Short-term Impact of Item-based Loyalty Program on Customer Purchase Behaviors

Studies based on the analysis of a new design of loyalty program, item-based loyalty programs (IBLPs), indicate that customers are more interested in item-based reward points than in traditional price discounts. However, we are still unaware of customer responses to the different point settings on IBLP items. This study investigates an analysis with Tobit II to explore IBLPs’ short-term (4 months) impact on customers’ purchase behaviors using data from two newly opened Japanese supermarket chains that have implemented this new IBLP program from the beginning. The results showed that different types of customers are differently affected by IBLPs, and that heavy customers are more inclined to purchase more items with more spending money than others. The results also indicated that customers’ purchase behaviors are affected by IBLPs’ different point levels. Moreover, to an IBLP with different points, the responses from different types of customers are different. The findings of this study have important guiding significance in IBLP design and marketing management.