Prof. Tammo Bijmolt and his colleagues Jorna Leenheer, Harald van Heerde and Ale Smidts have won the 2017 Jan-Benedict E.M. Steenkamp Award for Long-Term Impact. Their paper Do loyalty programs really enhance behavioral loyalty? An empirical analysis accounting for self-selecting members has been selected by the European Marketing Academy (EMAC) and the International Journal of Research in Marketing (IJRM) in recognition of the exceptional contribution it makes to academic marketing research by demonstrating long-term impact. Ten years ago, Bijmolt c.s.
won the 2007 IJRM Best Paper Award
with this publication.
For many years, one of the pressing issues in marketing has been whether loyalty programs really enhance behavioral loyalty. Loyalty program members may have a much higher share-of-wallet at the firm with the loyalty program than non-members have, but this does not necessarily imply that loyalty programs are effective. Loyal customers select themselves to become members in order to benefit from the program.
Leenheer, Van Heerde, Bijmolt and Smits estimated econometric models for both the membership decision and for the effect of membership on share-of-wallet. They used panel data from a representative sample of Dutch households who report their loyalty program memberships for all loyalty programs in grocery retailing as well as their expenditures at each of the 20 major supermarket chains. They found a small positive yet significant effect of loyalty program membership on share-of-wallet. This effect is seven times smaller than is suggested by a naïve model that ignores the self-selection characteristic of program membership. The results showed that creating loyalty program membership is a crucial step to enhance share-of-wallet.
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