Are loyalty program members really engaged? Measuring customer engagement with loyalty programs
Résumé
In a quest to engage customers in long-lasting relationships, many firms rely on loyalty programs (LPs). They do fairly well in acquiring new members of LPs, but firms often fail to engage them in the long term. This article seeks to understand what engagement in LPs is, how to measure it, and how it relates to company engagement. With four studies, the authors conceptualize LP engagement as six behavioral manifestations: proactively using cards, redeeming points, adapting purchase behavior, being receptive to information, sharing information, and searching for information. The 20-item scale proposed to measure these behaviors provides a viable, novel tool for determining customers' LP engagement. Whereas previous research on LPs mainly considers card usage or point redemption behaviors as proxies for customers' LP engagement, the current research shows that these behaviors are insufficient indicators of the actual level of engagement in LPs.