What Dictates Consumer's Loyalty?

Abstract: Since American Airlines launched its first frequent flyer program in the 1980s the usage of customer loyalty programs has spread greatly. Now they are found in many industries in different shapes and forms. Empirical support and research behind loyalty programs as a legitimate marketing method is however double-barreled in terms of positive and negative findings. One side points to generally positive outcomes such as increased retention rate and share-of-wallet. Another side of the research means that other factors like satisfaction are what determine repurchase intentions rather than loyalty program presence. The aim of this study is therefore to examine how the perception of a customer loyalty program, purchase motivation for low prices and satisfaction determines customer loyalty. A self-completion questionnaire for members of a Swedish sports retailer's loyalty program was conducted to examine the research questions. Results display that satisfaction was the only statistically significant predictor of loyalty. Perceived advantages, perceived complexity, and purchase motivation for low prices did not determine loyalty. Additionally, different membership levels at the focal loyalty program turned out to have significant differences in perceived advantages, satisfaction, and loyalty.