Rewards that Undermine Customer Loyalty
Rewards that Undermine Customer Loyalty
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.
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