Implications of loyalty program membership and service experiences for customer retention and value

Companies that offer loyalty reward programs believe that their programs have a long-run positive effect on customer evaluations and behavior. However, if loyalty rewards programs increase relationship durations and usage levels, customers will be increasingly exposed to the complete spectrum of service experiences, including experiences that may cause customers to switch to another service provider. Using cross-sectional, time-series data from a worldwide financial services company that offers a loyalty reward program, this article investigates the conditions under which a loyalty rewards program will have a positive effect on customer evaluations, behavior, and repeat purchase intentions. The results show that members in the loyalty reward program overlook or discount negative evaluations of the company vis-à-vis competion. One possible reason could be that members of the loyalty rewards program perceive that they are getting better quality and service for their price or, in other words, “good value.” Ruth N. Bolton is Ruby K. Powell Professor of Marketing in the Michael F. Price College of Business at the University of Oklahoma. Her current research is concerned with high-technology services sold to business-to-business customers. Her most recent work in this area studies how organizations can grow the value of their customer base through customer service and support. She previously held positions at the University of Maryland, GTE Laboratories Incorporated, the University of Alberta, Carnegie-Mellon University, and the University of British Columbia. Her business experience involves a variety of consulting projects addressing services marketing, customer satisfaction, and quality management issues in the telecommunications and information services industries. Her earlier published research investigates how organizations' customer service and pricing strategies influence customer satisfaction and loyalty. She received her B.Comm. with honors from Queen's University at Kingston and her M.Sc. and Ph.D. from Carnegie-Mellon University. She currently serves on the editorial boards of theJournal of Retailing, theJournal of Marketing, Marketing Science, Marketing Letters, theJournal of Marketing Research, and theJournal of Service Research. She has published articles in these and other journals. P. K. Kannan is Safeway Fellow and Associate Professor of Marketing in the Smith School of Business at the University of Maryland. He received his Ph.D. from Purdue University. His research and teaching interests are in electronic commerce, and marketing research and modeling. His research on competitive market structures, consumers' loyalty, variety seeking, and reinforcement behaviors, and the effects of promotions on competition have appeared inMarketing Science, Management Science, Journal of Business Research, andInternational Journal of Research in Marketing. His current interests center on the marketing of information products such as market research, software, and data products using electronic channels such as the Internet covering issues of strategy, pricing, and product reliability. Articles focusing on these issues have appeared or are forthcoming inCommunications of the ACM, International Journal of Electronic Commerce, and theHandbook of Electronic Commerce. He is a member of the American Marketing Association, the Institute of Management Science, and the American Statistical Association. He has corporate experience with Tata Engineering and Ingersoll-Rand and has consulted for companies such as Frito-Lay, Pepsi Co, SAIC, and Fannie Mae. Prior to joining the University of Maryland, he was on the faculty of the University of Arizona, Tucson. Matthew D. Bramlett is a doctoral candidate in the Department of Sociology and a faculty research assistant in the Department of Marketing at the University of Maryland, College Park. His dissertation is an event history analysis of the effects of children on the stability of marriages and cohabitations. His current research focuses on high-technology services sold to business-to-business customers. His other research interests include the commodification of sports and the exploitation of the consumer in professional sports, and the fertility effects of family planning programs in developing countries over time. He is a member of the Population Association of America and a member of the Family, Sociology of Population, and Race, Gender, and Class sections of the American Sociological Association. His work on the exploitation of the consumer in the National Football League will be published as a chapter in the forthcoming bookConsumers, Commodification and Media Culture: Perspectives on the New Forms of Consumption, edited by Mark Gottdiener, University of New York at Buffalo.     

The Quest for Societal ROI in the Midst of the Perfect Storm: Can SCM Set the Standard for Twenty‐First Century Business Education?

The Academy's dual role is to discover and disseminate knowledge. For most of our tenure, we have focused on research's role in fulfilling this societal mandate. We continue that discussion here by calling for more “actionable” research—something that the supply chain discipline is particularly well positioned to do. We now extend the discussion to pedagogy. As the two epigraphs denote, society is looking for a return on its investment—even a reinvention of the university. Increased costs, poor student achievement, and disruptive technology create an environment perfect for disruption. Yet, if we do our job well, current and foreseeable technologies cannot provide the same kind of transformative education that can be cultivated through community‐engaged experiential learning. The good news: The supply chain discipline is perfectly positioned to set the standard for twenty‐first century business education.     

Producing New Spaces of Violence: Libya and the Changing Style of NATO Interventions after the Global Financial Crisis

This paper argues that the way NATO conducts its interventions has altered since the Global Financial Crisis. The pressures of the Global Financial Crisis have forced NATO to shift from the sustained peacekeeping operation in Afghanistan to what I refer to as the trans-scalar space of intervention in Libya. Trans-scalar spaces of intervention are spaces where violence is temporarily concentrated by a transnational military apparatus to eliminate a perceived threat as efficiently as possible. The threats targeted are contained within a particular national locale and are unable to manifest themselves transnationally; their capacity is therefore several orders of magnitude below the force projection abilities of the transnational military force seeking its destruction. I examine how NATO’s creation of these new types of spaces has impacted global security and undermined territorial-based forms of governance. Despite the ensuing chaos which enveloped Libya after NATO departed, with their low cost and speed at which they can be organized this style of intervention will likely be replicated in the future.     

The Influence of Sense of Community on the Perceived Value of Physical Activity: A Cross-Context Analysis

As the physical activity marketplace becomes increasingly diversified, strategies for recruiting and maintaining participants have become especially salient. Accordingly, the current study examined the use of a commonly reported outcome of fitness participation, sense of community (SOC), as an antecedent in generating both value and the perception of progress for participants. Three fitness contexts, CrossFit, traditional group fitness activities, and individual gym goers, were chosen based on varying levels of explicit commitment to community building. SOC was first measured in three contexts to explore differences among settings. After establishing differences between groups, multiple regression analysis was employed to understand the ways in which SOC affected dimensions of value. Results indicated that an explicit commitment to community building was positively associated with higher value of the fitness product and perceptions of individual progress. Strategy and benefits for encouraging the development of SOC in a fitness context are discussed.     

Can We Stay Ahead of the Obsolescence Curve? On Inflection Points,Proactive Preemption,and the Future of Supply Chain Management

Great companies—like great products and great nations—have always endured a four‐stage life cycle: emergence, growth, maturity, and decline. Faster clockspeeds—enabled by compressed technology cycles and accelerated by new knowledge‐sharing routines such as crowdsourcing—are shrinking life cycles. What does this mean? Entities of all kinds now find themselves in a constant race against obsolescence. We thus ask a vital question,”Can we (as a discipline) stay ahead of the obsolescence curve?” Technological and sociological inflection points promise to change the rules of engagement. For instance, 3D printing, Big Data, and drones promise to change management practice. Budget deficits, poor skill improvement, and MOOCs promise to change academe. We discuss adaptation challenges and proactive preemption as preludes to presenting various visions of the future of supply chain management.     

The SCM Knowledge Supply Chain: Integrating World Views to Advance the Discipline

Supply chain management is a discipline immersed in knowledge creation and dissemination concerning the integration of business processes across functions and among firms. Academics are the producers and distributors in this knowledge supply chain. The Council of Supply Chain Management Professionals (CSCMP) provides numerous opportunities to integrate functions and processes between academics and practitioners. The Journal of Business Logistics, the CSCMP Educators' Conference, the CSCMP Annual Global Conference, and CSCMP per se, provide the venue for linking academics to practice, bridging the gap between the two groups as part of the same universe of value creation. Being actively involved in all of these makes a researcher more complete, relevant, and rigorous.     

Common correlated effects estimation of heterogeneous dynamic panel quantile regression models

This paper proposes a quantile regression estimator for a heterogeneous panel model with lagged dependent variables and interactive effects. The paper adopts the Common Correlated Effects (CCE) approach proposed in the literature and demonstrates that the extension to the estimation of dynamic quantile regression models is feasible under similar conditions to the ones used in the literature. The new quantile regression estimator is shown to be consistent and its asymptotic distribution is derived. Monte Carlo studies are carried out to study the small sample behavior of the proposed approach. The evidence shows that the estimator can significantly improve on the performance of existing estimators as long as the time series dimension of the panel is large. We present an application to the evaluation of Time-of-Use pricing using a large randomized control trial.