The Effect of The Reward Program Scheme

As an important component of customer relationship management, reward programs have become an increasingly popular marketing tool for retaining customers and stimulating product or service usage. A well-designed loyalty program can attract customers.Managers could elicit customers repeat purchase behavior through a well-designed reinforcement program, but little is known about the factors that determine how such programs are evaluated by consumers. The 2(timing of reward: delayed and immediate) x 2(degree of involvement: high and low) x 2 (business longevity: long and short) between-subject factorial design are conducted with undergraduate and graduate students as the subjects. The results show that immediate reward, long business longevity and high involvement respectively make reward programs less risky and more valuable. Moreover, delayed rewards of loyalty program offered by newly established company are unfavorable to consumers who are low involvement. Finally, this study indeed can help marketing executive to comprehend consumers reactions toward the reward program with different program scheme.

Autorentext

Wann-Yih Wu is a distinguished professor at the Department of Business Administration, National Cheng Kung University, Tainan, Taiwan. Wan-Jou Weng is a student at the Department of Business Administration, National Cheng Kung University. My e-mail address is tobey7413@hotmail.com. If there is any problem, please contact with me.