Based on research by JR Slubowski, DBA, Laura Munoz, PhD, and Michael Stodnick, PhD
Companies remain focused on how loyalty programs, or other formal marketing programs, can be use to create stronger and deeper relationships. As an alternative to customer satisfaction, customer- company identification (CCI) has garnered a great deal of attention from everyone looking for a different construct that can more consistently and strongly predict customer loyalty. Thus, we tested whether cognitive CCI (how a customer thinks about a company) and affective CCI (how they feel about it) play an impact of positive word of mouth (WOM). Furthermore, we tested whether perceived financial benefits and perceived feelings of status in a loyalty program impact both types of CCI.
Loyalty programs that can create feelings of status in their members fare better at driving deeper loyalty connections. Financial benefits and rewards can also be used to create deeper loyalty connections, but companies will need to work much harder to do so as effect sizes are weak.
To get customers to engage in positive WOM, companies need to nurture mainly how customers feel about the company, thus creating an affective CCI connection. (also known as calculative commitment).
Key Points
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Customer loyalty and its benefits, such as positive word-of-mouth, remains as a focal point for firms and organizations.
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To connect with customers, firms are looking to drive a deeper relationship with them while using loyalty program mechanics.
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A solution for this connection relies on connecting via what is called affective customer company identification (CCI). This means that how a customer feels about their relationship leads to that customer making their affiliation with the company part of who they are. Affective CCI focuses more on self-enhancement and the positive feelings that come along with such a relationship with a company.
Why This Matters
Loyalty marketers and loyalty practitioners often compete for finite resources to improve and enhance their loyalty programs while at the same time being called upon to ensure that they’re driving deeper, more meaningful connections with customers. Because of the prevalence of rewards in loyalty marketing models, that is typically where these practitioners focus their resources. This study shows that by focusing on loyalty marketing strategies that create a sense of status instead of the financial rewards in the program, loyalty marketers will be better positioned to create the deeper connections they need along with all of the positive firm outcomes those connections will yield. Further, for those loyalty practitioners looking to generate positive word of mouth, this study shows that loyalty program levers can also be used to do drive an affective-based identification in members.
Want to know more?
- Review the proceedings of the Society for Marketing Advances
- Learn about loyalty
- How to launch and manage a loyalty program
Based upon the following peer-reviewed manuscript: Slubowski, H., Munoz, L., & Stodnick, M. (2022). Do Customers Want to Think or Feel the Love? The Antecedents to Positive Word-of-Mouth in Loyalty Programs. Society for Marketing Advances Annual Conference Proceedings. *Best Conference Paper and Best Paper – Advertising track.
