PROGRAM COMPETITION AND THE EFFECTS OF LOYALTY PROGRAMS: EVIDENCE FROM CHINA

Jun Kang,Thomas G. Brashear,Bo Zhang,Qiao Li 글로벌지식마케팅경영학회 2014 Global Marketing Conference Vol.2014 No.7

Customer loyalty programs have been widely adopted for customer relationship management all over the world. The proliferation of loyalty programs causes program competition which weakens the effectiveness of loyalty programs at the end of customers. In general, existed research suggests that the increasing competition among rival programs in a single industry may cancel out the expected roles of loyalty programs (M?gi, 2003). For example, program competition is a substantial threat to customer lifetime value and share of wallet (Leenheer, van Heerde, Bijmolt, & Smidts, 2007; Meyer-Waarden, 2007). Liu and Yang (2009) find the sales impact of a single loyalty program diminishes as program competition increases. Their study also shows this negative effect is weaker in a highly expandable product category. Although previous studies have examined the suppressive effect of program competition on financial outcomes of loyalty programs, little research has explored its role on attitudinal customer loyalty formation process. This study aims to explore the differential roles of program competition on two formation processes of customer loyalty. It intends to contribute to the loyalty programs literature in two aspects. First, this study examines two routines of customer loyalty formation in the context of loyalty programs. That is, a company can leverage program offerings to build customer loyalty through increased customer satisfaction or strengthened customer identification with the company. Second, this study examines the moderating roles of program competition on those two loyalty-generating routines. Specifically, it finds customer identification is more important for building customer loyalty at the presence of program loyalty.

The Influences of Customer Equity Drivers on Customer Equity and Loyalty in the Sports Shoe Industry

Hao Zhang,Eunju Ko,Kyung Hoon Kim 한국마케팅과학회 2010 Journal of Global Fashion Marketing Vol.1 No.2

The concept of customer equity brings together customer value management, brand management, and relationship/ retention management. However, the model put forth by Rust, Lemon, and Zeithaml (2000) does not include a consideration of the concept of loyalty, as in Vogel, Evanschitzky, and Ramaseshan (2008). In contrast to customer equity, customer loyalty involves an intention to engage in future purchase behavior with the same firm or brand. Its drivers are complex and dynamic, usually changing over time. Although plenty of researchers have studied those factors, the present study follows that of Johnson, Herrmann, and Huber (2006) and Vogel et al. (2008), which suggest that customer equity drivers can also drive customer loyalty. Thus, the present paper sets out to support this conclusion in the sports shoes industry, and to discover the differences in the influence customer equity drivers have on customer loyalty in Korea and China. This is because the product choices of consumers and their preferences for a particular product or brand are generally influenced by complex social factors (Yau, 1994).From 450 respondents in the countries’ capitals who answered the study questionnaire, the Korean sample included 125 university students and 75 fashion industry employees from Seoul, while the Chinese sample included 150 university students and 59 fashion industry employees from Beijing. To test the hypotheses, we first employed structural equation modeling with the maximum likelihood estimation method using the model without moderator. Then, for testing the differences between the two groups, a multi-group analysis with AMOS 7.0 was used to assess the moderating variable effects on the structural model (Byrne, 2001). Our research extends the literature on the outcomes of the three drivers of customer equity: value equity, relationship equity, and brand equity. The survey data of the study were used to examine their effects on customer loyalty, and the effect of customer loyalty on customer equity. The study’s focus on a specific industry, sports shoes, also extends the customer equity research into a different area. Our findings show that the customer equity model can be only partly supported. Relationship equity and brand equity can drive customer equity in the sports shoes industry. Results also show that value equity, relationship equity, and brand equity positively influence customers’ loyalty toward sports shoes brands, whereas customer loyalty has a positive effect on customer equity in that industry. Thus, value equity, relationship equity, and brand equity are not only the drivers of customer equity, but can drive customer loyalty as well. In the sports shoe industry, firms should keep investing in marketing activities targeted toward increasing the perceived equity of value, relationships, and brand. However, different nationalities can show different relationships among the customer equity drivers, customer loyalty and customer equity. Our study, though subject to several limitations, can provide several managerial implications for sports shoe firms. First, findings from testing customer equity in the sports shoe market show that value equity, relationship equity, and brand equity are the drivers of customer loyalty, suggesting that a sports shoes firm must meet customer expectations, create better relationships with customers, and increase the equity of the brands. Second, when managers make decisions about how to enter a new market, or how to improve customer loyalty, cultural and market differences should be considered.

PROGRAM COMPETITION AND THE EFFECTS OF LOYALTY PROGRAMS: EVIDENCE FROM CHINA

Jun Kang,Thomas G. Brashear,Bo Zhang,Qiao Li 글로벌지식마케팅경영학회 2014 Global Marketing Conference Vol.2014 No.5

Customer loyalty programs have been widely adopted for customer relationship management all over the world. The proliferation of loyalty programs causes program competition which weakens the effectiveness of loyalty programs at the end of customers. In general, existed research suggests that the increasing competition among rival programs in a single industry may cancel out the expected roles of loyalty programs (Mägi, 2003). For example, program competition is a substantial threat to customer lifetime value and share of wallet (Leenheer, van Heerde, Bijmolt, & Smidts, 2007; Meyer-Waarden, 2007). Liu and Yang (2009) find the sales impact of a single loyalty program diminishes as program competition increases. Their study also shows this negative effect is weaker in a highly expandable product category. Although previous studies have examined the suppressive effect of program competition on financial outcomes of loyalty programs, little research has explored its role on attitudinal customer loyalty formation process. This study aims to explore the differential roles of program competition on two formation processes of customer loyalty. It intends to contribute to the loyalty programs literature in two aspects. First, this study examines two routines of customer loyalty formation in the context of loyalty programs. That is, a company can leverage program offerings to build customer loyalty through increased customer satisfaction or strengthened customer identification with the company. Second, this study examines the moderating roles of program competition on those two loyalty-generating routines. Specifically, it finds customer identification is more important for building customer loyalty at the presence of program loyalty.

상품가치, 서비스품질, 쇼핑몰이미지가고객만족 및 애호도에 미치는 영향

김상우,박명호 대한경영학회 2004 大韓經營學會誌 Vol.17 No.3

The purpose of this study is to investigate critical factors affecting customer satisfaction and customer loyalty on the internet shopping mall. Critical factors affecting customer satisfaction and customer loyalty of the internet shopping mall suggested in this study are product value, service quality and shopping mall image. As moderating factor of the relationship between customer satisfaction and customer loyalty, switching barrier is suggested. Data are collected from 716 Internet shoppers by internet panel survey. This study analyzes the research model and hypotheses using structural equation model(SEM) and regression. The results are as follows: (1) customer satisfaction has been affected by product value, service quality and shopping mall image, (2) customer loyalty has been affected by customer satisfaction, and (3) the effect of customer satisfaction on customer loyalty has not been moderated by switching barrier. This results confirmed that customer satisfaction is strong antecedent of customer loyalty. Also, perceived product value is more important factor to influence the customer satisfaction among suggested ones. Finally, this study suggests several implications for improving customer satisfaction and customer loyalty in the internet shopping mall. The purpose of this study is to investigate critical factors affecting customer satisfaction and customer loyalty on the internet shopping mall. Critical factors affecting customer satisfaction and customer loyalty of the internet shopping mall suggested in this study are product value, service quality and shopping mall image. As moderating factor of the relationship between customer satisfaction and customer loyalty, switching barrier is suggested. Data are collected from 716 Internet shoppers by internet panel survey. This study analyzes the research model and hypotheses using structural equation model(SEM) and regression. The results are as follows: (1) customer satisfaction has been affected by product value, service quality and shopping mall image, (2) customer loyalty has been affected by customer satisfaction, and (3) the effect of customer satisfaction on customer loyalty has not been moderated by switching barrier. This results confirmed that customer satisfaction is strong antecedent of customer loyalty. Also, perceived product value is more important factor to influence the customer satisfaction among suggested ones. Finally, this study suggests several implications for improving customer satisfaction and customer loyalty in the internet shopping mall.

Service Quality, Customer Satisfaction and Customer Loyalty of Mobile Communication Industry in China

Ruijin Zhang,Xiangyang Li,Yunchang Zhang 한국마케팅과학회 2010 마케팅과학연구 Vol.20 No.3

Previous studies have shown that the most important factor affecting customer loyalty of service industry is service quality. However, on the part whether service quality has a direct or indirect affect on customer loyalty, the scholars’ views vary apparently. Some studies suggest that service quality has a direct and fundamental influence on customer loyalty (Bai Changhong and Liu Zhi, 2002) ; but some studies have shown that service quality not only directly affects customer loyalty, but also indirectly impacts customer loyalty by influencing customer satisfaction and perceived value(Cronin et al., 2000) .Currently, there are less domestic articles specifically on the relationship between service quality and customer loyalty of mobile communication industry. Besides, literatures studied customer loyalty as a whole variable, not further breaking down into multiple dimensions. Based on this, this paper summarized previous study results, established an effect mechanism model among service quality, customer satisfaction and customer loyalty of mobile communication industry, and did a statistical test on model assumptions by using customer investigation data of Heilongjiang Mobile Company, which provides theoretical guidance for mobile service management based on the discussion of the hypothesis test results. For data collection, the sample was comprised of Harbin city, and the targets are mobile users. The survey is taken by random sampling. A total of 300 questionnaires were delivered, and 276 questionnaires were recovered, with a recovery rate of 92.9%. Excluding invalid questionnaires, 249 questionnaires were valid, which means the effective rate was 82.6%. This study adapted Cronbach's α coefficient to assess the scale reliability. This study conducted validity test on the questionnaire from three aspects: content validity, construct validity and convergent validity. This study tested goodness of fit mainly from the absolute and relative fit indexes. The hypotheses testing results of the study are shown . Overall, four assumptions have not been supported .The ultimate affective relationship of service quality, customer satisfaction and customer loyalty is demonstrated on figure 2. On the whole, the service quality of communication Industry not only has a direct positive significant affect on customer loyalty, but also has an indirect positive significant affect on customer loyalty by service quality; the affective mechanism and extent of customer loyalty are different which is affected by each dimension of service quality. This paper uses the questionnaires of existing literature from home and abroad, which have been tested in empirical research. All questions adapted seven points Liker-type. This article made reference to PZB SERVQUAL scale. Service quality is divided into five projects: tangibility, reliability, responsiveness, assurance and empathy, and questions are simplified into nineteen. The measurement of customer satisfaction mainly made reference to Fornell (1992) and Han Xiaoyun (2003) scale, and finally chose four questions. Based on the reference of Gronholdt (2000) and Wang Chunxiao (2004) scale, this paper chose three indicators such as price tolerance, first choice, and complaint reaction of to measure attitudinal loyalty, and chose three indicators such as repurchase intention, recommendation, and reputation to measure behavioral loyalty. Through collection and collation of literature data, this paper built a model of the relationship among service quality, customer satisfaction and customer loyalty of mobile communication, and took China Mobile in Harbin in Heilongjiang as conducting an empirical test on the model and obtaining some useful conclusions: First, service quality of mobile communication is formed by five factors: Tangibility, Reliability, Responsiveness, Assurance and Empathy.

태권도장 수련생의 관계마케팅이 고객충성도, 고객만족 및 소비자 행동에 미치는 영향

이상행(Lee, Sang-Heang),오방균(Oh, Bang-Gyun) 한국체육과학회 2012 한국체육과학회지 Vol.21 No.5

This study has its purpose to analyze the difference of a relationship marketing and a customer loyalty recognized by taekwondo trainees and to figure it out to the relation with a customer satisfaction and a consumer behavior in order to revitalize Taekwondo gyms which are in an increasingly competitive. To make this goal, the study selects it as its population to over 16 years-old trainees using Taekwondo gyms located in Gyounggi-do, Dajeon, Cheonan, Jeonju, and Daegu region. Then, the study extracts the samples with stratified sampling, classified the population by its characteristic, among probability sampling. The results are as follows: First, "Relationship marketing of Taekwondo gyms would make an influence on customer loyalty", the result shows that the factors of customer orientation, ties, physical facilities, price have a meaningful influence in the relation between relationship marketing and perceived loyalty, the factors of customer orientation, ties, and communication have a meaningful influence in the relation between relationship marketing and emotional loyalty, the factors of customer orientation, communication, and price have a meaningful influence in the relation between relationship marketing and positive loyalty, and the factors of ties, physical facilities, and customer orientation have a meaningful influence in the relation between relationship marketing and behavior loyalty. Second, "customer loyalty would make an influence on customer satisfaction", the result shows that factors of perceived loyalty, behavior loyalty, and emotional loyalty have a meaningful influence. Third, "customer loyalty would make an influence on consumer behavior", the result shows that the factors of perceived loyalty, behavior loyalty, and emotional loyalty make a meaningful influence on the relation between customer loyalty and repurchase, and also the factors of perceived loyalty and behavior loyalty make a meaningful influence on the relation between customer loyalty and WOM intentions. Fourth, "relationship marketing of Taekwondo gyms would make an influence on customer satisfaction", the result shows that the factors of ties and customer orientation have a meaningful influence. Finally, "relationship marketing of Taekwondo gyms would make an influence on consumer behavior", the result shows that all factors make a meaningful influence on the relation between relationship marketing and repurchase, and also the factors of ties, customer orientation, and physical facilities make a meaningful influence in the relation between relationship marketing and WOM intentions.

The Effects of Franchise Customers’ Acquisition Utility and Exchange Utility on Customer Loyalty and Customer Citizenship Behavior

Sang-Duck Kim,Hyang-Mi Im,Ki-Hong Seo,Ok-Sook Yoon,Jong-Hun Kim 한국유통과학회 2019 The Journal of Industrial Distribution & Business( Vol.10 No.2

Purpose - Customer loyalty and citizenship behavior are key success factors of franchise system. They make the management of franchisee more effective and efficient. Prior studies, however, mainly dealt with only acquisition utility of customer, such as perceived product/service quality and brand reputation to explain customer loyalty and citizenship behavior, which explains only on one side. We tried to investigate the effect of exchange utility of customer, such as relationship strength and psychological obligation together with the acquisition utility. In addition, we tried to investigate the relationship between customer loyalty and citizenship behavior in franchise context. Research design, data, and methodology - This study used data collected from the dining franchisee managers of 342 franchisors in South Korea. The franchisors consist of more than ten franchisees, the majority of which participated directly in the transaction with franchisor and have worked for more than six months. To test the hypotheses, the study used structural equation model analysis. Results - H1-1, 1-2, 1-3 predicted that acquisition utility would increase customer loyalty to franchisee. In support of H1-1, 1-2, 1-3, the results indicated that acquisition utilities such as perceived product value, perceived service value, and franchise brand reputation had positive effects on customer loyalty. H2-1, 2-2 predicted that exchange utility would increase customer loyalty to franchisee. In support of H2-2, the result indicated that psychological obligation had positive effects on customer loyalty like other acquisition utilities. However, H2-1 was not supported. Relationship strength had no significant effect on customer loyalty. H3 predicted that customer loyalty would increase customer citizenship behavior. In support of H3, the results indicated that customer loyalty had positive effect on customer citizenship behavior. Overall, the evidences generally supported the hypotheses. Conclusion - The results of the study show that not only acquisition utility but also exchange utility increases customer loyalty to franchisee and also show that customer loyalty increases customer citizenship behavior. Interestingly, however, relationship strength has no significant effect on customer loyalty. These results have two implications. The one is that increasing exchange utility can improve customer loyalty as acquisition utility can. The other one is that both of customer utilities can improve customer citizenship via customer loyalty.

Exploring Study on the Effect of Perceived Port Service Quality on Customer Satisfaction and Loyalty

장재곤,이홍걸,이철영 한국항해항만학회 2008 한국항해항만학회지 Vol.32 No.7

Due to the rapid changes in world trade and shipping environment, today's ports face ever-increasing competition, from adjacent competing ports. To this reason, port service quality has been recognized as an important strategy to take competitive advantage for those competition. In general, service quality has effect on customer loyalty, and customer loyalty is the resource to sustain competitive advantage which service providers or service producers. By improving customer loyalty, companies can get more benefits and added value. However, this causality of port service quality has not been clearly identified. Thus, various empirical studies in relation to port service quality are needed. The aim of this study is to analyze the effect of perceived port service quality on customer satisfaction and loyalty. To achieve this aim, we established 8 hypotheses based on SERVPERF in order to test correlations of 5 dimensions of port service, port service quality, customer satisfaction, and customer loyalty. From the result of the hypothesis testing, we found that customer satisfaction and port service quality do not affect customer loyalty in spite of high effect of port service on customer satisfaction. Due to the rapid changes in world trade and shipping environment, today's ports face ever-increasing competition, from adjacent competing ports. To this reason, port service quality has been recognized as an important strategy to take competitive advantage for those competition. In general, service quality has effect on customer loyalty, and customer loyalty is the resource to sustain competitive advantage which service providers or service producers. By improving customer loyalty, companies can get more benefits and added value. However, this causality of port service quality has not been clearly identified. Thus, various empirical studies in relation to port service quality are needed. The aim of this study is to analyze the effect of perceived port service quality on customer satisfaction and loyalty. To achieve this aim, we established 8 hypotheses based on SERVPERF in order to test correlations of 5 dimensions of port service, port service quality, customer satisfaction, and customer loyalty. From the result of the hypothesis testing, we found that customer satisfaction and port service quality do not affect customer loyalty in spite of high effect of port service on customer satisfaction.

EMOTION, COMPENSATION AND CUSTOMER ENGAGEMENT: EVIDENCE FROM LUXURY HOTELS IN CHINA

Doris Chenguang Wu,Namho Chung,Zhaohan Hua,Hee Chung Chung 글로벌지식마케팅경영학회 2018 Global Marketing Conference Vol.2018 No.07

Introduction Although hotel employees are trained to deliver the best service, service failures may happen at any time because service is delivered by people to people (Susskind, 2002). Moreover, customers are more impressed by failed services than good services (Titz, 2001). According to the recovery paradox, customers have higher satisfaction level after experiencing a service failure if they receive satisfactory service recovery or compensation (McCollough & Bharadwaj, 1992). With the development of information communication technology and mobile device, customers can receive personalized services in recent days (Migacz, Zou, & Petrick, 2018). They also can easily share their experience on the online review platforms such as TripAdvisor, as well as select hotels based on shared online reviews (Liu & Park, 2015; Nieto-Gara?a, Mu?oz-Gallego, & Gonz?lez-Benito, 2017). Therefore, it is important for hotel managers to understand the mechanisms for service failure and recovery strategy. Thus, this study aims to examine the relationship between different emotion, customer engagement and brand loyalty under the context from the luxury hotels in China that different service failure compensation strategies are adopted. Particularly, the following two research questions are aimed to be addressed: First, do emotions (anger, regret and helplessness) significantly affect hotel brand loyalty through customer engagement? Second, does compensation type (immediate vs. delayed) significantly affect customer engagement and hotel brand loyalty based on customers’ emotions? The results of this study will benefit industry practitioners for formulating effective service failure recovery strategies. Theoretical frameworks and hypotheses development Stimulus-Organism-Response framework Stimulus-Organism-Response (S-O-R) framework is a commonly used form of behavioral research in which events or occurrences are said to be the result of certain stimulus leading to a certain response, following a set of organism processes (Kim & Lennon, 2013; Mehrabian & Russell, 1974). In behavioral research, the S-O-R theory explains “how” something happens and a variance theory describes “why” (Chiles, 2003). We adopted the S-O-R framework in an attempt to explain the effect of the compensation types (immediate vs. delayed) on hotel brand loyalty. In our research model, customer engagement is used an intervening construct on the causal relationship between emotions of customer (anger and regret as a retrospective emotions, helplessness as a prospective emotion) (Gelbrich, 2010) and hotel brand loyalty. Customer engagement is composed of multidimensional concepts of identification, enthusiasm, attention, absorption, and interaction (So, King, & Spark, 2014). Our model thus explains four basic processes of relationship impact on service failure as “stimulus”, emotions and customer engagement as “organism”, and hotel brand loyalty as “response”. This study also emphasizes compensation type as “moderator”. The model shows how to enhance the understanding of emotions that affect hotel brand loyalty through customer engagement based on the moderating effect of compensations type. Customer engagement It is important for a firm to manage customers to improve a firm’s performance. Customer management has transformed from customer transactions, to relationship marketing, and then engaging customers (Pansari and Kumar 2017). There are different definition about customer engagement and most of them define customer engagement as the activity of the customer toward the firm. For example, Pansari and Kumar (2017) define customer engagement as how customer contributes to the firm by “the mechanics of a customer’s value addition to the firm, either through direct or/and indirect contribution.” Vivek et al. (2012) define customer engagement as “the intensity of an individual’s offerings or organizational activities, which either the customer or the organization initiates” (p.127). It has been discussed that customer engagement has been affected by customer emotion and also has significant impact on behaviour intention and brand loyalty. However it has not been discussed under service failure context and when different types of compensation strategies are employed. This study therefore aims to explore this mechanics. Under hospitality context, So, King and Sparks (2014) develop five factors to measure customer engagement: identification, enthusiasm, attention, absorption, and interaction. Since this study also examine hotel guest customers, we adopt the scale of So et al. (2014) due to its comprehensiveness and consistent context. Service failure and emotion Customer emotion is an important antecedent of customer engagement. Currently firms have been shifted their focus from selling products to emotional connection with their customers (Pansari and Kumar 2017). Positive emotion may enhance customer engagement and thereby improve customer loyalty. But when service failure occurs, customers have different negative emotions including anger, frustration, helplessness, regret amongst others. These negative emotions of customers disappoint customers themselves and reduce customer loyalty. Different emotions may have different impact on customer engagement. Anger often refers to the attributes of others such as the service providers (Weiner, 1985) whereas regret often refers to the service failure locus of customer himself/herself such as the customer is regret to choose this service provider (Roseman, 1991). Both anger and regret refer to retrospective emotions and when customer would like to solve questions they may also negative emotion of helplessness which is called prospective emotions (Davidow, 2003; Gelbrich, 2010). This study aims to examine and differentiate the impact of two retrospective emotions of anger and regret and one prospective emotions of helplessness. The first hypothesis is therefore proposed: H1: Anger has negative impact on customer engagement. H2: Regret has negative impact on customer engagement. H3: Helplessness has negative impact on customer engagement. Service failure compensation Though service providers aim to deliver zero fault service, it is inevitable service failure may occur that may bring customers anger and dissatisfaction and damage the customer loyalty thereby. It is found that compensation is an effective way to comfort and delight the dissatisfied customers. Therefore, it is important to formulate effective compensation strategy when service failure occurs. Different compensation strategies such as monetary or nonmonetary (Fu et al. 2015), immediate or delayed compensation (Boshoff, 1997; Davidow, 2003), may be suitable to different contexts/situations. According to prospect theory, a customer is risk-reverse in case of gains. A customer may value products available now more than products obtained in the future due to the higher certainty of the former. Similarly, immediate compensation has less uncertainty than delayed compensation, and therefore is supposed to have higher value. Therefore customers with anger are assumed to have higher customer engagement when immediately compensated. On the other hand, regret customers attribute failure to himself/herself and therefore less expect compensation. The immediate compensation may lead to unfair and thereby less effect than delayed compensation. Therefore immediate compensation may not always be superior over the delayed one under different contexts. We therefore propose the second hypothesis: H1a: Compensation type (immediate vs. delayed) moderates the relationship between anger and customer engagement. H2a: Compensation type (immediate vs. delayed) moderates the relationship between regret and customer engagement. H3a: Compensation type (immediate vs. delayed) moderates the relationship between helplessness and customer engagement. Brand loyalty Brand loyalty refers to the loyalty of a customer toward the brand both behaviourally and attitudinally (Dick and Basu 1994; Li and Petrick 2008; So, King, Sparks, and Wang 2013). It is a key goal of marketing activities, and its antecedents have been extensively examined such as satisfaction, perceived quality, received value, and brand trust, amongst others. Customer engagement, as the activity of a customer toward to a firm, is naturally viewed to influence brand loyalty. This study therefore adopts brand loyalty as the consequence of customer engagement. Furthermore, we would like to examine if compensation types have moderating effect between customer engagement and brand loyalty. We therefore propose below two hypotheses: H4: customer engagement has positive impact on brand loyalty. H4a: Compensation type (immediate vs. delayed) moderates the relationship between customer engagement and brand loyalty. The research model is shown in Figure 1 where all hypotheses are demonstrated. Our research model is developed based on the S-O-R framework in which emotions are antecedent of customer engagement, and customer engagement impacts hotel brand loyalty. This research model also shows the moderating effects of compensation types has on causal relationships between the aforementioned constructs. Methodology Scenario design Scenario based questionnaire is designed to obtain quantitative data for analysis. Based on the interview with hotel managers/operators, one service failure scenario and two compensation scenarios (immediate and delayed) are designed. In-depth interviews with a couple of hotel managers and guests were conducted to verify the realisation of the scenarios formulated. The questionnaire begins with a screening question: in the previous 12 months have you ever had experience staying in a four- or five-star hotel? The survey would only continue if the answer is “yes”. Then the participant is asked to write down the name of this hotel and read the below service failure scenario thereby. Service failure scenario: Imagine you have checked into this hotel again. During your stay in hotel, you send your coat for laundry. It is a nice coat and you bought it a year ago with the price of 1000RMB. However when you collect the cleaned coat, you notice that there is a damage on your coat which makes you cannot dress this coat anymore. You therefore call the service counter for complain. Immediate and delayed compensation scenarios were designed as follows: Immediate compensation scenario: after 15 minutes, the duty manager of the hotel went to our hotel and expressed his sincere apology. You showed him about the damage and informed him the original price of your coat. The manager offered you the cash compensation with the original price of your coat and you agree with this. After half an hour you received 1000RMB cash as the compensation. Delayed compensation scenario: after 15 minutes, the duty manager of the hotel went to your room and expressed his sincere apology. You showed him about the damage and informed him the original price of your coat. The manager said according to the hotel policy, they need to check how this happened and confirm the price of your coat first before making the compensation for you. After two weeks you left the hotel, you received 1000RMB compensation which is transferred into your bank account directly. Participant emotion is measured after the participants read the service failure scenario and before they read the compensation scenario. Each participant is randomly assigned to be involved in one compensation scenario only. Customer engagement and hotel brand loyalty are measured after the compensation happened. Variable measurement Customer engagement is measured using 25-item scale developed by So et al. (2014) in which five factors are involved: identification, enthusiasm, attention, absorption, and interaction. Particularly, identification is measured by four attributes: “When someone criticizes this brand, it feels like a personal insult”, “When I talk about this brand, I usually say we rather than they”. “This brand’s successes are my successes”. “When someone praises this brand, it feels like a personal compliment”. Enthusiasm is measured by five attributes: “I am heavily into this brand”. “I am passionate about this brand” “I am enthusiastic about this brand” “I feel excited about this brand” “I love this brand”. Attention is measured by five attributes: “I like to learn more about this brand” “I pay a lot of attention to anything about this brand” “Anything related to this brand grabs my attention” “I concentrate a lot on this brand” “I like learning more about this brand” . Absorption is measured by five attributes: “When I am interacting with the brand, I forget everything else around me” “Time flies when I am interacting with the brand” “When I am interacting with brand, I get carried away” “When interacting with the brand, it is difficult to detach myself” “In my interaction with the brand, I am immersed” “When interacting with the brand intensely, I feel happy”. Interaction is measure by five attributes: “In general, I like to get involved in brand community discussions” “I am someone who enjoys interacting with likeminded others in the brand community” “I am someone who likes actively participating in brand community discussions” “In general, I thoroughly enjoy exchanging ideas with other people in the brand community” “I often participate in activities of the brand community”. Three emotion of anger, regret and helplessness are included as the measurement of emotion. Particularly, according to Gelbrich (2010), three attributes are adopted to measure anger “I would feel angry with the hotel/hotel employees”, “I would feel mad with the hotel/hotel employees”, and “I would feel furious about the hotel/hotel employees”. Three statements are employed to measure regret (Tsiros & Mittal 2000): “I would feel sorry for choosing this hotel”, “I regretted choosing this hotel”, and “I should have chosen another hotel”. Four statements are used to measure helplessness (Gelbrich 2010): “I would feel helpless”, “I would feel lost”, “I would feel defenceless”, and “I would feel stranded.” Five statements are used to measure brand loyalty (So, King, Sparks, & Wang 2013): “I would say positive things about this brand to other people.” “I would recommend this brand to someone who seeks my advice.” “I would encourage friends and relatives to do business with this brand.” “I would consider this brand my first choice to buy services.” “I would do more business with this brand in the next few years.” A seven-point Likert scale ranging from 1 (=disagree strongly) to 7 (=agree strongly) is adopted for all measurement. Data collection and analysis method In-depth interview with managers from upscale hotels and customers will be used to finalize scenarios. Opinions of academic experts will be used to revise variable measurements and questionnaires. Convenience sampling method will be adopted to obtain about 400 respondents who has experience of staying at four- or five-stars hotels in China in the previous year. Regarding with data analysis, Partial least square structural equation modelling (PLS-SEM) is used to test the hypotheses proposed. Expected results The manipulation check has been conducted to verify the scenarios designed. The negative relationship between emotions and customer engagement are expected and compensation timing (delayed or immediate) may moderate this relationship. Most importantly, it is expected that this moderating effect varies when different emotions and customer engagement are examined. Contributions The theoretical contributions have three folders. Firstly, this study first considers compensation timing into the examination of relationship between different negative emotions and customer engagement, after service failure occurs. Secondly, this study adopts stimulus-organism-response theory to explore the mechanism how service failure could be well recovered by relationships of different negative emotions, effective compensation type, customer engagement, and brand loyalty. Thirdly, this study applies second order factor for the measurement of customer engagement and also divides negative emotions into retrospective and prospective ones to shed light on customer engagement in the context of service failure and compensation. The practical implication of this study will benefit industry practitioners for their formulation of compensation strategies. Especially as the development of big data, hotel industry is able to adopt different strategies for individuals to maximize customer experience. The findings of this study could propose different strategies for different situations/individuals thereby.

고객보상 프로그램이 고객 유지에 미치는 효과: 교육 서비스 산업을 중심으로

전호성 한국마케팅학회 2011 ASIA MARKETING JOURNAL Vol.13 No.3

This study probes the effect of loyalty program on the customer retention based on the real transaction data(n=2,892) acquired from education service industry. We try to figure out the outcomes of reward program through more than 1 year-long data gathered and analyzed according to quasi-experimental design(i.e., before and after design). We adopt this kinds of research scheme in regard that previous studies measured the effect of loyalty program by dividing the customers into two group(i.e., members vs. non-members) after the firms or stores had started the program. We believe that it might not avoid the self-selection bias. The research questions of this study could be explained such as: First, most research said that the loyalty programs could increase the customer loyalty and contribute to the sustainable growth of company. But there are little confirmation that this promotional tool could be justified in terms of financial perspective. Thus, we are interested in both the retention rate and financial outcomes caused by the introduction of loyalty programs. Second, reward programs target mainly current customer. Especially CRM(customer relationship management) said that it is more profitable for company to build positive relationship with current customer instead of pursuing new customer. And it claims that reward program is excellent means to achieve this goal. For this purpose, we check in this study whether there is a interaction effect between loyalty program and customer type in retaining customer. Third, it is said that dis-satisfied customers are more likely to leave the company than satisfied customers. While, Bolton, Kannan and Bramlett(2000) claimed that reward program could contribute to minimize the effect of negative service by building emotional link with customer, it is not empirically confirmed. This point of view explained that the loyalty programs might work as exit barrier to current customer. Thus, this study tries to identify whether there is a interaction effect between loyalty program and service experience in keeping customer. To achieve this purpose, this study adopt both Kaplan-Meier survival analysis and Cox proportional hazard model. The research outcomes show that the average retention period is 179 days before introducing loyalty program but it is increased to 227 days after reward is given to the customers. Since this difference is statistically significant, it could be said that H1 is supported. In addition, the contribution margin coming from increased transaction period is bigger than the cost for administering loyalty programs. To address other research questions, we probe the interaction effect between loyalty program and other factors(i.e., customer type and service experience) affecting it. The analysis of Cox proportional hazard model said that the current customer is more likely to engage in building relationship with company compared to new customer. In addition, retention rate of satisfied customer is significantly increased in relation to dis-satisfied customer. Interestingly, the transaction period of dis-satisfied customer is notably increased after introducing loyalty programs. Thus, it could be said that H2, H3, and H4 are also supported. In summary, we found that the loyalty programs have values as a promotional tool in forming positive relationship with customer and building exit barrier. 이번 연구는 실제 기업 자료를 기반으로 고객보상 프로그램이 고객 유지(retention)에 미치는 영향을 살펴보았다. 특히 고객보상 프로그램의 효과를 보다 명확히 확인하기 위해 유사실험설계(quasi-experimental design)를 사용하였다. 그리고 1년이 넘는 장기적인 시간 프레임 속에서 고객보상 프로그램의 도입 시점을 전후로 소비자 집단을 구분하고 이들 집단의 비교를 통해 고객보상 프로그램의 효과를 파악하였다. 이러한 연구 설계를 고려한 이유는 종적 자료를 사용한 선행 연구들이 고객보상 프로그램의 도입 시점 이후부터 가입 고객과 비가입 고객을 대상으로 프로그램의 효과를 측정하였기 때문에 자기선택오류(self-selection bias)의 가능성이 존재하였기 때문이다. 이번 연구는 고객보상 프로그램의 도입 시점을 전후로 두 집단을 비교하기 위해 자료를 특정 시점을 기준으로 절단(censoring)하였다. 생존분석(survival analysis)은 다른 분석기법에 비해 불완전한 자료가 포함되더라도 분석이 상대적으로 용이하므로 이번 연구의 분석방법으로 선택하였다. 분석 결과 고객보상 프로그램을 실시하기 전에는 소비자들의 거래기간이 평균 179일이었으나 고객보상 프로그램을 도입한 이후에는 227일로 약 50일 정도 더 늘어났다. 이러한 차이는 통계적으로 유의한 것으로 나타나 연구 가설을 지지하였다. 또한 콕스 비례위험모형을 사용하여 고객보상 프로그램과 영향 변수들의 상호작용효과를 확인한 결과 기존고객들은 고객보상 프로그램이 도입된 후 신규고객들에 비해 회사와의 거래기간이 유의하게 증가한 것으로 나타났으며 긍정적인 서비스(예: 30일 이내 입회)를 경험한 고객들도 회사와의 거래기간이 유의하게 증가하는 것으로 나타났다. 한편 부정적인 서비스(예: 30일 이후 입회)를 경험한 고객이라 하더라도 고객보상 프로그램을 도입한 이후에는 회사와의 거래기간이 증가하였다. 이번 연구에서 나타난 결과들을 정리하면 고객보상 프로그램은 고객과 긍정적인 관계를 형성하는데 기여할 뿐만 아니라 이탈 장벽까지 구축해 줌으로써 기업의 경쟁력을 강화시키는 수단으로서의 가치가 있다고 생각할 수 있다.