Recent introduction of aggregate loyalty programs from various brand alliances such as Ok Cashbag, LotteMembers, GS&Point, HappyPoint, CJ ONE, which enables accumulation and redemption of points, consumers now carry numerous types of point cards than the past. Accordingly, there are many cases where consumers carry more than one points cards(single/aggregate) of the same category of business.
The purpose of this study is to explore the effects of consumer regulatory focus based on points to purchase amount and sunk cost perception which can have an impact when loyalty programs are evaluated. Three experiments in total with a pretest were conducted.
Study 1 uses between subject design consisting of 2(regulatory focus: prevention/promotion)×3(card type: aggregate point card with lesser points to purchase amount/single operator point card with lesser points to purchase amount/single operator point card with greater points to purchase amount). The research finding shows consumers positively evaluated aggregate point cards over single operator point cards when the points to purchase amount were the same. However in case when points to purchase amount was greater in a single operator point card, prevention-focused consumers favored the single operator point card when promotion-focused consumers favored the aggregate point card.
Study 2 was conducted to confirm whether perceived difference(high/low) in points to purchase amount plays a role in card evaluation when single operator point cards have greater points to purchase amount than aggregate point cards. The finding using mixed subjects design consisting of 2(perception difference to point: high/low)×2(regulatory focus: prevention/promotion)×2(card type: single/aggregate) shows consumers evaluated both single and aggregate positively when they recognized greater difference in point accumulation. The reason for this finding is that respondents saw the cards as individual tasks, not to determine whether to choose between single operator and aggregate point cards. When consumers saw little differences in points to purchase amount, regulatory focus of moderate effect was shown as seen in Study 1.
Study 3 was conducted to discover the reasons why consumers continue to use single operator loyalty program despite many benefits offered by aggregate loyalty program. Mixed subjects design consisting of 2(point perception of single operator point card: high/low)×2(regulatory focus: prevention/promotion)×2(type of product: market/movie theater) were used to determine the impact of sunk cost perception of previous points. The research findings shows consumers positively evaluated aggregate point cards over single operator cards when they recognized little difference in sunk cost perception of single loyalty program. It also showed moderate effect of regulatory focus when they recognized greater difference in sunk cost perception in single operator point cards. It means prevention focused consumers positively evaluated single operator point cards when promotion focused consumers favored the aggregate point cards.
This research findings can bring strategic implications to corporate managers when there is lack of academic studies in aggregate loyalty program. implementing various marketing strategies, initiated based on consumers'' regulatory focus, should lead to more effective consumer attraction.