Loyalty Program B-B

Working paper Management Sciences GR 08-01

The impact of loyalty programs in a B-to-B context – results of an experimental design

P.G. (Peter) Daams, MSc. Marketing Executive Business Services at a supplier of office products and services in the Netherlands Dr. C.J. (Kees) Gelderman Associate professor at the Open University of the Netherlands, kees.gelderman@ou.nl Dr. J.M.C. (Jos) Schijns, MBA * Assistant professor at the Open University of the Netherlands, jos.schijns@ou.nl

* Corresponding author

The impact of loyalty programs in a B-to-B context – results of an experimental design

Abstract Studies on the effects of customer loyalty programs have produced ambiguous and mixed results, while researchers have not widely explored the impact of loyalty programs in a B-to-B context. This study aims to contribute to our knowledge about the impact of loyalty programs on the loyalty of customers in business markets. While most studies are based on cross-section data, panel data and Dirichlet models, we have used a powerful, classic before-and-after experimental design in a real-life setting. The data allowed for testing hypotheses on the loyalty effect and the selection effect of a loyalty program which was introduced by a supplier of office products. The results indicate that a customer loyalty program, even in a B-to-B setting, has a significant and positive effect on both behavioural and attitudinal loyalty. The findings suggest that participants in the program change their purchase behaviour and feel more committed since joining. In addition, a selection effect was found, indicating that loyalty programs attract customers that were more loyal, even before joining the program.

Keywords Loyalty program, behavioural loyalty, attitudinal loyalty, selection effect, Customer Relationship Management

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1. Introduction An overwhelming number of studies have discussed and tested the concept of customer loyalty (e.g., Baldinger and Rubinson, 1996;...