The Paradox of Points

In his research, Sören Köcher provides valuable insights on the paradoxical effects of the magnitude of a loyalty program medium—i.e. the sheer number of points, miles, or stamps credited for every purchase and required for reward redemption—on the central consumer decisions in loyalty program memberships. In sum, the results of twelve empirical studies reveal that high magnitude currencies improve the attractiveness of medium collection but entail reluctant medium spending behavior. These findings provide important implications for a more efficient usage of loyalty programs in business practices. In addition, this dissertation discovers a violation of one of the most fundamental assumptions of rational choice theory and thus contributes to a better understanding of when and why people deviate from rational decision-making.

Contents

• Conceptual background and literature review on loyalty programs
• Rational and descriptive theories of choice
• Empirical examination of medium magnitude effects on the central consumer decision fields in loyalty program memberships

Target Groups

• Academics and students in the fields of marketing, consumer behavior, and customer relationship management
• Practitioners concerned with designing and managing loyalty programs

The Author

Dr. Sören Köcher received hisdoctorate at the Department of Marketing, TU Dortmund University under the guidance of Prof. Dr. Hartmut H. Holzmüller.