Earning the Right to Indulge: Effort as a Determinant of Customer Preferences toward Frequency Program Rewards

Although frequency programs (FPs) have become ubiquitous in the marketplace and a key marketing-mix tool for promoting customer relationship and loyalty, little is known about the factors that determine how such programs are evaluated by consumers. The authors investigate the impact of the level of effort participants must invest to obtain the reward on the types of rewards they prefer and, consequently, on the decision to join the FP. In particular, the authors propose that higher required effort shifts consumer preferences from necessity to luxury rewards, because higher efforts reduce the guilt that is often associated with choosing luxuries over necessities. A series of studies with approximately 3100…