferences (Laurent and Kapferer, 1985).
In high involvement conditions, in contrast with H4a and b
(which are rejected), which stipulate that the preference of an LP
and, consequently, store loyalty intentions are higher for intangible than tangible rewards, the results show superiority for
tangible rewards (e.g., cosmetics are preferred to beauty services
with the same monetary value). This contrasts the results of
Roehm et al. (2002) who show that intangible rewards are preferred in all sectors. In support of H5a and b as well as Yi and Jeon
(2003), LP preference and store loyalty intentions increase for rewards that are compatible with the image of the store offering the
program (e.g., beauty treatments in the perfume store). They lead
to high goal congruity and transaction utility (Daryanto et al.,
2010). Not only is the relationship between the loyal behavior and
program outcome consistent, but also it is clear that these customers are interested in the related products. In contrast, evidence
suggests that providing indirect rewards is a suboptimal reward
practice and may even be harmful to promoting loyalty (cf. Kim
et al., 2001). Finally, we conrm H6a and b, which stipulate that in
high personal involvement situation delayed and immediate rewards lead to similar preference and store loyalty intentions. But
immediate rewards lead to higher preference and store loyalty
intentions than delayed rewards, which have negative value, even
though the differences are not signicant. Our results are thus in
line with Yi and Jeon (2003).

In low personal involvement conditions, the results are in line

with Roehm et al. (2002) and validate H7a and b, because the
preference of the LP and store loyalty intentions are higher for
tangible than intangible rewards. In line with H8a and b, rewards
that are compatible with the store's image have a similar preference and trigger not more store loyalty intentions than incompatible rewards (so our results are in line with Yi and Jeon
(2003)). Finally, in line with Yi and Jeon (2003) and our H9a and b,
preference and store loyalty intentions are higher for immediate
than delayed rewards, which create acquisition utilities; the preference is derived from the LP rewards, and less from the intrinsic
characteristics of the product, brand or store itself.
To summarize, we nd that in both contexts, immediate rewards, compatible rewards, and tangible rewards have the strongest value (Yi and Jeon, 2003). Weaker compatibility, intangible,
and delayed rewards offer the lowest value (regardless of the
sample or sub-samples analyzed).
The effects of reward compatibility, tangibility and reward
timing on preferences are moderated by consumers' personal involvement. Under high personal involvement, compatibility has
the highest signicant effect on preferences of the LP; compatible
rewards are perceived to be more valuable than incompatible rewards and offer highest transaction utilities, which are preferred
by consumers on the long term (Verhoef, 2003). These transaction
utility benets have been shown to have enduring effects on longterm brand loyalty (Roehm et al., 2002). Under low personal involvement, timing of the reward has the highest signicant effect
on LP preferences; immediate rewards are perceived to be more
valuable than delayed rewards and create acquisition utilities.
Nevertheless, the delayed and intangible rewards have less negative effects in high than low involvement contexts. Therefore,
proposing delayed and intangible rewards in high personal involvement situations destroys less value. Rewards with weaker
compatibility with the image of the store offering the program
result in more negative effects in high than low involvement
contexts. Similarly, proposing weaker-compatibility rewards is less
value destructive in low than high involvement contexts. Sectors
that offer weaker-compatibility and immediate rewards enable
customers to acquire them rapidly. Though attractive to customers, they may create interference in attention to the brand's intrinsic characteristics, (that can weaken the intrinsic characteristics of the brand's capital) which might induce spurious and
short-term loyalty because customers do not necessarily search for
a stronger relationship with the company (Keh and Lee, 2006;
Phillips Melancon et al., 2010). Instead clients focus on acquiring
the reward rather than the purchase of the product or brand,
which becomes secondary. The probability of defection increases
when consumers attain this reward (Roehm et al., 2002).

L. Meyer-Waarden / Journal of Retailing and Consumer Services 24 (2015) 2232

7. Managerial implications
This study thus deepens our understanding of how value perception of the LP rewards affects store loyalty. Consumers' personal involvement inuences the relative importance of these routes
and has to be considered as an important factor in designing a LP.
This is benecial for brand managers to understand aspects how
loyalty schemes inuence customer value creation. For example,
the effectiveness of LP may be undermined when an incompatible
reward is granted in the high-involvement situation or when a
delayed reward is adopted in the low-involvement situation. Our
ndings can be used to design LP more effectively as they highlight
the need for differentiated management of rewards according to
the sectors and their associated involvement. Tangibility, compatibility, and reward timing are key variables that enable managers to enhance LP or store loyalty. Managers must determine
which rewards have the strongest inuence on the value of LP. The
concepts vary, depending on the business sector. A category inuences consumers' personal involvement, which in turn reinforces or weakens the links among LP rewards, preferences, and
loyalty (Kivetz et al., 2006).

8. Limitations and future research directions

From a methodological perspective, conjoint analysis suffers
from methodological problems that might weaken the results. For
instance, behavioral research shows that one of the main assumptions of conjoint analysis is IIA (independence of irrelevant
alternatives) does not stand up in some consumer behavior situations (Hausman and McFadden, 1984).
From a theoretical perspective, this study examines only a
limited amount of the inuence of LP on consumers' store loyalty
intentions. Further studies should consider the effects of rewards
on real purchase behavior. Other research could integrate attitudinal loyalty indicators. Studies that include customer characteristics (e.g., variety seeking, inertia, purchasing orientations) might
test how these variables moderate the link between LP utility and
brand loyalty. Finally, further research should include nancial
indicators, such as customer lifetime value (Hardie et al., 2005),
because LP success ultimately depends on nancial contributions.
Concerning the LPs' time dimension, future research could
build on these efforts by probing deeper into consumer evaluations of reward magnitude and timing. Specically, do consumers
simply assess magnitude based on perceived monetary value, or
do they adopt a more comprehensive evaluation that accounts for
other aspects of value (e.g., perceived sacrice, preferential treatment, relational benets)?
It might be fruitful to include some others customer characteristics. To complete the explanation about the timing of reward, beyond the level of involvement, it could be also relevant to
investigate the temporal orientation (Drze and Nunes, 2006).
Another avenue of research is to analyze the link between the
customer satisfaction and the LP (Demoulin and Zidda, 2008). Finally, as markets become saturated with LP (18 LP memberships
per U.S. household; Hlavinka and Sullivan, 2011) consumers might
react negatively and oppose different forms of resistance to them
(El Euch Maalej and Roux, 2012). It would be denitively worthwhile to investigate this topic.

Appendix. Design (hypothetical LP)

Classify the following 8 ctive LPs according to your preference
(with most desired being 1 and the least desired 8). Then,
express your intention to repurchase in the store because of each

31

of the 8 LP (from 0% to 100% no intention to absolutely sure).

8 scenarios for perfumery store (to calculate partial utilities)
LP 1: Immediate discount worth 4 for purchases of over 60.
LP 2: Discount worth 30 after 8 purchases of 60 (or 480 in
total).
LP 3: Immediate personalized beauty treatment worth 4 for
purchases of over 60.
LP 4: Beauty treatment worth 30 after 8 purchases of 60 (or
480 in total).
LP 5: Immediate reward of 1 movie DVD worth 4 for purchases of over 60.
LP 6: Free admission to Disneyland worth 30 after 8 purchases
of 60 (or 480 in total).
LP 7: Immediate 1-month Car Assistance insurance worth 4
for purchases of over 60.
LP 8: 1-year Car Assistance insurance worth 30 after 8 purchases of 60 (or 480 in total).
8 Scenarios for grocery retailing store (to calculate partial
utilities).
LP 1: Immediate discount worth 4 for purchases of over 60.
LP 2: Discount worth 30 after 8 purchases of 60 (or 480 in
total).
LP 3: Immediate priority check-out worth 4 rewarded for
purchases of over 60.
LP 4: Home delivery service worth 30 rewarded after 8 purchases of 60 (or 480 in total).
LP 5: Immediate movie DVD worth 4 for purchases of over
60.
LP 6: Free admission to Disneyland worth 30 after 8 purchases
of 60 (or 480 in total).
LP 7: Immediate 1-month Car Assistance insurance worth 4
for purchases of over 60.
LP 8: 1-year Car Assistance insurance worth 30 after 8 purchases of 60 (or 480 in total).
Now, classify the following 2 ctive LPs according to your
preference (with the most desired being 1 and the least desired
2). Then, express your intention to repurchase in the store because of each of the 2 LPs (from 0% to 100% no intention to
absolutely sure).
Holdout sample perfumery (test predictive validity; not used to
compute partial utilities)
LP 1: Immediate beauty service worth 4 for purchases of over
60.
LP 2: 2 books worth 30 after 8 purchases of 60 (or 480 in
total).
Holdout sample grocery retailer (test predictive validity: not
used to compute partial utilities)
LP 1: Immediate home delivery service worth 4 for purchases
of over 60.
LP 2: 2 books worth 30 after approximately 8 purchases of 60
(or 480 in total).

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