Consumer reactance against loyalty programs

Abstract

Purpose - Although relationship marketing has developed into the prevailing marketing paradigm, it frequently encounters resistance from the demand side. Both management practitioners and academics indicate that at least some consumers show reactance against loyalty programs, i.e. against tactical instruments of relationship marketing. Nevertheless, relationship marketing has widely neglected reactance theory. This paper attempts to close this gap. Design/methodology/approach - Based on the fundamental principles of loyalty programs and reactance theory the paper presents a set of hypotheses on the determinants and effects of situational consumer reactance against loyalty programs. It tests these hypotheses on the basis of 388 face-to-face interviews with bookstore customers. These interviews include a between-subject manipulation on the reactance effect of economic, social-psychological, and contractual bonding potentials. To test the proposed hypotheses, the paper applies structural equation modeling with PLS. Findings - As expected, contractual bonds provoked reactance effects, while social-psychological bonds neither increased reactance, nor the perceived utility of the program. Economic bonds raised perceived utility up to a certain threshold level, from which the reactance effect dominated thereafter. Practical implications - As a consequence, a cautious and limited application of customer loyalty programs is advisable. The developed consumer reactance scale can help managers to evaluate the effects of planned or implemented customer retention measures. Originality/value - This is the first attempt to investigate situational reactance in a loyalty program setting. © Emerald Group Publishing Limited.