Loyalty program benefits and their effect on relationship quality and loyalty to the retailer

Abstract

Loyalty Programs (LPs) aim to increase profit by rewarding, with various benefits, customers who patronize the retailer. This study investigated the benefits LPs provide in the South African Fast-moving consumer goods (FMCG) marketplace and how these influence relationship quality and loyalty between retailer and customer. How the perceived benefits of LPs contribute to relationship quality (satisfaction, trust and commitment), and how they lead to loyalty are examined. To illustrate these relationships, a model showing three independent (perceived benefits, namely altruistic, consumeristic, and egoistic) and three dependent variables (relationship quality, namely trust, satisfaction, and commitment), plus customer loyalty, was developed. A quantitative survey was administered electronically over 11 days to a randomly selected sample of 5000 consumers per day from a commercial database, resulting in 1944 responses. After the deletion of incomplete or inappropriate responses, 479 usable replies remained. Since this sample was self-selected, it should be considered a convenience sample. Structural equation modelling (SEM) with confirmatory factor analysis (CFA) was applied to test the hypotheses and develop the model. SEM indicated that respondents consider egoistic and consumeristic benefits as the same. Furthermore, trust and satisfaction manifest as a single construct. Both consumeristic and altruistic benefits had a significant positive relationship with this unified construct of trust/satisfaction, and the relationship between altruistic benefits and commitment was also positive and significant. Finally, although neither altruistic nor consumeristic benefits appeared to contribute directly to loyalty, a positive relationship existed between the new construct of trust/satisfaction and those of commitment and loyalty. The pathway to loyalty is indirect, and to reach this sought-after goal, relationship quality constructs must first be achieved.

Keywords: {'name': 'consumeristic'}, {'name': 'altruistic'}, {'name': 'egoistic'}, {'name': 'satisfaction'}, {'name': 'commitment'}, {'name': 'trust'}, {'name': 'Customer Loyalty Programmes'}

Authors & affiliations

Karen M. Corbishley
Affiliation not supplied

Corné Meintjes
Affiliation not supplied

Roger B. Mason
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.5267/j.uscm.2020.2.003

DOI: 10.1080/10495142.2015.1015377

DOI: 10.1108/03090560910946945

DOI: 10.1007/s11747-009-0163-z

DOI: 10.1108/03090561211260004

DOI: 10.1007/s11628-013-0213-y

Bloemer, J., & Oderkerken-Schröder, G. (2002). Store satisfaction and store loyalty explained by customer and store-related factors. Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behaviour, 15, 68-80. https://hdl.handle.net/2066/142940

DOI: 10.1016/j.jretconser.2007.08.004

DOI: 10.1016/j.indmarman.2018.10.005

DOI: 10.1108/03090560710752429

DOI: 10.24052/JBRMR/V11IS04/RLPRBTCATRISAAES

DOI: 10.4018/IJCRMM.2020010101

DOI: 10.1037/0021-9010.78.1.98

Cromhout, A., Reid, L., & Netto, R. (2016). The Current State of Loyalty in South Africa. The 2016 Truth Loyalty Whitepaper. Available: https://truth.co.za/articles/whitepapers/ (Accessed 29 March 2017).

DOI: 10.1007/s10869-009-9127-z

DOI: 10.1111/j.1468-2370.2011.00314.x

DOI: 10.1016/j.jretconser.2015.04.001

Egan, J. (2011). Relationship Marketing. Exploring relational strategies in marketing. 4th Edition. Gosport: Pearson.

DOI: 10.1016/j.jbusres.2016.06.010

DOI: 10.1007/s11747-011-0272-3

DOI: 10.1016/j.jesp.2012.05.014

DOI: 10.1057/bm.2014.16

DOI: 10.1016/j.jretconser.2010.10.003

DOI: 10.1080/09593969.2012.711254

DOI: 10.1016/j.jcps.2011.02.007

Hox, J.J., & Bechger, T.M. (1998). An Introduction to Structural Equation Modeling. Family Science Review, 11, 354-373. Available: http://joophox.net/publist/semfamre.pdf (Accessed 27 November 2022).

DOI: 10.1037/0022-006X.62.3.429

DOI: 10.4135/9781412950589

Hsu, C-L., Liu, C-C., & Lee, Y-D. (2010). Effect of commitment and trust towards micro-blogs on consumer behavioral intention: A relationship marketing perspective. International Journal of Electronic Business Management, 8(4), 292-303. Available: https://www.proquest.com/scholarly-journals/effect-commitment-trust-towards-micro-blogs-on/docview/846937723/se-2 (Accessed 20 February 2023).

DOI: 10.1080/0267257X.2018.1520281

DOI: 10.20525/ijrbs.v9i1.603

DOI: 10.1080/15332667.2013.794100

DOI: 10.1108/IJCHM-03-2013-0141

DOI: 10.1016/j.jretconser.2014.04.006

DOI: 10.1504/IJMFA.2021.117770

DOI: 10.1108/JABS-05-2022-0170

DOI: 10.1108/JBIM-02-2019-0093

DOI: 10.1080/10548408.2020.1711848

DOI: 10.20525/ijrbs.v11i3.1678

DOI: 10.1016/j.ijinfomgt.2010.05.008

DOI: 10.1016/S0022-4359(03)00008-3

DOI: 10.19030/jber.v8i8.753

DOI: 10.1007/s11747-010-0206-5

DOI: 10.1108/03090560810840925

DOI: 10.1016/j.jbusres.2009.01.008

DOI: 10.1177/002224299405800302

DOI: 10.20525/ijrbs.v10i6.1325

Moss, S. (2016). Fit Indices for Structural Equation Modelling. SICO TESTS. Available: https://www.sicotests.com/newpsyarticle/Fit-indices-for-structural-equation-modeling (Accessed 28 August 2013)

DOI: 10.20525/ijrbs.v10i6.1362

DOI: 10.1108/03090560710773390

DOI: 10.1111/j.0000-0000.2011.01030.x

DOI: 10.1108/13683041311311356

DOI: 10.1108/17506141111142825

DOI: 10.1509/jmkg.70.4.136

DOI: 10.1016/j.jretconser.2011.11.004

DOI: 10.1016/j.jretconser.2016.05.001

DOI: 10.6007/IJAREMS/v10-i1/9655

DOI: 10.1016/j.jbusres.2005.11.006

DOI: 10.4102/sajbm.v50i1.212

Sekaran, U., & Bougie, R. (2013). Research methods for business. A skills building approach. 6th Edition. Chichester: Wiley.

DOI: 10.1016/j.jretconser.2014.08.010

DOI: 10.1016/j.jbusres.2016.04.177

DOI: 10.1108/09564230510601387

DOI: 10.19030/jabr.v32i1.9538

Van Vuuren, T., Roberts-Lombard, M., & van Tonder, E. (2012). Customer satisfaction, trust and commitment as predictors of customer loyalty within an optometric practice environment. Southern African Business Review, 16(3), 81-96. https://hdl.handle.net/10520/EJC129104

DOI: 10.1016/j.jretconser.2009.05.002

DOI: 10.1108/09604521011041952

DOI: 10.1108/03090561011062871

DOI: 10.1007/s11628-013-0226-6

Wel, C.A.A., Nor, S.M.M., & Ahmad, A.H. (2011). Exploring relationship drivers' toward loyalty card programs. African Journal of Business Management, 5(15), 6429-6433. https://doi.org/10.5897/AJBM11.312

DOI: 10.1509/jmkg.73.4.109

DOI: 10.1080/21639159.2012.720752

DOI: 10.1108/09590550210415248

DOI: 10.1016/j.jbusres.2015.04.001

DOI: 10.3758/s13428-018-1055-2