Featured Research

from universities, journals, and other organizations

VIP loyalty programs: Consumers prefer awards they can share

Date:
October 15, 2013
Source:
Journal of Consumer Research, Inc.
Summary:
Consumers appreciate being able to share their perks with others, and will sacrifice exclusivity to do so.

Consumers appreciate being able to share their perks with others, and will sacrifice exclusivity to do so, according to a new study in the Journal of Consumer Research.

"Companies spend billions of dollars each year on customer loyalty or VIP programs in an effort to reward loyal customers and make them feel both special and a sense of status," write authors Brent McFerran (University of Michigan) and Jennifer J. Argo (University of Alberta). Many loyalty programs, like airline lounges, luxury boxes, and hotel rooms extend benefits to guests of the VIP, or "an entourage."

"These entourage members have typically done nothing to earn the preferential treatment, and may potentially dilute the prestige of the services, because the perks are extended to people merely on the basis of who they know," the authors explain. "In other words, entourage members receive undeserved perks, and these people make VIP rewards less scarce."

The authors wondered whether extending the preferential treatment to the entourage dilutes the prestige of rewards programs. Across six studies, they found that loyalty program members value the ability to share an experience with their guests. Most surprisingly, they are willing to trade the scarce nature of preferential treatment in order to do so. For example, in one study, consumers imagined attending a dinner party with a political figure of their choice. The bigger the entourage, the more the feeling of status increased.

In another study, consumers were invited up to a luxury box during a professional football game. Those who had an entourage with them felt a higher degree of status. Finally, they showed that feelings of social connection underlie the effect. An entourage makes one feel socially connected, and these feelings of connectedness with others make consumers feel a sense of personal status.

"Scarcity and value are strongly linked. What we found most interesting was not just that people want to bring guests, but that they were willing to trade off scarcity of rewards in order to do so," the authors write. "People are willing to trade rare rewards for more common ones, if they get to share these experiences with their friends.


Story Source:

The above story is based on materials provided by Journal of Consumer Research, Inc.. Note: Materials may be edited for content and length.


Journal Reference:

  1. Brent McFerran and Jennifer J. Argo. The Entourage Effect. Journal of Consumer Research, February 2014

Cite This Page:

Journal of Consumer Research, Inc.. "VIP loyalty programs: Consumers prefer awards they can share." ScienceDaily. ScienceDaily, 15 October 2013. <www.sciencedaily.com/releases/2013/10/131015113456.htm>.
Journal of Consumer Research, Inc.. (2013, October 15). VIP loyalty programs: Consumers prefer awards they can share. ScienceDaily. Retrieved October 21, 2014 from www.sciencedaily.com/releases/2013/10/131015113456.htm
Journal of Consumer Research, Inc.. "VIP loyalty programs: Consumers prefer awards they can share." ScienceDaily. www.sciencedaily.com/releases/2013/10/131015113456.htm (accessed October 21, 2014).

Share This



More Science & Society News

Tuesday, October 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

CDC Revamps Ebola Guidelines After Criticism

CDC Revamps Ebola Guidelines After Criticism

Newsy (Oct. 21, 2014) The Centers for Disease Control and Prevention have issued new protocols for healthcare workers interacting with Ebola patients. Video provided by Newsy
Powered by NewsLook.com
'Cadaver Dog' Sniffs out Human Remains

'Cadaver Dog' Sniffs out Human Remains

AP (Oct. 21, 2014) Where's a body buried? Buster's nose can often tell you. He's a cadaver dog, specially trained to find human remains and increasingly being used by law enforcement and accepted in courts. These dogs are helping solve even decades-old mysteries. (Oct. 21) Video provided by AP
Powered by NewsLook.com
Traditional Farming Methods Gaining Ground in Mali

Traditional Farming Methods Gaining Ground in Mali

AFP (Oct. 20, 2014) He is leading a one man agricultural revolution in Mali - Oumar Diatabe uses traditional farming methods to get the most out of his land and is teaching others across the country how to do the same. Duration: 01:44 Video provided by AFP
Powered by NewsLook.com
Your Birth Season Might Determine Your Temperament

Your Birth Season Might Determine Your Temperament

Newsy (Oct. 20, 2014) A new study says the season you're born in can determine your temperament — and one season has a surprising outcome. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins