The role of relationship quality and loyalty programs in building customer loyalty
Journal of Business & Industrial Marketing
ISSN: 0885-8624
Article publication date: 23 March 2020
Issue publication date: 15 December 2020
Abstract
Purpose
Despite the abundance of B2B loyalty programs (LPs), the research on their interplay with relationship marketing is scarce. The purpose of this paper is to investigate a LP (a relational practice) on a transactional business market to test if and how a B2B LP affects relationship outcomes.
Design/methodology/approach
The study is based on dyadic research in a multi-theory framework. Data were collected from 200 small and medium enterprises that purchase office supplies from a company and merged with the company’s internal records.The formative-reflective measurement model is estimated using structural equation modeling – partial least squares (SEM-PLS).
Findings
Relationship quality (RQ) directly affects sales and customer share of wallet. The effect is strengthened by customer activity in a LP. RQ results directly in a longer tenure and willingness to recommend only for members of a LP.
Research limitations/implications
RQ is driven mainly by customer’s evaluation of prior experience with a supplier, while a LP is based on a forward-looking promise of a reward. The results of the study point to the level of customers’ activity in a LP as a boundary condition of the program’s efficacy.
Practical implications
RQ affects both attitudinal and behavioral outcomes but through distinct mechanisms. Once a supplier is a preferred one, LP membership strengthens the attitudinal outcome of a relationship. The effect of RQ on company performance is magnified by the level of customer activity in a LP but not by the membership status.
Originality/value
The theoretical framework integrates transaction costs, relational contract and relational exchange theories to investigate a LP on a transactional market. The study adds to the scant literature on LPs in business-to-business and provides evidence for similarities and differences in comparison to consumer research.
Keywords
Citation
Kwiatek, P., Morgan, Z. and Thanasi-Boçe, M. (2020), "The role of relationship quality and loyalty programs in building customer loyalty", Journal of Business & Industrial Marketing, Vol. 35 No. 11, pp. 1645-1657. https://doi.org/10.1108/JBIM-02-2019-0093
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited