The Effect of Framing on Loyalty Points Redemption

Ammar, Ali
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University of Guelph

This research was conducted to understand the effect of framing on loyalty program (LP) points redemption. Specifically, this study investigated whether the frame of a promotional message (gain frame or loss frame) had an impact on the customer’s likelihood to redeem their reward points. This study also asked the question whether attribute framing affects consumers’ purchase choice. This study’s final question was whether LP customers consider the worth of points offered the same as those points’ equivalent dollar value. The results showed that loss framed message’s effect on participant’s likelihood to redeem was marginally more significant than that of the gain framed message. The study also found that when customers were presented with promotional offers of equal financial benefit, they did not show a significant preference towards either earning (gaining) or redeeming (losing) miles. Finally, the study also found that LP customers did not consider the worth of their loyalty points to be same as equivalent dollar value of those points. The findings have important implications for loyalty marketing managers as they suggest tactics that can be used to enhance redemption in existing LPs.

Loyalty, Framing, Prospect Theory, Redemption