The Electronic Journal of Information Systems Evaluation provides critical perspectives on topics relevant to Information Systems Evaluation, with an emphasis on the organisational and management implications
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Journal Issue
Volume 12 Issue 1, ECIME 2008 / Jan 2009  pp1‑118

Editor: Dan Remenyi

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Multitasking: the Uncertain Impact of Technology on Knowledge Workers and Managers  pp1‑12

Frank Bannister, Dan Remenyi

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A Case Study of SME Web Application Development Effectiveness via Agile Methods  pp13‑26

Peter Clutterbuck, Terry Rowlands, Owen Seamons

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Improving the Benefits of IT Compliance Using Enterprise Management Information Systems  pp27‑38

Renata Paola Dameri

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National Survey of SMEs' Use of IT in Four Sectors  pp39‑50

R. Dyerson, G. Harindranath, D. Barnes

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Reward Systems in the Post Digitization Era: Possible Benefits and Risks  pp51‑58

Pontus Fryk

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Bronze, Silver and Gold: Effective Membership Design in Customer Rewards Programs  pp59‑66

Anders Hederstierna, Henrik Sällberg

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Abstract

Many companies use rewards programs to create so called "loyal" customers. Information Technology (IT) has made it possible to design such incentive programs in principle with endless variations at a low cost. It means that the company can, with the use of IT, offer non‑linear incentives that create "loyal" customers more effectively than linear ones. Internet has also reduced the cost for the customer to search and compare products and services like air flights, hotels etc. In such a competitive context, the company can use the programs to gain an advantage with a differentiated offer to the customer and to create lock‑in effects still at a low IT cost. Field observations show surprisingly that programs look very much alike and do not present as much variation as could be expected. Of special interest in this paper is the fact that companies typically offer three, or less, membership levels to increase the incentive for the customer to spend money at the company. These three levels come in different versions like, for example, "Bronze", "Silver" and "Gold" or with similar labels. The reward to the customer is generally associated and accelerated with membership level. In this paper, we analyze the consequences of using membership levels as a way to create both competitive differentiation and effective customer incentives. We suggest a model for understanding how the consumer decides on spending at a company that offers a reward program with different membership levels. The decision setting for the customer is described as a risky contract with a risky time‑state‑contingent claim. The contract is risky since the terms and conditions for membership can be altered by the company, without any legal penalties. The claim is risky since it is uncertain to the customer whether the state required for the membership will be achieved. We show with the help of this model that the present use of a small number of membership levels could be questioned as the most effective incentive mechanism. 

 

Keywords: customer rewards program, customer loyalty, membership levels, incentives, differentiation, time-statecontingent claims

 

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Organisation Profiling and the Adoption of ICT: e‑Commerce in the UK Construction Industry  pp67‑74

Martin Jackson, Andy Sloane

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Adoption and Evaluation of Mobile Commerce in Chile  pp75‑88

Ranjan B. Kini

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Where is Information Ethics in Iranian Library and Information Science Publications and Services?  pp89‑94

Mortaza Kokabi

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The Patient Data Analysis Information System: Addressing Data and Information Quality Issues  pp95‑108

David Sammon, Kieran A. O'Connor, John Leo

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A Guideline for Virtual Team Managers: the Key to Effective Social Interaction and Communication  pp109‑118

Lara Schlenkrich, Christopher Upfold

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