A loyalty program: a connection between personalized marketing and the points pressure mechanism

5. Danaher, P. J., Sajtos, L., & Danaher, T. S. (2016). Does the reward match the effort for loyalty program members? Journal of Retailing and Consumer Services, 32, 23-31.

6. Dorotic, M., Bijmolt, T. H. A., & Verhoef, P. C. (2012). Loyalty Programmes: Current Knowledge and Research Directions*: Loyalty Programmes: An Overview and Research Directions. International Journal of Management Reviews, 14(3), 217-237.

7. Dorotic, M., Verhoef, P. C., Fok, D., & Bijmolt, T. H. A. (2014). Reward redemption effects in a loyalty program when customers choose how much and when to redeem. International Journal of Research in Marketing, 31(4)

8. Eggert, A., Steinhoff, L., & Garnefeld, I. (2015). Managing the Bright and Dark Sides of Status Endowment in Hierarchical Loyalty Programs. Journal of Service Research, 18(2), 210-228.

9. Fathy, E., & Zidan, H. (2017). Do Loyalty Program in the Airline and Hotel Industries Affect Customer Satisfaction and Loyalty? International Journal of Heritage, Tourism and Hospitality, 11(3 (Special Issue)), 246-266.

10. Harkiolakis, N. (2017). Quantitative research methods: From theory to practice. CreateSpace

11. Kandampully, J., Zhang, T. (Christina), & Bilgihan, A. (2015). Customer loyalty: A review and future directions with a special focus on the hospitality industry. International Journal of Contemporary Hospitality Management, 27(3), 379-414.

12. Kopalle, P. K., Sun, Y., Neslin, S. A., Sun, B., & Swaminathan, V. (2012). The Joint Sales Impact of Frequency Reward and Customer Tier Components of Loyalty Programs. Marketing Science, 31(2), 216-235.

13. Laszlo, S., & Yit Sean, C. (2018). Boasting and aspiring, as status-reinforcing mechanisms in status-based loyalty programs. Boasting and Aspiring, as Status-Reinforcing Mechanisms in Status-Based Loyalty Programs, 35(9), 640-651.

14. Lemon, K. N., & Verhoef, P. C. (2016). Understanding Customer Experience Throughout the Customer Journey. Journal of Marketing, 80(6), 69-96.

15. Liu, Y., & Yang, R. (n.d.). Competing Loyalty Programs: Impact of Market Saturation, Market Share, and Category Expandability. 17.

16. McCall, M., & Voorhees, C. (2010). The Drivers of Loyalty Program Success: An Organizing Framework and Research Agenda. Cornell Hospitality Quarterly, 51(1), 35-52.

17. Melancon, J. P., Noble, S. M., & Noble, C. H. (2011). Managing rewards to enhance relational worth. Journal of the Academy of Marketing Science, 39(3), 341-362.

18. Mesнas, F. J., & Escribano, M. (2018). Projective Techniques. In Methods in Consumer Research, Volume 1 (pp. 79-102).



Appendix

Table 1 "Summary of studies devoted to three effect mechanisms"

Author, (year)	Mechanisms influencing customer behavior	Method	Variables	Results
Zhang & Breugelmans, (2012)	Personalized marketing, Points-pressure mechanism	Development of a joint model to determine the impact of FRP with threshold on individual households' purchase behavior, decisions about store visit, amount of spending.	Communication activities (e. g. number of newsletters per month); Trade promotion indicators (e.g. number of price discounts per week); Price discount; Reward point promotion; Store visit incidence.	Consumers are more responsive to delayed reward point promotions than to immediate price discounts of the same monetary value. The promotion efforts had a very minor direct influence on consumers shopping trip spending decisions, while the only significant effects being on their responsiveness to notifications about cumulative reward points. New members are more responsive to marketing activities than old ones.
Dorotic et al., (2014)	points-pressure mechanism and rewarded-behavior mechanism	Observation of loyalty program participants for 184 weeks.	Threshold level (low / high); Number of points; Number of purchases made; Amount for which the purchase was made; The period between the purchase	The lower the price for receiving a reward, the more often consumers make a purchase. It is important for customers to receive rewards for the purchase, despite the tight storage periods of their accumulated points.
Steinhoff & Palmatier, (2016)	rewarded-behavior mechanism and personalized marketing	Experiment: collected 4 loyalty program treatment groups and one control group without any loyalty program. For data collection they used Amazon's Mechanical Turk (MTurk).	Respondents' personal experience with loyalty programs; Customer value; Exclusivity in the program	For a group of people who are already members of the loyalty program, the effect of gratitude for exclusive reward from the company was insignificant. Bystander status was significantly positively affected by reward exclusivity. Based on this, we can conclude that personal exclusive rewards from the company help attract new customers
Danaher et al. (2016)	Points-pressure mechanism, rewarded-behavior mechanism	Secondary data analysis (data from 7000 catalog items for six LPs spread over three countries)	Market price Points price	If the points price exceeds the market price by at least 10%, more than half of the LP members become annoyed, many to the extent of wanting to quit the LP. To reduce consumer perceptions of inequity and retain customers, LP providers should have lower price inequity for high-priced items of a catalog, but price inequity is less of a concern when the item is inexpensive.
Pez et al., (2017)	Points-pressure mechanism, rewarded-behavior mechanism	Online survey; Experiment	points expiration deadline (long/short); points threshold needed to retain the benefits acquired (high/low); possibility of losing status (yes/no).	The fact that the points expire and that a certain level of expenditure have to be reached to retain them might generate negative pressure. The pressure has positive impact in case when the reward is valuable for the customer and efforts to obtain are comparable to the reward. Customer is likely to change the behavior in case of rewards dissatisfaction but not to leave a LP.
Bruneau et al. (2018)	Personalized marketing	in-depth interviews; online survey	Points redemption; Receptiveness to information;	Customers who refused any communication channel on the stage of enrollment is unlikely to participate in a LP. Companies have to be more focused on the customer engagement rather than on enrollment in order to built real relationships with customers.
Montoya & Flores, (2019)	Personalized marketing, points-pressure mechanism	Secondary data analysis (transactional data from a major retail company in Latin America)	characteristics and behaviors before, during, and after the promotional period (e. g. purchase rate, earnings rate, expiration rate)	Personal promotions attract consumers with less transaction activity and shorter tenure. Consumers using the promotion increased their preference for hedonic rewards compared to their previously observed behavior. This change in preference remains after the promotion ended. Overall, the promotion significantly increased the number of redemptions but generated a negative impact on subsequent customer behavior by decreasing purchase incidence and quantity.
Bombaij & Dekimpe, (2020)	Points-pressure mechanism, rewarded-behavior mechanism	Secondary data analysis (data from largest grocery retailers in 17 western European countries)	Retailer performance; Reward type; Reward timing	Basic LP designs are more preffered by a customer. When a company operates a more complex progressive-reward system and when they are part of a multivendor program customers are likely to be dissatisfied with a program and change their purchase behavior by reducing by reducing the number of purchases.

Questions sheet for survey

This survey is aimed to reveal customers attitude towards loyalty programs with points expiration policy. The survey consists of 4 sections. The collected data is only used for research purposes. It will take 5-10 minutes to answer all questions.

Thank you for the participation!

Section 1.

Questions about your experience of loyalty programs participation.

Choose loyalty programs in which you are participating?

Grocery stores (e. g. loyalty programs in Pyatorochka, Lenta, Perekrestok)

Cosmetics stores (e. g. Riv Gauche, Letoile, Gold Apple)

Clothing stores (e. g. Love Republic, H&M, Guess)

Restaurants (e. g. Market Place, Tokio-City)

Hardware stores (e. g. Leroy Merlin, Castorama, Ikea)

Entertainment centers (e. g. cinema)

Pharmacies

Beauty salons

Transport

Other (write your answer)

What type of loyalty program do you prefer? (you can select several)

Discount program. A discount program is structured as a system of discounts that are provided by a store or other institution to a customer. Usually acts "Here and now". For example, only members of the loyalty program can buy discounted products in Okey stores.

Points program. In this type of loyalty program members accumulate points (usually the number of points is equal to an established percentage of a purchase) and then redeem them.

Multi-level loyalty program. This loyalty program has several levels for customers. Each level has its own privileges. The higher it is, the more pleasant bonuses you receive. The level of the client is determined depending on their participation in the life of the brand and the amount of money spent. This type is often used by airlines.

Cashback. Cashback is a monetary refund of part of the purchase price to the card. Cashback is a new generation loyalty program, and the percentage of cashback may vary.

Charity. Part of the money you spend is regularly allocated to charity.

Rate, please, the degree of usability of each program on a scale from 1 to 5, where 1 - very inconvenient, 5 - very convenient, 6-did not participate, I find it difficult to answer.

Discount program. A discount program is structured as a system of discounts that are provided by a store or other institution to a customer. Usually acts "Here and now". For example, only members of the loyalty program can buy discounted products in Okey stores.

1	2	3	4	5	6

Points program. In this type of loyalty program members accumulate points (usually the number of points is equal to an established percentage of a purchase) and then redeem them.

1	2	3	4	5	6



Multi-level loyalty program. This loyalty program has several levels for customers. Each level has its own privileges. The higher it is, the more pleasant bonuses you receive. The level of the client is determined depending on their participation in the life of the brand and the amount of money spent. This type is often used by airlines

1	2	3	4	5	6

Cashback. Cashback is a monetary refund of part of the purchase price to the card. Cashback is a new generation loyalty program, and the percentage of cashback may vary.

1	2	3	4	5	6

Charity. Part of the money you spend is regularly allocated to charity.

1	2	3	4	5	6

Section 2.

Questions in this section are devoted to your experience of participation in points programs.

Have you ever received notifications that your points accumulated for participating in a loyalty program will soon be expired?

Yes

No

Difficult to answer

How often do you receive notifications about points expiration?

Daily

More than once a week, but not daily

More than once a month, but less than once a week

Less than once a month

Never

Through what channels do you receive information that yout points will be expired? (you can select several)

Email

Text message

Social networks

Notifications in the application

Other (write your answer)

Read the statements and rate them on a scale of agreement, where 1-completely disagree, and 5 - completely agree.

When I get a message that my points are about to burn out, I always make a purchase.

1	2	3	4	5

After receiving a message about points burning, I would like to make purchases, but only if there is money for it.

1	2	3	4	5

When I get a message that my points are about to expire, I only make a purchase if I need to buy a specific item from that store.

1	2	3	4	5

When I get a message that my points will soon be burned, I ignore it and don't make a purchase.



1	2	3	4	5

What are the most convenient ways to get information about the burning of accumulated points? Please select all convenient options.

Email

Text message

Social networks

Notifications in the application

Other (write your answer)

How long before your points are expired would it be more convenient for you to receive notifications? (you can select several options)

In 2-3 days

In a week

In 2-3 weeks

In a month

Other (write your answer)

Section 3.

In this section there are presented several situations, please, read them and answer the following questions for each situation.

Situation 1.

Elena visits coffee shop Z once in two weeks. The coffee shop has a loyalty program in the form of an app for your phone, which displays the accumulated points and the expiration date of points. Notifications about the status of points are not received. At the moment, she still has 100 points, which will expire in 5 days. 1 point is equal to 1 ruble, points can be used to pay 50% of the total cost of the order.

From your point of view, will Elena use the points?

Yes

No

Do you think that if coffee shop Z had reminded Elena that her points would be burned, Elena would have visited the coffee shop to use the points?

Yes

No

What do you think would be the most convenient way to get an alert in this situation?

Email

Text message

Social networks

Notifications in the application

Other (write your answer)

From your point of view, how much in advance should coffee shop Z send a reminder to Elena that her points will be burned, so that Elena has time to visit the coffee shop and use the points?

In a day before points expiration

In 2-3 days before points expiration

In a week before points expiration

In 2 weeks before points expiration

Situation 2.

Maria received an SMS notification about the burning of accumulated points (10 points is equal to 1 ruble) in grocery store N in 3 days. Maria usually goes to this store no more than once a week. How many points do you think will be enough to go to the store to redeem them, if she has already visited store N this week?

1000 points would be enough (100 rubles)

2000 points would be enough (200 rubles)

3000 points would be enough (300 rubles)

Maria wont visit store N because she has already visited it this week

Situation 3.

Mikhail is a member of the pharmacy Z loyalty program. Today, he received a notification that he has accumulated 800 points (1 point is equal to 1 ruble) and these points will expire within 10 days. You can use points to pay for a part of the purchase. Mikhail will spend the points, if he can pay for them…

Mikhail will spend the points, if it is possible to pay 30% of a purchase using accumulated points

Mikhail will spend the points, if it is possible to pay 50% of a purchase using accumulated points

Mikhail will spend the points, if it is possible to pay 100% of a purchase using accumulated points

Mikhail won't spend the points

Section 4

Enter, please, information about yourself.

Your gender.

Male

Female

How old are you?

18-25

26-30

31-35

36-40

41-45

46-50

51-60

61-65

66 and elder

Your education.

Incomplete general secondary education

General secondary education

Specialized secondary education

Incomplete higher education

Higher education

2 or more degrees of higher education

Scientific degree of the candidate/doctor of Sciences

Which of the following statements most accurately describes the financial situation of your family?

There is not enough money even for food purchases

The money is only enough to buy food

There is enough money to buy necessary food and clothing, but larger purchases have to be postponed

Buying most durable goods (refrigerator, TV) does not cause difficulties, but we cannot buy a car

We can afford to buy a car, but we can't buy an apartment

There is enough money to buy anything

How often do you buy goods with discounts?

Very often, I try to buy as many products as possible at a discount

Often, if I come across products that I would like to buy and it is at a discount, then I will definitely buy

Sometimes, if I come across products that I would like and it is at a discount, I may buy it

Never, I don't buy the discounted products

Your marital status.

Married

Civil marriage

Divorced

Single

Widower/Widow

Do you have children?

Yes

No

In what subject of Russia do you live? (write your answer)

Choose, please, the size of locality where do you live?

More than 1 million

500 thousand - 1 million

100 thousand - 500 thousand

50 thousand - 100 thousand

Less than 50 thousand

Difficult to answer

Thank you for the participation!

Variables

Variable	Type of variable
Variables about experience of using LP
Member of LP in grocery stores	Binary
Member of LP in cosmetics stores	Binary
Member of LP in retail	Binary
Member of LP in restaurants	Binary
Member of LP in hardware store	Binary
Member of LP in entertaining	Binary
Member of LP in pharmacy	Binary
Member of LP in beauty salons	Binary
Member of LP in transport	Binary
Number of memberships	Ordinal
Get notifications about threshold	Binary
Frequency of getting notifications	Ordinal
Get notifications by e-mail channel	Binary
Get notifications by sms channel	Binary
Get notifications by social network channel	Binary
Get notifications by app channel	Binary
Number of channels used	Ordinal
Convenience of discount system LP	Ordinal
Convenience of bonuses system LP	Ordinal
Convenience of tired system LP	Ordinal
Convenience Of cashback system LP	Ordinal
Convenience of charity system LP	Ordinal
Always buy with discount	Binary
Buy with discount if has money	Binary
Buy with_discount if need special item	Binary
Not buy with discount	Binary
Attitude towards discounts	Nominal
Preference in using LP
Prefer discount system of LP	Binary
Prefer bonuses system of LP	Binary
Prefer tiered system of LP	Binary
Prefer cashback system of LP	Binary
Prefer charity system of LP	Binary
Number of prefer types LP	Ordinal
Prefer notifications by e-mail channel	Binary
Prefer notifications by sms channel	Binary
Prefer notifications by social network channel	Binary
Prefer notifications by app channel	Binary
Prefer not get notifications	Binary
Number of prefer channels	Ordinal
Prefer to get notifications in 2-3 days before threshold	Binary
Prefer to get notifications in week before threshold	Binary
Prefer to get notifications in 2-3 weeks before threshold	Binary
Prefer to get notifications in 1 month before threshold	Binary
Number of prefer timeframes to get notifications	Ordinal
Situations
Situation 1. Intention to buy without notification	Binary
Situation 1. Intention to buy with notification	Binary
Situation 1. Preferred channel for getting notification	Nominal
Situation 1. Preferred timeframe for getting notification	Ordinal
Situation 2. Discount in rubles sufficient for Intention to buy	Nominal
Situation 3. Discount in percentages sufficient for Intention to buy	Nominal
Y Intention to buy	Binary
X1. Notification	Binary
X2. Channels	Nominal
X3. Timeframes	Ordinal
Respondents	Nominal
Social demographic characteristic of respondents
Gender	Binary
Age	Ordinal
Education	Nominal
Financial situation	Ordinal
Family status	Nominal
Have childrens	Binary
Region	Nominal
City size	Ordinal



Commands for Stata

tabulate Get_notifications_about_threshold Intention_to_buy, cell
tabulate Get_notifications_about_threshold Prefer_not_get_notifications, cell
tabulate Get_notifications_by_app_channel Prefer_notifications_by_app_channel, cell
tabulate Get_notifications_by_e-mail_channel Prefer_notifications_by_e-mail_channel, cell
tabulate Get_notifications_by_sms_channel Prefer_notifications_by_sms_channel, cell
tabulate Get_notifications_by_social_network_channel Prefer_notifications_by_social_network_channel, cell
tabulate Situation1_Intention_to_buy_with_notification Situation1_Preferred_channel_for_getting_notification, cell
tabulate Situation1_Intention_to_buy_with_notification Situation1_Preferred_timeframe_for_getting_notification, cell
tabulate Situation1_Intention_to_buy_with_notification Situation2_Discount_in_rubles_sufficient_for_Intention_to_buy, cell
tabulate Situation1_Intention_to_buy_with_notification Situation3_Discount_in_percentages_sufficient_for_Intention_to_buy, cell
clogit Y_Intention_to_buy X1_Notification, group (Respondent) or
clogit Y_Intention_to_buy X1_Notification X2_Channels X3_Timeframes, group (Respondent) or
cor Y_Intention_to_buy X1_Notification X2_Channels X3_Timeframes
logit Situation1_Intention_to_buy_with_notificationSituation1_Preferred_timeframe_for_getting_notification Situation1_Preferred_channel_for_getting_ notification, or
logit Situation1_Intention_to_buy_with_notificationSituation1_Preferred_timeframe_for_getting_notification Situation1_Preferred_channel_for_getting_notification Situation2_Discount_in_rubles_sufficient_for_Intention_to_buy Situation3_Discount_in_percentages_sufficient_for_Intention_to_buy Age Attitude_towards_discounts Education Family_status Financial situation City size , or

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