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Master

Thesis

What drives enrolment in a coalition loyalty program?

A conjoint approach

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Preface

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Table of Contents

Executive summary .................................................................................................................. 1

Chapter 1: Introduction ...................................................................................................... 2

Chapter 2: Literature Review ............................................................................................ 9

Chapter 3: Hypotheses Development............................................................................... 26

Chapter 4 Methodology ................................................................................................... 33

Chapter 5: Research Analysis and Results .......................................................................... 41

Chapter 6: Discussion........................................................................................................ 52

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Chapter 7: Conclusion, Implications, Limitations and Future Research Directions .. 57

References ............................................................................................................................... 65

Appendices .............................................................................................................................. 70

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Executive summary

to identify and analyze the drivers

of coalition LP enrolment

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Chapter 1: Introduction

1.1 General Introduction

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1.2 Research Motivation

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1.3 Problem Statement and Subsequent Research Questions

What factors determine enrolment in a coalition LP ?

1.4 Contribution

1.4.1 Academic Contribution

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1.4.2 Practical Contribution

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1.5 Structure

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Chapter 2: Literature Review

2.1 Origin of Loyalty Programs

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2.2 LP Types

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2.3 Coalition LP Benefits for Customers

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2.4 Introduction to Enrolment Drivers

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2.4.1 Rewards: Economic Benefits and Non-Economic Benefits

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2.4.1.1 Evaluating Rewards

cash value

redemption choice

aspirational value

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2.4.2 Program Design

Number of program providers

Program convenience

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Program relevance

Participation effort

Program duration

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2.4.3 Idiosyncratic Factors

Purchase frequency

Number of memberships in other LPs

2.4.4 Inhibiting Factors

economic costs non-economic costs

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Economic costs/participation costs

Privacyissues

2.5 Excluded Factors

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2.6 Factors Crucial to Coalition LP Enrolment

aspirational value

redemption range

convenien ce of a program relevance

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number of retailers

combined-currency payment

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Chapter 3: Hypotheses Development

redemption choice aspirational value convenience of the

program relevance of the program combined-currency payment

3.1 Redemption Choice

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H1

3.2 Aspirational Value

H2

3.3 Convenience

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H3

3.4 Combined-Currency Payment

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H4

3.5 Relevance

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H5

3.6 Number of Participating Companies

H6

3.7 Attitude

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H7

3.8 Purchase Behaviour

H8

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Chapter 4 Methodology

4.1 Research Design

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4.2 Conjoint Analysis Process

Conjoint analysis procedure Current study

firststep

second step

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step 3

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step 4

Scenario 6

step 5

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step 6

4.3 Questionnaire Design

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4.4 Questionnaire distribution

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Chapter 5: Research Analysis and Results

5.1 Introduction

5.2 Sample Characteristics

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5.3 Conjoint Procedure

5.3.1 Detecting and Removing Outliers

5.3.2 Conjoint Analysis

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5.3.3 Accuracy of the Model

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Value Sig.

Pearson's R ,986 ,000

Kendall's tau ,786 ,003

Kendall's tau for Holdouts 1,000 .

Value Sig.




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5.3.4 Utilities Values and Average Importance Values

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Attribute Utility low level Utility high level Average OverallImportance Rank

-,112 ,112 11,843 5Redemption

-,585 ,585 33,262 1Aspirational

2-,329 ,329 18,575Convenience

-,175 ,175 12,301 4Combined-currency

,023 -,023 10,663 6Relevance

3-,172 ,172 13,355Retailers

2,472(Constant)

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5.4 LP Attitude Analysis

5.4.1 Reliability Analysis of LP Attitude and Purchase Behaviour

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5.4.2 Frequency Tables

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5.4.3 Overall Attitude

5.4.4 Overall Purchase Behaviour

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Chapter 6: Discussion

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Chapter 7: Conclusion, Implications, Limitations and Future Research Directions

7.1 Conclusion

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7.2 Academic Implications

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7.3 Practical Implications

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7.4 Limitations and Future Research Directions

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Reference

s

Technometrics

Psychological Bulletin

California

Management Review

Journal

of the Academy of Marketing Science

Journal of Marketing Research

Journal of the

Academy of Marketing Science

Questionnaire Design: How to Plan, Structure and Write Survey Material

for Effective Market Research

Journal of Business Research

Journal of

Consumer Marketing

Journal of

Marketing

Journal of Marketing

The

McKinsey Quarterly

Journal

of Relationship Marketing

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Journal of Marketing Science

California Management Review

Sloan

Management Review


Journal of Consumer Marketing

Maritz Loyalty Marketing

Journal of Consumer

Marketing

International Journal of Retail & Distribution

Management



Journal of Consumer Research

Interfaces

Econometric Methods


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Principles of Marketing


Journal of Database Marketing & Customer Strategy

Managemen

Discussion Paper

International Journal of Research in Marketing

Journal of Marketing

Journal of Mathematical Psychology

Marketing Research: An Applied Approach

Journal of Marketing Management

Journal of Retailing

European Journal of Marketing

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Journal of

Marketing Management

European Retail Digest

Journal of Retailing

Harvard Business

Review

Harvard Business

Revie

w

Marketing Intelligence &Planning

Sawtooth Software Inc. Research Paper Series

Journal of Interactive Marketing

Handbook of marketing decision

models

Harvard

Business Review

Harvard

Business Review

The

Marketing Review

Journal of Research in Marketing

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Marketing Science


British Food Journal

Manual to SPSS

Manual to SPSS

De Constructie van Profielensets voor het Schatten van Hoofdeffecten

en Interacties bij Con junct Meten

International Journal of Service Industry Management

Journal of Business Ethics

Journal of

Marketing Management

Journal of Service Research

Journal

of Marketing,

International Journal of Retail and Distribution Management

Journal of the Academy of Marketing Science

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Appendices

Appendix A Discussed variables

Economic /

Hard Non-Economic / Soft Benefits Program Design IdiosyncraticBenefits

Rew ards Psychological Sociological Program Individual

Membership in a LP

Economic Cost Non-economic

costs

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Appendix B: Profiles Card List

redemption aspi rational convenience combined relevance number of

Card ID choice level level currency level retailers

1 1 small high high no high small

2 2 small low low yes high large

3 3 small low low no low small

4 4 large low high yes low small

5 5 large high low no low large

6 6 large high low yes high small

7 7 large low high no high large

8 8 small high high yes low large

9(a) 9 large high high no high large

10(a) 10 large low low yes high small

a Holdout

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Appendix C: Questionnaire

Part 1

Scenario 1

limited

exciting desirable mo tivate

easy simple

multiple

no

3-6

small

Scenario 2

limited

dull undesirable does not motivate

difficult complicated

limited

is possible

3-6

large

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Scenario 3

limited


difficult complicatedlimited

no

6-9

small

Scenario 4

extended


easy simple

multiple

is possible

6-9

small

Scenario 5

extended



limited

no

6-9

large

Scenario 6extended



limited,

is

3-6

small

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Scenario 7

extended


easy simple

multiple

no

3-6

large

Scenario 8

limited


easy simple

multiple

is

6-9

large

Scenario 9

extended

exciting desirable

easy simple

multiple

no

3-6

large

Scenario 10

extendeddull undesirable does not motivate


limited

is

3-6

small

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Part 2

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Part 3

o

o

o

o

o

o

o

o

o

o

o

o

o

o

o

o

o

o

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Appendix D: Sample Characteristics

What is your gender

Cumulative

Frequency Percent Valid Percent Percent

Valid Male 102 43,2 43,2 43,2Female 134 56,8 56,8 100,0

Total 236 100,0 100,0

What is your age

Cumulative


Valid 18-25 153 64,8 64,8 64,8

26-34 51 21,6 21,6 86,4

35-49 16 6,8 6,8 93,2

50-59 9 3,8 3,8 97,0

60+ 7 3,0 3,0 100,0

Total 236 100,0 100,0

What is your montly income after taxes

Cumulati ve


Valid Below 999 134 56,8 56,8 56,8

1000-1999 55 23,3 23,3 80,1

2000-2999 28 11,9 11,9 91,9

3000 and more 19 8,1 8,1 100,0

Total 236 100,0 100,0

What is your nationality

Cumulative


Valid Dutch 159 67,4 67,4 67,4

German 45 19,1 19,1 86,4

American 4 1,7 1,7 88,1

British 3 1,3 1,3 89,4

Irish 4 1,7 1,7 91,1

Belgian 8 3,4 3,4 94,5

Other 13 5,5 5,5 100,0

Total 236 100,0 100,0

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In how many single retailer loyalty programs do you participate?

Cumulative


Valid None 64 27,1 27,1 27,1

1 75 31,8 31,8 58,9

2 46 19,5 19,5 78,4

3 23 9,7 9,7 88,1

More than 3 28 11,9 11,9 100,0

Total 236 100,0 100,0

In how many coalition loyalty programs do you participate?

Cumulative


Valid None 143 60,6 60,6 60,6

1 66 28,0 28,0 88,6

2 19 8,1 8,1 96,6

3 7 3,0 3,0 99,6

More than 3 1 ,4 ,4 100,0

Total 236 100,0 100,0

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Appendix E: Initial Conjoint Output

Utilities

Utility

Estimate Std. Error

redemption small -,108 ,119

large ,108 ,119

aspirational low -,571 ,119

high ,571 ,119

convenience low -,322 ,119

high ,322 ,119

com_cur no -,175 ,119

yes ,175 ,119

relevance low ,020 ,119

high -,020 ,119

retailers small -,165 ,119

large ,165 ,119

(Constant) 2,482 ,119

Importance Values

redemption 12,065

aspirational 32,861

convenience 18,349

com_cur 12,360

relevance 10,633

retailers 13,288

Averaged Importance Score

Correlations(a)

Value Sig.




a Correlations between observed and estimated preferences

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Appendix F: Final Conjoint Output 222 Respondents

Utilities

Utility

Estimate Std. Error

redemption small -,112 ,117

large ,112 ,117

aspirational low -,585 ,117

high ,585 ,117

convenience low -,329 ,117

high ,329 ,117

com_cur no -,175 ,117

yes ,175 ,117

relevance low ,023 ,117

high -,023 ,117

retailers small -,172 ,117

large ,172 ,117

(Constant) 2,472 ,117

Importance Values

redemption 11,843

aspirational 33,262

convenience 18,575

com_cur 12,301

relevance 10,663

retailers 13,355

Averaged Importance Score

Correlations(a)

Value Sig.




a Correlations between observed and estimated preferences

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Appendix G: Pearsons R Holdout Scenario 9 and 10

Correlations

Scenario 9

Scenario 9 Pearson Correlation 1 ,544(**)

Sig. (2-tailed) ,000

N 222 222

Pearson Correlation ,544(**) 1


N 222 222

** Correlation is significant at the 0.01 level (2-tailed).

Correlations

Scenario 10

Scenario 10 Pearson Correlation 1 ,417(**)


N 222 222

Pearson Correlation ,417(**) 1


N 222 222

** Correlation is significant at the 0.01 level (2-tailed).

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Appendix H: Table of Pearsons R for all 10 Profiles

Estimated score correlated observed score Pearsons R

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Appendix I: Reliability Analysis of LP Attitude

Single Retailer LP Attitude Items

Case Processing Summary Reliability Statistics

N %Cronbach's

Cases Valid 168 75,7Alpha Based

Excluded(a) 54 24,3 on

Cronbach's StandardizedTotal 222 100,0

Alpha Items N of

Itemsa Listwi se deletion based on all variables in the,723 ,735 5

procedure.

Coalition LP attitude Items

Case Processing Summary Reliability Statistics

N %Cronbach's

Cases Valid 91 41,0 Alpha Based

Excluded(a) 131 59,0 on

Cronbach's StandardizedTotal 222 100,0

Alpha Items N of Itemsa Listwi se deletion based on all variables in the

,771 ,776 5procedure.

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Appendix J: Frequency Tables Attitude and Purchase Behaviour

Attitude Single Retailer LP

Statistics

Please rate the Please rate the

Please rate the following following

following statements - If statements - I

statements - Please rate the a retailer does Please rate the am paying

Having a si ngl e following not have a following more attention

retai ler loyalty statements - I single retailer statements - A to special

card makes me enjoy loyalty single retailer offers because

feel like a participation in program, I miss loyalty program of the single

regular a single retailer important offers attractive retai ler loyalty

customer loyalty program benefits benefits card

N Val id 168 168 168 168 168

Missing 54 54 54 54 54

In how many single retailer loyalt y programs do you participate?

Cumulative


Valid None 54 24,3 24,3 24,3

1 74 33,3 33,3 57,7

2 46 20,7 20,7 78,4

3 21 9,5 9,5 87,8

More than 3 27 12,2 12,2 100,0

Total 222 100,0 100,0

Please rate the following statements - Having a single retailer loyalty card makes me feel like a regular

customer

Cumulative

Frequency Percent Vali d Percent Percent

Valid Totally disagree 6 2,7 3,6 3,6

Disagree 23 10,4 13,7 17,3

Neutral 43 19,4 25,6 42,9

Agree 90 40,5 53,6 96,4

Totally agree 6 2,7 3,6 100,0

Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

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Please rate the following statements - I enjoy participation in a single retailer loyalty program

Cumulative



Disagree 16 7,2 9,5 11,9

Neutral 67 30,2 39,9 51,8

Agree 75 33,8 44,6 96,4


Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

Please rate the following statements - If a retailer does not have a single retailer loyalty program, I miss

important

benefits

Cumulative



Disagree 74 33,3 44,0 60,1

Neutral 34 15,3 20,2 80,4

Agree 30 13,5 17,9 98,2


Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

Please rate the following statements - A single retailer loyalty program offers attractive benefits

Cumulative


Valid Totally disagree 2 ,9 1,2 1,2

Disagree 12 5,4 7,1 8,3

Neutral 42 18,9 25,0 33,3

Agree 101 45,5 60,1 93,5


Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

Please rate the following statements - I am paying more attention to special offers because of thesingleretailer loyalty card

Cumulative



Disagree 26 11,7 15,5 19,0

Neutral 24 10,8 14,3 33,3

Agree 87 39,2 51,8 85,1

Totally agree 25 11,3 14,9 100,0

Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

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Attitude Coalition LP

Statistics

Please rate

Please rate the followingthe following statements - If Please rate Please rate the

statements - a retailer does the following fol lowing

Having a Please rate the not participate statements - statements - I

In how many coalition following in coalition A coalition am paying

coalition loyalty card statements - I loyalty loyalty more attention

loyalty makes me enjoy program, I program to special

programs do feel like a participation in miss offers offers because

you regular a coalition important attractive of the coaliti on

participate? customer loyalty program benefits benefits card

N Val id 222 91 91 91 91 91

Missing 0 131 131 131 131 131

In how many coalition loyalty programs do you participate?

Cumulative


Valid None 131 59,0 59,0 59,0

1 65 29,3 29,3 88,3

2 19 8,6 8,6 96,8

3 6 2,7 2,7 99,5

More than 3 1 ,5 ,5 100,0

Total 222 100,0 100,0

Please rate the following statements - Having a coalition loyalty card makes me feel like a regular

customer

Cumulative



Disagree 21 9,5 23,1 25,3

Neutral 33 14,9 36,3 61,5

Agree 32 14,4 35,2 96,7


Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

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Please rate the following statements - I enjoy participation in a coalition loyalty program

Cumulative



Disagree 8 3,6 8,8 11,0

Neutral 37 16,7 40,7 51,6

Agree 42 18,9 46,2 97,8

Totally agree 2 ,9 2,2 100,0

Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

Please rate the following statements - If a retailer does not participate in coalition loyalty program, I miss

important

benefits

Cumulative



Disagree 35 15,8 38,5 48,4

Neutral 23 10,4 25,3 73,6

Agree 23 10,4 25,3 98,9

Totally agree 1 ,5 1,1 100,0

Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

Please rate the following statements - A coalition loyalty program offers attractive benefits

Cumulative



Disagree 4 1,8 4,4 5,5

Neutral 28 12,6 30,8 36,3

Agree 49 22,1 53,8 90,1


Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

Please rate the following statements - I am paying more attention to special offers because ofthecoalition card

Cumulative



Disagree 17 7,7 18,7 24,2

Neutral 29 13,1 31,9 56,0

Agree 34 15,3 37,4 93,4


Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

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Purchase Behaviour Single Retailer LP

Please answer the following two questions - Do you buy more often at the retailer of the program

inwhich you participate

Cumulative

Frequency Percent Valid Percent PercentValid A lot less 3 1,4 1,8 1,8

A little less 1 ,5 ,6 2,4

The same 69 31,1 41,1 43,5

A little more 76 34,2 45,2 88,7

A lot more 19 8,6 11,3 100,0

Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

Please answer the following two questions - Do you spend more at the retailer in whose program

youparticipate

Cumulative


Valid A lot less 2 ,9 1,2 1,2

A little less 4 1,8 2,4 3,6

The same 90 40,5 53,6 57,1

A little more 62 27,9 36,9 94,0

A lot more 10 4,5 6,0 100,0

Total 168 75,7 100,0

Missing 8888888 54 24,3

Total 222 100,0

Purchase Behaviour Coalition LP

Please answer the following two questions - Do you buy more often at the retailers of the

coalitionprogram of which you are a member

Cumulative



A little less 2 ,9 2,2 3,3

The same 54 24,3 59,3 62,6

A little more 30 13,5 33,0 95,6

A lot more 4 1,8 4,4 100,0

Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

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Please answer the following two questions - Do you spend more at the retailers of the coalition

programof which you are a member

Cumulative



A little less 3 1,4 3,3 4,4The same 60 27,0 65,9 70,3

A little more 24 10,8 26,4 96,7

A lot more 3 1,4 3,3 100,0

Total 91 41,0 100,0

Missing 8888888 131 59,0

Total 222 100,0

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Appendix K: Paired Samples T Test

Paired Samples T test Attitude

Paired Samples Statistics

Std. Error

Mean N Std. Deviation Mean

Pair 1 total_single_att 3,3452 84 ,62506 ,06820

total_coal_att 3,2286 84 ,65207 ,07115

Paired Samples T test Purchase behaviour

Paired Samples Statistics

Std. Error

Mean N Std. Deviation Mean

Pair 1 total_pur_single 3,5893 84 ,70352 ,07676

total_pur_coal 3,3155 84 ,61006 ,06656

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