This study, set in a credit card context, examines the impact of loyalty programs on share of wallet and explores the moderating role of attitudinal loyalty on this relationship. The authors are particularly interested in two characteristics of reward programs: their perceived attractiveness and perceived switching costs between loyalty programs. Their findings suggest that perceived switching costs are highly effective in driving share of wallet at low rather than high levels of attitudinal loyalty, and only when combined with an attractive reward program. The attractiveness of a reward program, on the other hand, has a positive impact on share of wallet regardless of the level of psychological attachment to the company. These findings are particularly important for service providers in markets characterized by undifferentiated product offerings and low perceived switching costs between service providers.
Baumann, Chris, Suzan Burton, and Greg Elliott (2005), “Determinants of Customer Loyalty and Share of Wallet in Retail Banking,” Journal of Financial Services Marketing, 9 (3), 231-49.
2.
Bendapudi, Neeli and Leonard L. Berry (1997), “Customer Receptivity to Relationship Marketing,” Journal of Retailing, 73 (1), 15-37.
3.
Bolton, Ruth N., P.K. Kannan, and Matthew D. Bramlett (2000), “Implications of Loyalty Program Membership and Service Experiences for Customer Retention and Value ,” Journal of the Academy of Marketing Science, 28 (1), 95-109.
4.
Burnham, Thomas A., Judy K. Frels, and Vijay Mahajan ( 2003), “Consumer Switching Costs: A Typology, Antecedents, and Consequences,” Journal of the Academy of Marketing Science, 31 (2), 109-26.
5.
Butcher, Ken, Beverley Sparks, and Frances O'Callaghan (2001), “Evaluative and Relational Influences on Service Loyalty,” International Journal of Service Industry Management, 12 (4), 310-27.
6.
de Ruyter, Ko and Martin Wetzels (1997), “On the Perceived Dynamics of Retail Service Quality,” Journal of Retailing and Consumer Services , 4 (2), 83-89.
7.
Dick, Alan S. and Kunal Basu (1994), “Customer Loyalty: Toward an Integrated Conceptual Framework,” Journal of the Academy of Marketing Science, 22 (2), 99-113.
8.
Dowling, Grahame R. and Mark Uncles (1997), “Do Customer Loyalty Programs Really Work ?” Sloan Management Review, 38 (4), 71-82.
9.
Gruen, Thomas W. (1994), “Exploring Consumer Behavior with Respect to Memberships,” Asia PacificAdvances in Consumer Research , 1, 265-72.
10.
Guiltinan, Joseph P. (1989), “A Classification of Switching Costs with Implications for Relationship Marketing” in AMA Winter Educators' Conference: Marketing Theory and Practice, T. L. Childers, Richard P. Bagozzi, and J. P. Peter, eds. Chicago : American Medical Association, 216-20.
11.
Jones, Michael A., David L. Mothersbaugh, and Sharon E. Beatty (2000), “Switching Barriers and Repurchase Intentions in Services,” Journal of Retailing , 76 (2), 259-74.
12.
Jones, Thomas O. and W. Earl Sasser, Jr. (1995). Why satisfied customers defect. Harvard Business Review, 73 (6), 88-100.
13.
Keiningham, Timothy, Tiffany Perkins-Munn, and Heather Evans (2003), “The Impact of Customer Satisfaction on Share of Wallet in a Business-to-Business Environment,” Journal of Service Research, 6 (1), 37-49.
14.
Kivetz, Ran (2005), “Promotion Reactance: The Role of Effort-Reward Congruity,” Journal of Consumer Research, 31 (4), 725-37.
15.
__________ and Itamar Simonson (2002), “Earning the Right to Indulge: Effort as a Determinant of Customer Preferences toward Frequency Program Rewards,” Journal of Marketing Research, 39 (May), 155-70.
16.
__________ and __________ (2003), “The Idiosyncratic Fit Heuristic: Effort Advantage as a Determinant of Consumer Response to Loyalty Programs ,” Journal of Marketing Research, 40 (4), 454-67. __________, Oleg Urminsky, and Yuhuang Zheng (2006), “The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention,”Journal of Marketing Research, 43 (1), 39-51.
17.
Kumar, V. and Denish Shah (2004), “Building and Sustaining Profitable Customer Loyalty for the 21st Century,” Journal of Retailing , 80 (4), 317-30.
18.
Lam, Shun Yin, Venkatesh Shankar, M. Krishna Erramilli, and Bvsan Murthy (2004), “Customer Value, Satisfaction, Loyalty, and Switching Costs: An Illustration from a Business-to-Business Service Context ,” Journal of the Academy of Marketing Science, 32 (3), 293-311.
19.
Lee, Jonathan, Janghyuk Lee, and Lawrence Feick (2001), “The Impact of Switching Costs on the Customer Satisfaction-Loyalty Link: Mobile phone service in France,” Journal of Services Marketing,15 (1), 35-48.
20.
Lichtenstein, Donald R., Scot Burton, and Eric J. Karson (1991), “ The Effect of Semantic Cues on Consumer Perceptions of Reference Price Ads ,” Journal of Consumer Research, 18 (December), 380-91.
21.
Liddy, A. (2000), “Relationship Marketing, Loyalty Programs and the Measurement of Loyalty,” Journal of Targeting Measurement Analysis for Marketing, 8 (4), 351-62.
22.
Lovelock, Christopher and Jochen Wirtz ( 2007), Services Marketing: People, Technology, Strategy, 6th ed. Upper Saddle River, NJ: Prentice Hall.
23.
Magi, Anne (2003), “Share of Wallet in Retailing: The Effects of Customer Satisfaction, Loyalty Cards and Shopper Characteristics,” Journal of Retailing, 79 (2), 97-106.
24.
Noordhoff, Corine, Pieter Pauwels, and Gaby Odekerken-Schröder (2004), “The Effect of Customer Card Programs: A Comparative Study in Singapore and the Netherlands,” International Journal of Service Industry Management, 15 (4), 351-64.
25.
Oliver, Richard L. (1999), “Whence Customer Loyalty,” Journal of Marketing, 63 (Special Issue), 33-44.
26.
O'Malley, Lisa (1998), “Can Loyalty Schemes Really Build Loyalty? ” Marketing Intelligence and Planning, 16 (1), 47-55.
27.
Patterson, Paul G. and Tasman Smith ( 2001), “Relationship Benefits in Service Industries: A Replication in a Southeast Asian Context,” Journal of Services Marketing, 15 (6), 425-43.
28.
Perkins-Munn, Tiffany, Lerzan Aksoy, Timothy Keiningham, and Demitry Estrin (2005), “Actual Purchase as Proxy for Share of Wallet ,” Journal of Service Research, 7 (3), 245-57.
29.
Reicheld, Frederick (2003), “The One Number You Need to Grow,” Harvard Business Review, 81 (12), 46-54.
30.
Reinartz, Werner J. and V. Kumar (2000), “On the Profitability of Long-life Customers in a Noncontractual Setting: An Empirical Investigation and Implications for Marketing,” Journal of Marketing, 64 (October), 17-35.
31.
__________ and __________ (2002), “The Mismanagement of Customer Loyalty,”Harvard Business Review, 80 (7), 86-94.
32.
Shugan, Steven (2005), “Brand Loyalty Programs: Are They Shams ?” Marketing Science, 24 (2), 185-94.
33.
Too, Leanne H. Y., Anne L. Souchon, and Peter C. Thirkell (2001), “Relationship Marketing and Customer Loyalty in a Retail Setting: A Dyadic Exploration,” Journal of Marketing Management, 17 (3/4), 287-319.
34.
Wirtz, Jochen and Anna Mattila (2003), “The Effects of Customer Expertise on Evoked Set Size and Service Loyalty,” Journal of Services Marketing , 17 (7), 649-65.
35.
Wright, Claire and Leigh Sparks (1999), “Loyalty Saturation in Retailing: Exploring the End of Retail Loyalty Cards?” International Journal of Retail and Distribution Management, 27 (10), 429-39.
36.
Yi, Youjae and Hoseong Jeon ( 2003), “Effects of Loyalty Programs on Value Perception, Program Loyalty, and Brand Loyalty,” Journal of the Academy of Marketing Science, 31 (3), 229-40.
