How to Design International Loyalty Programs

Abstract

Despite the growing importance of customer loyalty programs in marketing practice, research about international loyalty programs is few and far between. Especially the issue of whether loyalty programs can be standardized across countries has not been addressed so far. Hence, this paper investigates whether it is feasible to standardize loyalty program design in countries with different cultural dimensions. We conducted an online experiment with customers in four countries (Australia, Germany, South Korea, U.S.) to examine how benefits that are provided by loyalty programs are perceived by different customer groups in these cultural environments. Particularly social and confidence benefits were perceived differently suggesting the need to adapt loyalty program designs. We also found that if a country is characterized by individualism, customers are more strongly attracted by program loyalty. However, this does not necessarily translate into brand loyalty