Rewards that Undermine Customer Loyalty

Kim, Kyongseok, and Sun Joo (Grace) Ahn, “Rewards that Undermine Customer Loyalty? A Motivational Approach to Loyalty Programs,” paper accepted for presentation at the 2016 American Academy of Advertising (AAA) Conference, March 17-20, 2016, Seattle, WA.

Abstract: Based on the Self-Determination Theory, this study examined the effects of rewards on undermining customers’ intrinsic motivation to engage in loyalty programs. Two experiments revealed that participants who received a salient reward (with an explicit requirement, deadline, without the option of choice) reported lower intrinsic motivation to use the loyalty program than those who received a non-salient reward (with a less explicit requirement, deadline, and the option of choice). However, the lowered intrinsic motivation of those who received the salient reward was found to be enhanced by a verbal reinforcement that acknowledge their potential negative feelings toward using the program.

Sun Joo (Grace) Ahn