Customers expectations and loyalty

to their loyalty programs

How customers are reacting according to their socio-demographic
factors.

Author:
Loriane
GenreGrandpierre
Tutor: Mosad Zineldin
Examiner: Anders Pehrsson
Date: 2015-05-29
Subject: Thesis, Advanced level
Level: Master thesis
Course code: 5FE00E

ABSTRACT
Title:

Expectations of customers to their loyalty programs: how customers react

according to their socio-demographic factors.

Keywords:

Loyalty programs, Perceived benefits, Demographic factors, Customer loyalty,

Satisfaction

Background: Nowadays with the very competitive business environment, it is essential for
companies to gain loyal customers. Loyalty programs are one of the tools at the
disposition of companies to attract and retain their customers. The relationship
between customer loyalty and some socio-demographics factors have been a
subject of researches but the specific relationship between socio-demographics
factors and customer loyalty programs has not been studied yet. This study is
going to try to fulfil this gap.

Purpose:

To study the influence of socio-demographic factors on customers

expectations of their loyalty programs and on their loyalty.

Research questions:
1. Which socio-demographic factors are influencing customers expectations of their
loyalty programs?
2. Which socio-demographic factors are influencing program loyalty and company
loyalty?

Methodology: Quantitative research.

Conclusion: It is possible to say that all socio-demographic factors studied have an
influence on at least one of the expectations of customers concerning their
loyalty programs and on their loyalty too. Those factors are then really
important for a company to look at when they start a loyalty program or when
they try to improve it.

Table of contents
1 INTRODUCTION ........................................................................................................................................... 1
1.1 BACKGROUND ........................................................................................................................................... 1
1.2 PROBLEM FORMULATION ..................................................................................................................... 2
1.3 RESEARCH GAP AND PURPOSE ............................................................................................................ 3
1.4 REPORT STRUCTURE .............................................................................................................................. 4
2 THEORETICAL FRAMEWORK .................................................................................................................. 5
2.1 CUSTOMER LOYALTY PROGRAMS ...................................................................................................... 5
2.2 PERCEIVED BENEFITS ............................................................................................................................ 6
2.2.1 UTILITARIAN BENEFITS ....................................................................................................................................... 6
2.2.2 HEDONIST BENEFITS ............................................................................................................................................. 6
2.2.3 SYMBOLIC BENEFITS .............................................................................................................................................. 7
2.3 CUSTOMER LOYALTY .............................................................................................................................. 8
2.3.1 CUSTOMER LOYALTY AND SATISFACTION .................................................................................................. 8
2.3.2 LOYALTY TO THE PROGRAM ............................................................................................................................... 9
2.3.3 LOYALTY TO THE COMPANY ............................................................................................................................... 9
2.4 SOCIO-DEMOGRAPHIC FACTORS ..................................................................................................... 10
2.4.1 GENDER ..................................................................................................................................................................... 10
2.4.2 AGE .............................................................................................................................................................................. 10
2.4.3 EDUCATION ............................................................................................................................................................. 11
2.4.4 INCOMES ................................................................................................................................................................... 11
2.4.5 MARITAL AND PROFESSIONAL STATUS ..................................................................................................... 11
2.5 CONCEPTUAL FRAMEWORK .............................................................................................................. 12
3 METHODOLOGY ........................................................................................................................................ 14
3.1 RESEARCH APPROACH ........................................................................................................................ 14
3.1.1 INDUCTIVE VS. DEDUCTIVE RESEARCH ..................................................................................................... 14
3.1.2 QUALITATIVE VS. QUANTITATIVE RESEARCH ........................................................................................ 15
3.2 RESEARCH DESIGN ............................................................................................................................... 16
3.3 DATA SOURCES ...................................................................................................................................... 17
3.4 RESEARCH STRATEGY ......................................................................................................................... 17
3.5 DATA COLLECTION METHOD ............................................................................................................ 19
3.6 OPERATIONALIZATION ...................................................................................................................... 19
3.6.1 OPERATIONALIZATION TABLE ...................................................................................................................... 20
3.7 SAMPLING ................................................................................................................................................ 21
3.8 SAMPLING FRAME ................................................................................................................................. 22
3.9 QESTIONNAIRE DESIGN ...................................................................................................................... 22
3.10 DATA ANALYSIS METHOD ............................................................................................................... 23
3.10.1 PEARSONS CORRELATION ............................................................................................................................ 23
3.10.2 ANOVA ANALYSIS ............................................................................................................................................... 24
3.11 QUALITY CRITERIA ............................................................................................................................ 24
3.11.1 RELIABILITY ......................................................................................................................................................... 24
3.11.2 VALIDITY ................................................................................................................................................................ 25
3.12 SUMMARY ............................................................................................................................................. 26
4 EMPIRICAL FINDINGS ............................................................................................................................. 27
4.1 PEARSONS CORRELATION ................................................................................................................ 27
4.2 PRESENTATION OF THE RESULTS H1 ............................................................................................. 28
4.2.1 GENDER ..................................................................................................................................................................... 28
4.2.2 AGE .............................................................................................................................................................................. 28

4.2.3 EDUCATION ............................................................................................................................................................. 29

4.2.4 MARITAL STATUS ................................................................................................................................................. 30
4.2.5 PROFESSIONAL STATUS ..................................................................................................................................... 31
4.2.6 INCOMES ................................................................................................................................................................... 31
4.3 CUSTOMER LOYALTY ........................................................................................................................... 32
4.3.1 GENDER ..................................................................................................................................................................... 32
4.3.2 AGE .............................................................................................................................................................................. 33
4.3.3 EDUCATION ............................................................................................................................................................. 33
4.3.4 MARITAL STATUS ................................................................................................................................................. 34
4.3.5 PROFESSIONAL STATUS ..................................................................................................................................... 35
4.3.6 INCOMES ................................................................................................................................................................... 36
5 ANALYSIS .................................................................................................................................................... 36
5.1 CUSTOMERS EXPECTATIONS ABOUT LOYALTY PROGRAMS ................................................. 36
5.1.1 GENDER ..................................................................................................................................................................... 37
5.1.2 AGE .............................................................................................................................................................................. 37
5.1.3 EDUCATION ............................................................................................................................................................. 38
5.1.4 MARITAL STATUS ................................................................................................................................................. 38
5.1.5 PROFESSIONAL STATUS ..................................................................................................................................... 38
5.1.6 INCOMES ................................................................................................................................................................... 39
5.1.7 SUMMARY ................................................................................................................................................................. 39
5.2 CUSTOMER LOYALTY ........................................................................................................................... 40
5.2.1 GENDER ..................................................................................................................................................................... 40
5.2.2 AGE .............................................................................................................................................................................. 40
5.2.3 EDUCATION ............................................................................................................................................................. 40
5.2.4 MARITAL STATUS ................................................................................................................................................. 41
5.2.5 PROFESSIONAL STATUS ..................................................................................................................................... 41
5.2.6 INCOMES ................................................................................................................................................................... 41
5.2.7 SUMMARY ................................................................................................................................................................. 42
6 CONCLUSION .............................................................................................................................................. 43
7 DISCUSSION ................................................................................................................................................ 43
7.1 LIMITATION ............................................................................................................................................ 43
7.2 MANAGERIAL IMPLICATIONS ........................................................................................................... 44
7.3 FUTURE RESEARCH .............................................................................................................................. 44
REFERENCES .................................................................................................................................................. 46
APPENDIX ....................................................................................................................................................... 54
APPENDIX A QUESTIONNAIRE ....................................................................................................................... 54
APPENDIX B - PRESENTATION OF THE DEMOGRAPHIC FACTORS (SPSS) ..................................................... 58
APPENDIX C SATISFACTION (AUTHORS ELABORATION) ............................................................................ 59
APPENDIX D CUSTOMERS EXPECTATION ACCORDING TO THEIR LOYALTY PROGRAMS (AUTHORS
ELABORATION) .................................................................................................................................................. 60
APPENDIX E CUSTOMER LOYALTY ACCORDING TO THEIR LOYALTY PROGRAMS (AUTHORS
ELABORATION) .................................................................................................................................................. 60

1 INTRODUCTION
1.1 BACKGROUND
Nowadays, a very competitive business environment is occurring (Bose and Rao, 2011). It can be
difficult for a customer to appreciate the distinction between different companies products or
services (Ibid.). In this context, it is challenging for companies to gain loyal customers, as it is
nearly always possible for them to choose an alternative for the same product (Ibid.). According to
McIlroy and Barnett (2000, p. 348) loyalty can be described as customers commitment to do
business with a particular organization, purchasing their goods and services repeatedly, and
recommending the services and products to friends and associates. Loyal customers are better
customers for companies as they tend to spend more regularly and more money than the other
customers (Selin et al.,1988). Moreover, if customers are satisfied and loyal to a brand they could
also generate new customers though a positive word of mouth (O Brien and Jones, 1995). The
financial cost for a company is also a motive, as it has been estimated that attracting a new
customer is three to five times more costly than retaining an existing customer (Jang and Mattila,
2005, p. 402).
Loyalty programs are significant tool of firms Customer Relationship Management (also CRM)
strategies to retain customers (Liu, 2007). Their aim is to attract new customers, retain existing ones
by rewarding their purchases with the aim of increasing their spending and their loyalty to the brand
or to the company (Ibid). Demoulin and Zidda (2009) are showing that firms are using loyalty
programs for three reasons: retain their customers, make them more loyal and gather as many
information as possible on their customers shopping attitude. Dowling and Uncles (1997) are
listing more reasons to explain why firms are creating and using loyalty programs: to protect sales,
margins and profit; strengthen loyalty and increase the value for the existing customer; stimulate
existing customers cross-product sale; use them as a tool for differentiate themselves compared to
competitors; make the entry of a new brand more difficult; and to finish make the introduction of a
comparable loyalty program more difficult. Loyalty programs have extended during the last decades
and are really popular especially in the retail industry (Berman, 2006). Around 90% of consumers
in UK, United States and Canada are involved at least in one loyalty program (Ibid). Because of the
omnipresence of customer loyalty programs, several researches have been done to measure the
effectiveness of them or the benefits for companies (Bolton et al., 2000). Those programs had
become more and more complex because of CRM systems and they now give access to customers
private information like purchase tracking or preferences (Injazz and Popovich, 2003).


The expansion of loyalty programs has led to changes in the loyalty of customers: according to Yi
and Jeon (2003) there are now two different kind of loyalty: program loyalty and brand loyalty.
Similarly, others researchers such as Evanschitzky et al. (2011) differentiate loyalty to the program
itself and the loyalty to the company. The first kind of loyalty can be defined as a high relative
attitude leaning toward the loyalty program (Yi and Jeon, 2003, p. 232). On the other hand,
Sirdeshmukh, Singh, and Sabol (2002) are giving the following definition for company loyalty:
intention to perform a diverse set of behaviours that signal a motivation to maintain a relationship
with the focal firm. The relationship between customer loyalty and some socio-demographics
factors have been a subject of researches. Women tend to regard highly a long-term relationship
with a brand and as consequences are expected as more loyal compared to men (Patterson, 2007).
Ndubisi (2007) has explored the question of the difference between ages towards customer loyalty
and has found that there is one. Complementarily, Patterson (2007) is arguing that loyalty is more
common upon senior person than young people. Some researchers have found that both genders are
joining loyalty programs but the distinction between them is when it comes to loyalty and their
shopping behaviours (Kuruvilla, Joshi and Shah, 2009). Nevertheless, the specific relationship
between socio-demographics factors and customer loyalty programs has not been studied yet. For
this study, gender, age, education, professional status, marital status and incomes are going to be
studied in the specific area of customer loyalty programs.

1.2 PROBLEM FORMULATION

The efficiency of loyalty programs is still questionable and some researches are even showing that
nowadays, with the multiplying of those programs, the link between them and customer loyalty is
not automatic (Uncles and Dowling, 2003).
Prior researches have explored the factors of success for loyalty programs. Jang and Mattila (2005)
have focused their research on the preferences of customers upon the types rewards; on the other
hand Keh and Lee (2006) have explored the question of customers preferences about the timing of
rewards. The type of rewards is about what kind of rewards the customer is going to receive (e.g.
Monetary vs non-monetary rewards); whereas the timing refers to when the customers prefer to
receive the reward (Jang and Mattila, 2005; Keh and Lee, 2006).
Other researchers have shown that monetary rewards were the main interest in joining a loyalty
program (e.g. Berry, 1995; Peterson, 1995). Minouni-Chaabane and Volle (2010) have later
developed a scale to measure the impact of perceived benefits of loyalty programs upon customer
loyalty. Their research was made to fill the gap on customers point of view on loyalty programs
(Ibid). It shows that there is five types of perceived benefits which all are important: monetary


savings, exploration, entertainment, recognition, and social benefits (Ibid.). Several other researches
have followed to enhance or apply this scale to different sector or cultures (Kim and al, 2013; Bose
and Rao, 2011; Wel and al., 2011). This scale is going to be used in this study to understand the
expectations of customers about their loyalty programs, the benefits they received from them and
the loyalty that implies from it.

1.3 RESEARCH GAP AND PURPOSE

Customer loyalty and customer loyalty programs have been a large source of interests for
researchers. As seen before, some researches about the impact of gender and age on customer
loyalty have been done already (Ndubisi, 2006; Kuruvilla, Joshi and Shah, 2009; Patterson, 2007).
In his study Ndubisi (2006) is arguing that for futures researches on the subject of customer loyalty
it would be good to consider more demographic factors other than gender. McGoldrick and Andre
(1997) also have the same opinion on the fact that it is important to look at demographic factors
when studying customer loyalty. Moreover, the focus of those studies was on customer loyalty and
there are only few researches about the impact of demographic factors in the specific subject of
customer loyalty programs. It is important to differ people according to socio-demographic factors
when looking at their membership to a loyalty program. In fact, it will not mean the same according
to those differences and the expectation they have on it could differ according to the situation they
are in (OMalley, 1998).
This research is going to try to intend to fulfil this gap. The following demographic factors are
going to be used to evaluate their influence on customers expectations and perceptions of loyalty
programs benefits: gender, age, education, level of income, marital and professional situation. Thus
the purpose of the thesis is to investigate how socio-demographic factors can influence the
perception of loyalty programs as well as their loyalty. To reach this purpose, the thesis answers the
following question: How socio-demographic factors are influencing customer loyalty programs?
The research question is separated into this two following sub-questions:
1. Which socio-demographic factors are influencing customers expectations of their
loyalty programs?
2. Which socio-demographic factors are influencing customers loyalty?

The objective of the study is to present an empirical knowledge on how customers value their
loyalty programs according to their identity and background and consequently display if the loyalty
programs are in accordance with those results.

1.4 REPORT STRUCTURE

This paper is composed with seven chapters. The first chapter is an introduction where the
background and the problem formulation of the study are presented. It also includes the research
gap, which have been pointed out thought previous researches and thus is the purpose of this study.
The second chapter is the literature review and the theoretical framework. It includes theory and
concepts about customer loyalty programs, their benefits, customer loyalty and socio-demographic
factors. Moreover, the research model is displayed in this chapter. Chapter 3 is the methodology
information about the research. The author has chosen to conduct a deductive approach with
primary data. It has been chosen to conduct a descriptive and quantitative research with
questionnaire as data collection method. The operationalization table is presented with the different
measures used. In the chapter 4, the results of the surveys are displayed. To facilitate the
understanding of the findings, data is presented thanks to recap charts that are based on the results
from SPSS. Correlation and ANOVA analysis have been chosen to analyse the data statistically.
The chapter 5 is analysing those results. The aim of this chapter is to discuss the influence of sociodemographic factors on the perceived benefits of loyalty program and on customer loyalty. The
chapter 6 is presenting the conclusion of this research. The chapter 7 is the last one and present a
discussion of the conclusion of the study with a presentation of its limitation, the managerial
implication of this conclusion and some recommendation for future research.

2 THEORETICAL FRAMEWORK
In this chapter the concepts used in this study are going to be presented. First there is an
introductory part about loyalty programs, followed by a review of their perceived benefits and to
finish, customer loyalty is going to be broached.

2.1 CUSTOMER LOYALTY PROGRAMS

The definition of loyalty programs has interested different researchers. Liu (2007) is defining
loyalty programs as a program that recompenses customers with free rewards when they are buying
repeatedly with a firm. This definition puts emphasis on the importance of purchases repetition, as
the program will not be advantageous for the customer for only one purchase but from several
(Ibid.). One of the tools that enhance customer loyalty programs is the targeted communication and
the customization the program according to the customer (Lacey and Sneath, 2006). As
consequences, customers loyalty programs are different from the firms promotional campaign
because of their long-term objectives (Sharp and Sharp, 1997).
Specific areas of customer loyalty programs have been observed (Bose and Rao, 2011). One of the
main areas that have been research about is the impact of customer loyalty programs on customers,
on customers or marketers point of view (Ibid.). Dowling and Uncles (1997) are showing that the
value of the companys products or services is improved by effective loyalty programs and are
provoking a good retention of customers. Several others researchers have proved the effectiveness
with loyalty programs on the fact that customers are going to buy again with this specific firm. For
example, Knox and Denison (2000) studied loyalty programs in the specific industry of e-grocery
store in UK and their effect on customers loyalty and retention. The study shows that loyalty
programs are increasing the annual amount of purchase by customers (Ibid.). Loyalty programs tend
to have a higher impact on moderate and light buyers because they are increasing their purchase
frequency, whereas studies have shown that it is not the case for heavy buyers who tend to just
collect their rewards without increasing their purchase frequencies (Liu, 2007; OBrien and Jones,
1995). Moreover, loyalty programs also have an impact on customers perception of prices and
competition (Bose and Rao, 2011). A large number of researchers have explored the impact of
loyalty programs on customers price sensitivity, and most of them have concluded that a loyal
customer have a lower sensitivity to prices (e.g., Guadagni and Little 2008; Srinivasan and al.,
2002), especially when it is associated with easy and quick earned rewards (Nako, 1997). Loyalty
programs also have impacts on customers perception of competitors prices; as they are going to
purchase repeatedly from a specific firm, they will loose track of competitors prices (Reichheld,


1996). Nevertheless, Liu and Yang (2009) are showing with their study of airline industry that
successful loyalty programs, in a very competitive market, tend to be those from high market share
firms. In fact, they are going to be the only one to be able to increase their sales thanks to loyalty
programs because of their strong customer base and products (Bose and Rao, 2011).

2.2 PERCEIVED BENEFITS

Academics have research about the link between the benefits of a loyalty program and customer
loyalty to those programs. Indeed, Leenheer and al. (2007) found that customers are more likely to
join a loyalty program if they see that they will receive economical or non-economical benefits
from it. Moreover, if they perceive that this specific program is more interesting for them than those
from competitors, they will be more inclined to participate to this program (Wirtz and al. 2007).
Perceived benefits of a loyalty program can be divided into three categories: utilitarian benefits
(monetary savings), hedonic benefits (exploration and entertainment) and symbolic benefits
(recognition and social benefits) (Minouni-Chaabane and Volle, 2010).

2.2.1 UTILITARIAN BENEFITS

Utilitarian benefits can be defined as the functional, instrumental and practical benefits of a loyalty
program (Chitturi and al., 2007). Utilitarian benefits report to basic desire like safety needs and
generally refer to a products tangible attributes (Minouni-Chaabane and Volle, 2010). Customers
arbitrate characteristics of a loyalty program by its success to accomplish what it was supposed to,
meaning if the utilitarian value have been reach (Ibid.). Utilitarian benefits is basically monetary
savings (Ibid.)
2.2.1.1 MONETARY SAVINGS

Monetary savings seem to be the most important motivation for consumers to join a loyalty
program (Peterson, 1995). To start a relationship, customers need to perceive that the firm is going
to offer them more value with a lower price (Parvatiyar and Sheth, 1995). Monetary saving can be
cash-back offer or coupon that customers can accumulate by buying regularly with the same firm
(Minouni-Chaabane and Volle, 2010).

2.2.2 HEDONIST BENEFITS

Hedonic benefits refer to the experiential and enjoyment-related benefits of the loyal program
(Chitturi and al., 2007). They can be experienced throughout shopping, the use of a media and they


have a positive impact on customer loyalty (Arnold and Reynolds, 2003, Babin and Attaway, 2000,
Babin et al., 1994, Jones et al., 2006 and McQuail et al., 1972). They can be divided into two
dimensions: exploration and entertainment (Minouni-Chaabane and Volle, 2010).

2.2.2.1 EXPLORATION

Exploratory behaviours are the fact for consumers to desire to experience new or innovative
products or services, to challenge their curiosity by changing their purchase habits, seeking new
information about products or promotional offers and so forth (Arnold and Reynolds,
2003 and Baumgartner and Steenkamp, 1996). Consumer magazines or direct mail can be tools for
customers exploration (Minouni-Chaabane and Volle, 2010).

2.2.2.2 ENTERTAINMENT

Loyalty programs can allow customers to collect and redeeming points, which is entertaining for
them (Johnson, 1999). Entertainment can also be because of the possibility of enjoying experiences
or activities that would not have been possible if they did not had join the program (MinouniChaabane and Volle, 2010). In fact, most of loyalty programs are offering attractive and enjoyable
incentives to provide joy and make customer see loyalty program as an end in itself (Ibid.).

2.2.3 SYMBOLIC BENEFITS

Symbolic benefits are linked to personal expression, self-esteem and social approval and are
provided by extrinsic advantages of a specific product or services (Keller, 1993). Loyalty programs
are offering those symbolic benefits by differentiate customers in members and non-members by
having some special treatments for the first category, which can be considered as a sign of respect
or distinctiveness (Gordon et al., 1998).

2.2.3.1 RECOGNITION

Csikszentmmihalyi (2000) is pointing out that member of loyalty programs are consequently
experiencing recognition benefits. Recognition can be defined as the customers feeling about their
retailer treating them better than non-members (Beatty et al., 1996 and Gwinner et al., 1998). It can
be perceived by special status, feeling distinguished and special treatments (Minouni-Chaabane and
Volle, 2010)


2.2.3.2 SOCIAL BENEFITS

Social benefits can be defined as the feeling of being part of an exclusive group that share common
values about the brand (Muniz and O'Guinn, 2001). Customers see themselves as privileged
customers and identify themselves with this specific group (Ibid.)

2.3 CUSTOMER LOYALTY

2.3.1 CUSTOMER LOYALTY AND SATISFACTION
The concept of loyalty in marketing has been research a lot by academics. Past studies have shown
that customer satisfaction tend to lead to customer loyalty (Bose and Rao, 2011). A customer is
going to stay loyal if he or she perceives that the company gives him or her better product or
services than competitors (Ibid.). In a business perceptive, loyalty is defined as the commitment of a
customer to have a business relationship with a specific organisation, by buying their products or
services repeatedly and having the desire of recommending the products or services to friends and
associates (McIlroy and Barnett, 2000). Shoemaker and Lewis (1999) are defining loyalty as . . .
loyalty occurs when the customer feels so strongly that you can best meet his or her relevant needs
that your competition is virtually excluded from the consideration set and the customer buys almost
exclusively from you. Oliver (1999) contradicts those definitions of loyalty, as he considers that
past definitions are unsuccessful to give a unitary definition of it and fail to integrate the attitudinal
perspective of it. Attitudinal loyalty involves cognitive, affective and conative aspects (Oliver,
1997) and more recently the author has added a fourth phase, which is action (Oliver, 1999). The
first stage is the cognitive one and is constructed thanks to prior knowledge or experience about a
specific company (Olivier, 1997). The second stage is the affective phase, which is the fact of
liking or have feelings for a brand. After this one comes the conative loyalty when the customer has
the intention to keep purchasing a product with this specific firm. The final stage is the action
loyalty, which is the transformation of intention of buying into the readiness to act. (Oliver, 1999)
Retaining existing customers is crucial in retail markets because of the intense competition that is
occurring (Sirohi et al., 1998) and it has become a strategy in itself to conserve a competitive
advantage over competitors (Grnroos, 2009). Moreover, Reichheld (2001) has pointed out that a
loyal customer is costing less to a company than creating a new one.
Marketing literature is considering that satisfaction is a necessary antecedent to customer loyalty
(Sivadas and Baker-Prewitt, 2000; Abdullah and al., 2012). Consumer satisfaction had a lot of
definition throughout academic literature. Satisfaction can be defined as an evaluative judgement
that is occurring after doing the choice of buying a specific product or service (Day, 1984).


Generally the evaluation of satisfaction is happening by comparing the expectation of customers
before buying the item and the performances of the item perceived after the purchase (Bearden and
Teel, 1983; Oliver, 1980; Westbrook, 1980). Satisfaction is as consequence a result of the
evaluation of the perceived performance of the item, it could be confirmed or not (Danaher and
Haddrell, 1996).
The most accepted view is that satisfaction has a positive impact on loyalty (Sivadas and BakerPrewitt, 2000; Abdullah and al., 2012). Nevertheless, it is important to see that there is more than
just this relation between the two concepts as even satisfied customers could be unfaithful to a
brand. Reichhelds (1996) research has concluded that 65% to 85% of the disloyal customers were
actually satisfied or very satisfied. In the same way, Chandrashekaran and al. (2007) are studying
the results obtained by the U.S. Office of Consumer Affairs (Technical Assistance Research
Program, 1986) and pointed out that only 54% of household who have faced services problems
were satisfied by the resolution of those problems but they would not remain. Moreover, another
study has shown that only 25% of the variance in repeated purchase is explained by satisfaction
(Henard and Szymanski, 2001).

2.3.2 LOYALTY TO THE PROGRAM

Companies are creating loyalty programs in the aim of influencing the way and the frequency of
customers buying, what they think about the company, their relationship with it and to create more
loyalty among those customers (Henderson et al., 2011). Loyalty programs are providing financial
benefits (Bolton, Lemon, and Verhoef, 2004) such as discounts, promotional offers and coupons
(Mimouni-Chaabane and Volle, 2010). They also give the opportunity for customers to discover
new products and try some (Ibid.). Moreover, loyalty programs tend to create a sense of community
and personal recognition (Gwinner, Gremler, and Bitner, 1998). They create a feeling of belonging
and are making customer feel important (McMillan and Chavis, 1986). The financial features, the
fact of discovering new products and the felling of belonging increase the customer loyalty to the
program because they perceived a utility of the program (Meyer-Waarden, 2007).

2.3.3 LOYALTY TO THE COMPANY

When customers are joining a loyalty program they become a member of a more or less exclusive
group where they can share same values and can identify themselves with this group (Muniz and
O'Guinn, 2001). Customers who are loyal to a program tend to develop strongest relationship with
the company in question (Ahearne et al., 2005 and Bhattacharya et al., 1995). Moreover, one benefit
of loyalty to program is that customers have more access to information about the company and


they are going to interact more with it (Bolton et al., 2000) and then customers tend to be less
receptive to negative and external information about this company and as a consequence are going
to be more loyal to the company (Ibid.)

2.4 SOCIO-DEMOGRAPHIC FACTORS

The moderating effect of socio-demographic factors on customer loyalty and satisfaction has been
research by academics. The different factors are going to be presented below. Nevertheless, the
effect of them on the expectations and perceived benefits from loyalty programs have not been a
subject of research, which is going to be the aim of this study.
2.4.1 GENDER
It has been shown that there is an important difference in how females and males are shopping
(Kuruvilla et al., 2009; Helgesen and Nesset, 2010). Previous studies seem to indicate that females
tend to be more loyal than males but it not true in every situation because it depends on what they
are buying (Melnyk et al., 2009). According to Patterson (2007), females value more long-term
relationship where there are personal contacts. Melnyk et al (2009) agreed on that, saying that
females are more interested in the personal relationship rather than on the company as an entity.
Schwartz and Rubel (2005) ran a study in 70 different countries and found that men and womens
behaviours are driven by really different values and motives. They pointed out that men are seeking
more than women for social status, prestige, dominance and achievement. In the other hand, women
are valuing more the individual and personal relationships (Baumeister and Sommer, 1997). As
consequences, women are less interested in the elite grade of a loyalty program and the social status
that is conveyed by those kind of status. On the contrary, it more important to be recognized as
individuals and that companies understand they have a name, a birthday and preferences (Melnyk et
al., 2009). It is also less important for them that the personalization of the program is visible to
everyone because they are less concerned about showing off to the others compared to men. (Ibid.)

2.4.2 AGE
According to different authors, age has a moderating effect on customer satisfaction and loyalty
(Baumann, Burton, and Elliott 2005; Homburg and Giering 2001). Those authors found that older
customers are more loyal to a specific brand in the industry of automobile and banking (Ibid.).
However, those results can be tempered by the large-scale study from the American Association of
Retired Persons, which have found that older consumers have the same proportion to switch from a

10


brand to another compare to young people (Moos 2004). Moreover, older consumers have more
free time and so more time to spend on shopping and as consequences are more able to shop at
numerous stores (East et al. 1995; East et al. 2000). The middle-age group has been found to be the
group the more loyal. Wright and Sparks (1999) has shown that the 35-44 age group are the most
loyal which has been supported by McGoldrick and Andre (1997) who are demonstrating that loyal
shopper have more chance to be from the middle-age group.

2.4.3 EDUCATION
Research on the subject tends to show that a higher level of education leads to lower level of loyalty
among customers (Chance and French 1972; Mittal and Kamakura 2001; Murphy 1978). In fact,
people with higher level of education tend to gather more information and usage before making a
decision and as a consequence are more aware of the possible alternatives (Capon and Burke 1980).
Moreover, it has been shown that people with higher level of education tend to gain higher income
(Farley, 1964) and, as it is going to be exposed below, higher income levels tend to be less loyal
customers.

2.4.4 INCOMES
A lot of research have demonstrated that income have a negative impact on customer loyalty (Crask
and Reynolds, 1978; Korgaonkar, Lund, and Price, 1985; Zeithaml 1985). The reason is that
consumers with higher income have fewer shopping restriction and so are considered to be less
loyal to a specific brand compare to those with lower income (Sharir 1974; Zeithaml 1985).
Nevertheless, those findings are not unanimous. In the sector of online services Keaveney and
Parthasarathy (2001) found that consumers that were switching of brand have a lower average
income levels than the one that are loyal.

2.4.5 MARITAL AND PROFESSIONAL STATUS

The relationship between marital status, professional status and loyalty does not appear a lot in the
extant literature. In fact, some researchers have explored the impact of marital and professional
status on customer loyalty but it was always on a secondary level, in a specific industry or specific
cultural context. As consequences, it is hard to draw some tendencies. This study is going to try to
fill that gap.

11

2.5 CONCEPTUAL FRAMEWORK

The research model, presented in the figure 1, is going to give a full view of the study. Sociodemographic factors are divided into gender, age, education, marital, professional status and
incomes. Perceived benefits are divided into monetary saving, exploration, entertainment,
recognition and social. The link going from the demographic factors to perceived benefits, and
loyalty are illustrating the potential influence of them. The rest of the model is presented to
understand what implies loyalty and is going to be used to go further and give some managerial
implications for this study but only the part in the square is going to be studied here.

12

Sociodemographic
factors
Gender
Age
Education
Professional
situation
Marital status
Income

Customers expectation on
benefits in a program

Customers perceived
benefits in a program

Monetary savings
Exploration
Recognition
Social

Monetary savings
Exploration
Recognition
Social

H1

Satisfaction

Customer loyalty
H2

Loyalty to the program

Loyalty to the company

Figure 1. Research model (Authors elaboration)

H1: Socio-demographic factors have an influence on customers expectation of a loyalty program
H2: Socio-demographic factors have an influence on customers loyalty

13

3 METHODOLOGY
This chapter includes an explanation of how the study was conducted in order to solve the research
problem.

3.1 RESEARCH APPROACH

Research approach is how the research problem is going to be solved in this particular thesis. A
research that is qualified to be high quality needs to include two main concepts: relevance and
rigour (Bryman and Bell, 2011). Relevance is composed of different points that need to be reached:
the research need to have managerial and theoretical interesting results, it needs to be achievable in
a certain time and be understandable (Ibid.). The research also needs to be rigorous, meaning that
other researchers could be able to accomplish the study again (Ibid.). Burns (2003) also emphasis
the importance of reliability, valid data, reasonable time and low costs which can be reached thanks
to the right choice of research approach. There are different ways of conducting a study; it is
possible to conduct an inductive or deductive research and choose between a quantitative or
qualitative one (Bryman and Bell, 2011).

3.1.1 INDUCTIVE VS. DEDUCTIVE RESEARCH

The deductive approach occurs when an author is gathering information about existing theories and
researches to make own hypothesis. Those hypotheses are going to be accepted or rejected thanks to
the empirical data that the authors will gather and its comparison to existing theories (Bryman and
Bell, 2011). Beiske (2007) is saying that deductive research approach is the fact of investigating an
existing theory or phenomenon and experiment if that theory is still valid in others situations or
conditions. According to Robson (2011), deductive studies have five sequential stages of progress
to follow. The first stage occurs when the authors are deducting hypothesis from theory. The second
stage is about the operationalization of the hypotheses that need to be breaking down into
measurable items. The hypotheses need to be tested in the third stage and then they are rejected or
accepted in accordance with the results of the study. In the last stage, the theory is modified or not
according to the results. (Ibid.)
On the other hand, inductive research is working on the other way around. An inductive researchs
aim is to generate new theory as a result of observations (Brewerton and Millward, 2001). In the
inductive approach, the research is not based on theory and no hypotheses are formulated at the

14


beginning of it but it is based on learning from experience, resemblances or premises (Lancaster,
2005; Lodico and al, 2010).
According to Bryman and Bell (2011), the deductive approach is more logical than the inductive
one. Moreover, most of the time deductive researches are connected to quantitative data collection
whereas inductive researches are connected to qualitative data collection (Ibid.)
This research is going to be conducted as a deductive approach because the author started to gain
information on the specific subjects of customer loyalty, customer loyalty programs and sociodemographic factors in the existing theory; which are concepts that have been already research a
lot. The information collected constitutes the literature review of this study. Two hypothesises have
been formulated and will be accepted or rejected at the end of the research. The result of this study
is going to fulfil the existing gap of the specific relationship between customer loyalty program and
the influence of socio-demographic factors on it.

3.1.2 QUALITATIVE VS. QUANTITATIVE RESEARCH

It is common that qualitative and quantitative researches are seen as contrasts to each other
(Bryman and Bell, 2011). Qualitative research is preferred when authors want to go deeper into
gathering information about a specific subject (Clayton, 2010). It is usually used when there is not a
lot of existing knowledge about the specific area or when the problem is complicated and authors
want to totally understand it (Bryman and Bell, 2011). Nevertheless, there are drawbacks to those
studies: conclusions made thanks to qualitative studies can not be generalized as they are based on
beliefs and attitudes, it is hard to replicate those studies and there is a chance that respondents do
not answer what they really think but rather what the author wants to hear and so distort the
conclusions (Ibid.).
Quantitative researches are mostly studies that answer questions such as how often or how
much (Amaratunga and al., 2002; Hartman, 2004). The results from quantitative data collection are
numbers that are going to be presented in graphs or in a mathematical way (Clayton, 2010;
Hartman, 2004; Bryman and Bell, 2011). It is why quantitative researches are more structured and
controlled than qualitative one because of its numeric questions (Hartman, 2004). Results of those
studies are measurable and presentable (Ibid.) and that is why it is easier for other researchers to
replicate the study (Bryman and Bell, 2011). According to Hartman (2004), quantitative studies
have three phases: planning, collection and analysis.
The area of customer loyalty and customer loyalty programs has existing theories and studies about
it. Nevertheless, the author has found a gap in this existing knowledge about the impact of

15


demographic factors on the relationship between customer loyalty programs and customer loyalty.
As consequences, this study is going to have a quantitative approach because the author needs to
collect data from a large number of customers from different background to have quantifiable
numbers and then be able to base the study on those numbers that are not available yet.

3.2 RESEARCH DESIGN

The research design is vital for the study as it is the plan researchers decide to use to resolve the
problematic of their studies (Bryman and Bell, 2011; Saunders and al. 2009). The first step is to
formulate the problem and there are three paths to choose from: the exploratory, the descriptive and
the explanatory (Bryman and Bell, 2011).
An exploratory study is when authors are searching for new understanding of a specific area to clarify
the problem they have raised (Saunders and al., 2009). This kind of research occurs when there are few
existing studies on the subject (Krishnaswami and Satyaprasad, 2010) or when a problem has

happened and authors want to research the reasons why (Churchill and Iacobucci, 2005).
A descriptive study is about presenting the proper profile of persons, event or specific situations
(Robson, 2011). Moreover, it helps answering the questions to who, what, when where and why
someone act in a certain way. (Churchill and Iacobucci, 2005). A descriptive research needs to be
based on previous researches and be analytic (Grnmo and Winqvist, 2006). Most of the time,
surveys are used in descriptive research (Burns, 2003).
The last kind of path is the exploratory research, which is when authors are focused on a unique
problem or situation and the aim is to demonstrate a causal relationship between variables (Saunders,
Lewis and Thornhill, 2009).
The purpose of this study is to describe in which way the demographic factors are influencing, or not,
the expectations of customers on their loyalty programs and their loyalty. Moreover, the purpose of the
study is to see if it possible to se if there is some resemblance among category of customers. As
consequence, this study is going to have a descriptive research design. To measure impact it is possible
to use frequencies in order to see how many time a particular thing occurs (Churchill and Iacobucci,

2005) and that is what the author is going to perform in this study to see if there is an influence of
demographic factors on customer loyalty programs and on customer loyalty. Concepts of customer
loyalty and customer loyalty programs are already well researched and are going to be the
foundation for this research.

16

3.3 DATA SOURCES

There are two types of data sources that can be gathered for a research. The differentiation between
them is based on who is collecting the data.
Primary data are collected by the researchers themselves in the aim of responding to a specific
question. This kind of data is time consuming and expensive. Secondary data are collected by
someone else for a purpose but the researcher is going to use them for another purpose or as a
starting point of his/her study. Secondary data are classified into internal and external sources.
Internal sources are when the data are gathered inside a company for example whereas external
sources are collected from outside sources such as Internet or statistics. It is easier and less
expensive to collect secondary data but as they are not collected for the own purpose of the
researcher, it might not fit completely the study or been obsolete. (Bryman and Bell, 2011)
Secondary data such as information about customer loyalty and customer loyalty programs have
been collected as a starting point to this study. Nevertheless, the main source of data is primary
data, gathered by the author, to solve this research problem.

3.4 RESEARCH STRATEGY

No research strategy is better than the other (Bryman and Bell, 2011), but it is important to make
the good choice about the strategy used as it is the essence of the research and will answer the
problematic of the research (Saunders, Lewis and Thornhill, 2009).
According to Yin (2009), there are five types of strategies that can be seen in the table 1:
Experiment, Survey, Archival analysis, History and Case study. The choice between the different
strategies is made according to what the authors are looking for (Ibid.). The second column of the
table 1 shows the question possible that could be researched. The third column is about whether or
not the strategy request control over behavioural events and to finish the last column presents the
strategy focus on contemporary events (Ibid.).

17


Table 1. Research strategy adopted from Yin (2009) p. 8

Archival analysis and history are often used to gather secondary data (Saunders, Lewis and
Thornhill, 2009). As consequence, they were not interesting for this study as this one involves
primary data. Most of the time experiment is linked to qualitative researches and its aim is to
explore the link and the potential change between different variables (Bryman and Bell, 2011). This
researchs aim is to examine the loyalty programs at the moment present and then not to do a
comparison over different situations, as consequence this possibility was excluded.
The two choices left are case study and survey. Yin (2014) is explaining that a case study is preferred
when: (1) the main research question is focusing on how and why, (2) the author has few or no control
over behavioural events and (3) the focus of the study is contemporary. Case studies are often focusing
on just two or three cases for comparatives purposes and it is hard to generalize those studies to an
entire sector for example (Bryman and Bell, 2011). Because of the purpose of this study, which is to
examine the whole sector of retail industry and their loyalty programs and not just to gather some
information about few companies, the case study research has also been excluded.
Surveys are used when the objective is to present the data with numbers and statistics (Bryman and Bell,
2011). Moreover, it does not require control over behavioural events and focus on contemporary events

(Yin, 2009). This description match well the intention for this study

18

3.5 DATA COLLECTION METHOD

There are five most common methods for collecting data: surveys, in-depth interviews,
observations, focus groups and contents analysis (Yin, 2014; Bryman and Bell, 2011).
Questionnaires have been the method chosen for quantitative research. Questionnaires are used to
present a populations attitude and opinion on something thanks to quantitative description of a
sample (Creswell, 2009). It is easier to answer closed questions than open one, as consequences
Bryman and Bell (2011) are recommending to use those first kinds of questions in the
questionnaires as most of the people do not want to answer a question by themselves. Moreover, the
authors are giving more advices on how to run the questionnaire. The design of it need to be easy to
read and to follow and questions need to be totally clear and understandable. A short explanation of
the concepts can be displayed to make it easier for the reader (Ibid.). They also lay emphasis on the
importance of the layout of the questionnaire: the more professional the questionnaire looks, the
more people are going to be disposed to answer the questions. Another way of encouraging people
to respond is to add some rewards or any kind of incitement (Ibid.). Questionnaires allow having
reliable and valid data from a sample of the population within a moderate period of time and with
low costs (Burns, 2003). This is why questionnaire has been chosen for this study and because it
enables to gather a large number of data due to an easy diffusion. The questionnaire in English,
shown in the appendix A, was sent by email, through social medias or has been given by hand to
respondents.

3.6 OPERATIONALIZATION
Operationalization is the process of transforming theory into reality, meaning that the theory
concepts are going to be transformed into measurable concepts (Saunders, Lewis and Thornhill,
2009; Bryman and Bell, 2011). Operationalization is required to be sure that the data collection is done
in a rigorous way (Ibid.) and so ensure the credibility in the outcome of the research (Hartman, 2004).

Hartman (2004) thinks that operationalization should focus on: validity, reliability, usability and
clarity. There are several steps that need to be followed to conduct the operationalization. First, get
the theoretical insights of the concept used in the study (Holme and Krohn, 1997; Hartman, 2004;
Bryman and Bell, 2011) secondly create a conceptual definition of them with the help of previous
research (Hartman, 2004; Bryman and Bell, 2011). The third step is to do an operational definition
(Ibid.), then do an inventory of the potential variables (Holme and Krohn, 1997; Bryman and Bell,
2011), a pre-test is going to be done then and only the accurate variables are going to persist and the
final test is to create the instrument for the collection of data (Bryman and Bell, 2011).

19


Concepts used for this study in the literature review are going to be inserted in the
operationalization table (Table 2, pp.20). Those concepts have been transformed into measures,
which have been explored before by authors in the field of customer loyalty programs and customer
loyalty (Liu, 2007; Minouni-Chaabane and Volle, 2010; Day, 1984; McIlroy and Barnett, 2000)

3.6.1 OPERATIONALIZATION TABLE

Table 2. Operationalization table (Authors elaboration)
Theoretical
concepts

Concept definition

Operational definition

Questions

Customer loyalty
programs

Loyalty program is defined

as a program that allows
consumers to accumulate
free rewards when they make
repeated purchases with a
firm. (Liu, 2007)

A measure that indicates

if customers are
members of a loyalty
program and how often
they are using it

Are you a member of a

customer loyalty program?
How often do you use your
loyalty program?
What kind of customer loyalty
program are you in?

Expectation Perceived benefits

Monetary saving

Expectation Perceived benefits

Exploration

Expectation Perceived benefits

Entertainment

Monetary savings develop

from cash-back offers and
coupons that participants
accumulate while regularly
buying the same brand or
shopping with the same
retailer. (Minouni-Chaabane
and Volle, 2010)

A measure that indicates

the degree of importance
of monetary saving in
the perceived benefits
from loyalty programs

I shop at a lower financial cost

Trying new or innovative

products, satisfying curiosity
about events and promotional
offers, or seeking
information to keep up with
new trends represent
examples of exploratory
behaviours (MinouniChaabane and Volle, 2010)

A measure that indicates

the degree of importance
of exploration in the
perceived benefits from
loyalty programs

I discover new products

Programs also enable

customers to enjoy unique
experiences that they would
not have undertaken
otherwise, because many
organizations offer pleasureproviding incentives, such as

A measure that indicates

the degree of importance
of entertainment in the
perceived benefits from
loyalty programs

I spend less
I save money

I discover products I wouldn't

have discovered otherwise
I try new products

Collecting points is
entertaining
Redeeming points is enjoyable
When I redeem my points, I
feel good at myself

20


getting to drive a Jaguar for a
day or attending an opera.
(Minouni-Chaabane and
Volle, 2010)
Expectation Perceived benefits
Recognition

Expectation Perceived benefits

Social

Loyalty to the
program

Loyalty to the
company

Consumers consequently
may experience recognition
benefits; they may feel like
the firm and frontline
personnel treat them better
than they would treat nonmembers of the program
(Minouni-Chaabane and
Volle, 2010)

A measure that indicates

the degree of importance
of recognition in the
perceived benefits from
loyalty programs

The program enhance

perceptions of social
benefits, such that members
consider themselves part of
an exclusive group of
privileged customers,
identify with that group, and
share values associated with
the brand (MinouniChaabane and Volle, 2010)

A measure that indicates

the degree of importance
of social in the
perceived benefits from
loyalty programs

A company devises loyalty

programs to influence
customers' perceptions of
status, buying habits, and
relationship with the
company and thus encourage
greater customer loyalty
(Kang and al., 2015).

A measure that show to

what extent customers
are loyal to their loyalty
programs

Perceptions of membership
encourage customercompany identification
formation. Customers who
are loyal to a program tend to
develop more embedded
relationships with the
sponsoring company. (Kang
and al., 2015).

A measure that show to

what extent customers
are loyal to their
company

They take better care of me

I'm treated better than other
customers
I'm treated with more respect
I feel I am more distinguished
than other customers
I belong to a community of
people who share the same
values
I feel close to the brand
I feel I share the same values as
the brand

I like this loyalty program

more than other programs.
I have a strong preference for
this loyalty program.
I would recommend this
loyalty program to others.
I say positive things about this
company to my friends.
I would recommend this
company from someone
seeking my advice.
I encourage friends and family
to shop at this company.

3.7 SAMPLING

It is often not realizable to examine a whole population because of time and money; that is why
samples are useful to fix that issue and is used to represent the population (Holme and Solvang,

21


1997). To define a sampling there are three steps to follow. The first one is to determine the
population that need to be studied, the second one is to define the sampling frame and the last one is
to choose the sample size (Bryman and Bell, 2011). The sample size means to determine how much
people have to answer the questionnaire to reach reliability for the answers (Churchill and
Iacobucci, 2005).

3.8 SAMPLING FRAME

A sampling frame is the entire list of the members of a population that have been selected for the
study (Bryman and Bell, 2011). According to Burns (2003), there are two kinds of sampling: the
sample survey and the census survey. The first kind is used when not the whole population but only
a part is used for the study. The second one is when the entire population is used. (Ibid.)
This study is going to be a sample survey. Empirical data was collected from members of loyalty
programs. Data was collected from customers in different ages, genders, from different marital
status, education and incomes in order to examine the potential differences in the benefits they
expect from loyalty programs and the influence of them on their loyalty to the program and the
company. The author decided to not specify any particular sector for this study to be able to have a
bigger sampling and to be able to have reliable samples in each socio-demographic category of
customers (see Appendix B, p57). Moreover, the focus was into the influence of demographic
factors rather than on the kind of loyalty program. The population is customers of BtoC shops and
the sampling frame is customers who are members of loyalty programs. The sample size is chosen
considering previous researches which had around 150-300 answers when examining loyalty
programs, perceived benefits and customer loyalty programs (Bose and Rao, 2011; Kim and al,
2013; Follin and Fransson, 2013). This study has gathered 344 answers in which 271 are valid; as
consequences the sample size have been respected.

3.9 QESTIONNAIRE DESIGN

The design of the questionnaire is really important for the success of the study. The look of the
survey and its organization, if they are well done, are likely to have a positive impact on the
response rate, as said previously (Bryman and Bell, 2011). It is hard to choose the good questions
for a questionnaire

and that is why it is more convenient to use questions or items from already

existing questionnaires or researches. As consequences, items and questions that are relevant for the
purpose of the study should be selected (Burns, 2003).

22


To be able to create a good questionnaire there are things to remember. First, it is important to not
finishing the questionnaire with important questions. Secondly, it is good to numerate the questions
to be more easily followed by the reader (Bryman and Bell, 2011; Burns, 2003). The questionnaire
also needs to be the clearer possible and be lightened (Burns, 2003). For the formulation of the
question, it is important to remember to always keep the question as simple as possible (Ibid.)
Moreover, authors need to decide what kind of question they are going to use. Closed questions,
open-ended questions or scales questions are the choices authors can have to construct their
questionnaires. Closed questions have fixed answer with two or more options, for example yes or
no. The advantage of them is that it is easy to code them for statistical analysis but their weakness is
the superficiality of the answer. Open-ended questions are questions where interviewees are invited
to answer the question with their own words and so give more information than the closed
questions. Open-ended questions are not possible to predict and it is difficult to code them. Scales
questions are forcing respondents to reply to pick one of the alternatives possible on a fixed-scale.
The most important thing to considerate when creating a scale question is to have alternatives that
express the interviewees opinion; answers need to be balanced between a mid-point, for example
neutral, and then the rest of the alternatives, strongly disagree/disagree/agree/strongly agree for
example. (Burns, 2003)
This survey is composed of twelve questions; which are closed questions and scales questions. The
questionnaire is starting with a qualification question about their membership to a loyalty program.
This question is asked to only focus on the people who are part of the sample of this study which
are members of loyalty programs. The author used an online and a paper version of the
questionnaire to be able to reach different group of ages and to send the questionnaire to other
countries.

3.10 DATA ANALYSIS METHOD

3.10.1 PEARSONS CORRELATION
According to Pallant (2001), the correlation analysis is applied to verify if a linear relationship
between two variables is strong or not. Correlation and causality are different because correlation is
not aimed to show if there is one factor that is causing the other. The results can have a positive or
negative correlation; the results are ranging from -1 to 1. If the result is close to 1 then it is possible
to say that the correlation is strong. If the result is 0 then it means that there is no correlation
between the variables. For the analysis, it is possible to use the guidelines providing by Cohen
(1988)

23

Figure 2. Correlation guidelines. (Cohen, 1988)

3.10.2 ANOVA ANALYSIS

Anova analysis is a linear model is comparing the mean of different factors. This tool is only
applicable for numeric data (Howell, 2002). The ANOVA-model is used to determine if there is a
significant difference between the means of three or more groups. Those groups needs to be
independent from each other, it means that the participants of the first group are not part of any
other groups (Ibid). When an Anova test is run it is possible to see that there is no significant
different or that at least two groups are. However, it is impossible to know which group is different
from the other. A post hoc test is necessary to be able to know which group is different. (Ibid)
The author decided to run an ANOVA analysis rather than a regression analysis because the
purpose of the study is not to see if a variable have an impact on the other (regression) but to point
out the differences between the independent groups inside a demographic group.

3.11 QUALITY CRITERIA

3.11.1 RELIABILITY
Reliability is the fact of testing if the concepts and the results are reliable and if it is possible to
replicate the study in another context and still have the same results (Bryman and Bell, 2007).
This study is based on previous research with questions and items that have been tested several
times before (Minouni-Chaabane and Volle, 2010; Kang and al., 2015). As consequences, the sources
used for this study are reliable. The questions from the questionnaire and items have been
controlled by the author. It is possible to run a test to measure the reliability of the data that has
been gathered, the Cronbachs alpha test. The maximum is 1 and if the result of it is between 0.7
and 0.95 then it would be acceptable to say that the results are reliable (Tavakol and Dennick,
2011). If the result is lower than 0.7 can be due to a too low amount of questions or variables that
are too heterogeneous (Ibid.).

24

Figure 3. Reliability Statistics (Source: SPSS)

Reliability Statistics
Cronbach's Alpha

N of Items

,927

47

As seen in Figure 3, Cronbachs alpha for this study was 0.927 which shows a high reliability.
Moreover, this study has a total of 271 valid answers (over 344 answers in total) with a good
distributing over the different demographic group (see Appendix B, p57), which enhance the
validity of this study.

3.11.2 VALIDITY
Validity is when the conclusions of the study are making sense compared to the aim intended at the
beginning of the research. (Bryman and Bell, 2007).
It is possible to raise the content validity by asking someone who have some expertise and
knowledge about the subject which is researching about. The aim is to review the questionnaire
before gathering the data. This is why the questionnaire has been reviewed by an expert in
quantitative research at Linnaeus University. Moreover, the questionnaire has been reviewed during
a focus group to be able to improve the quality of the questionnaire.
Authors have to deduce the information they are using in their studies from actual concept research
by other authors in able to be valid (Bryman and Bell, 2011). Those information need to be relevant
for the subject researched. One way to be able to raise the validity is to operationalize the concepts
(Gray, 2009) In this study, the concepts have been operationalized in the table 2.
External validity is occurring when the study and the results can be generalized and it is possible to
do the research again in another context or tested on another group of the population (Ritchie &
Lewis, 2003; Phillipson, 2013). The operationalization table (p. 21) and the Appendix A (p. 54)
have been displayed to help future researchers to research again this speficic topic in another
context.

25

3.12 SUMMARY
Table 3. Summary table (Authors elaboration)

Research approach

Deductive Quantitative

Research design

Descriptive

Data sources

Primary

Research strategy

Survey

Data collection method

Questionnaire

Data analysis method

Correlation
Anova

Quality criteria

Validity
Reliability

26

4 EMPIRICAL FINDINGS
4.1 PEARSONS CORRELATION
Table 4. Pearsons correlation
Variables

Gender

Age

Education

Marital status

Professional
status

Incomes

Expectation Monetary Savings

Expectation Exploration
Expectation Entertainment
Expectation Recognition
Expectation Social
Loyalty to the program
Loyalty to the company

- 0.15*
- 0.11
- 0.06
0.05
0.12
- 0.14*
- 0.11

0.03
0.26**
0.27**
0.31**
0.13*
0.19**
0.06

0.03
- 0.20**
0.03
- 0.07
- 0.13*
- 0.06
- 0.07

0.06
0.12*
- 0.02
0.02
0.18**
0.17**
0.24**

0.10
- 0.13*
- 0.17**
- 0.29**
- 0.13*
- 0.09
- 0.09

0.05
0.17**
0.28**
0.32**
0.08
0.03
- 0.08

*. Correlation is significant at the 0.05 level (2-tailed).

**. Correlation is significant at the 0.01 level (2-tailed).

It is possible to see that there are some statistically significant correlations between some variable
of the table. Expectation on exploration is the variables that have the more of statistically significant
correlations. The correlations are significant for age, education, marital status, professional status
and incomes.
For monetary savings, gender has a small negative correlation (-0.15). For exploration, age, marital
status and incomes have positive small positive correlations (0.26; 0.12; 0.17) and education and
professional status have negative small correlations (-0.20; 0.13). For entertainment, age and
incomes have small positive correlations (0.27; 0.28) and professional status have a small negative
correlation (-0.17). For recognition, age and incomes have medium positive correlations (0.31;
0.32) and professional status have a small negative correlation (-0.29). For social, age and marital
status have small positive correlations (0.13; 0.18) and education and professional status have small
negative correlations (-0.13 for both). For loyalty to the program, age and marital status have small
positive correlations (0.19; 0.17) and gender has a small positive correlation. For loyalty to the
company, marital status has a positive small positive correlation (0.24).
Those findings are going to be used afterwards to strengthen or not the results of ANOVA.

27

4.2 PRESENTATION OF THE RESULTS H1

H0: Socio-demographic factors do not have an impact on customers expectation of a loyalty
program
H1: Socio-demographic factors have an impact on customers expectation of a loyalty program
4.2.1 GENDER
Table 5. ANOVA H1 Gender
Gender
1. Monetary savings
2. Exploration
3. Entertainment
4. Recognition
5. Social

Respondents
(n=271)
Mean
4.16
2.93
3.10
3.08
2.52

S.D.
1.090
1.313
1.38
1.34
1.32

Min

Max

Anova
F

1
1
1
1
1

5
5
5
5
5

5.996
3.326
.947
.727
3.809

Sig

.015
.069
.331
.395
.052

Table 6. LSD Post-hoc H1 - Gender

Gender
Monetary savings
Exploration
Entertainment
Recognition
Social

Mean
(n=150)
4.31
3.06
3.17
3.02
2.38

Female Mean
(n=121)
3.98
2.77
3.01
3.16
2.69

Male Anova
F
5.996*
3.326
.947
.727
3.809

There was a statistically significant difference between groups as determined by one-way ANOVA
only for monetary saving = (F(1,269) = 5.996, p = .015). A LSD post-hoc test could not been run
because there is only two categories of gender.

4.2.2 AGE
Table 7. ANOVA H1 Age
Age
1. Monetary savings
2. Exploration
3. Entertainment
4. Recognition
5. Social

Respondents
(n=271)
Mean
4.16
2.93
3.10
3.08
2.52

S.D.
1.090
1.313
1.38
1.34
1.32

Min

Max

Anova
F

1
1
1
1
1

5
5
5
5
5

2.651
7.628
9.832
15.531
9.937

Sig

.034
.000
.000
.000
.000

28


Table 8. LSD Post-hoc H1 - Age
Age

24 and under 25
(n=65)
(n=45)

34 35 - 44 45 - 54 55 and older Anova

(n=71)
(n=48)
(n=42)
F

LSD
tests

Monetary savings

4.08

4.24

4.01

4.58

3.98

2.651*

1,3,5<4

Exploration

2.34

2.67

3.37

2.94

3.38

7.628**

1,3,4<5

Entertainment

2.35

2.96

3.65

3.04

3.55

9.832*

1,2,4<3,5

Recognition

2.45

2.46

3.76

2.98

3.69

15.531*

1,2<3

Social

2.08

2.20

3.28

2.27

2.55

9.937*

3>1,2,4,5

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

For all the different expectations there was a statistically significant difference between groups as
determined by one-way ANOVA: Monetary savings = (F(4,266) = 2.651, p = .034); Exploration =
(F(4,266) = 7.628, p = .000); Entertainment = (F(4,266) = 9.832, p = .000); Recognition =
(F(4,266) = 15.531, p = .000) and Social = (F(4,266) = 9.937, p = .000). A LSD post-hoc test
revealed some age group were significally higher or lower than others, in the table in bold.

4.2.3 EDUCATION
Table 9. ANOVA H1 Education
Education
1. Monetary savings
2. Exploration
3. Entertainment
4. Recognition
5. Social

Respondents
(n=271)
Mean
4.16
2.93
3.10
3.08
2.52

S.D.
1.090
1.313
1.388
1.347
1.324

Min

Max

Anova
F

1
1
1
1
1

5
5
5
5
5

3.505
3.896
1.748
1.192
1.590

Sig

.016
.009
.158
.313
.192

Table 10. LSD Post-hoc H1 - Education

Education
Monetary savings
Exploration
Entertainment
Recognition
Social

Grammar
(n=7)
4.57
3.86
3.71
3.50
3.14

High school or Trade/technical

school equivalent
school
(n=31)
(n=26)
4.16
3.54
3.35
3.31
2.97
2.62
3.11
3.48
2.84
2.69

Postgraduated
degree
(n=207)
4.23
2.79
3.16
3.01
2.43

Anova
F
3.505*
3.896**
1.748
1.192
1.590

LSD
tests
1,2,4>3
1,2>4

29


*. The mean difference is significant at the 0.05 level.
**. The mean difference is significant at the 0.01 level.

For monetary savings and exploration there was a statistically significant difference between groups
as determined by one-way ANOVA: Money savings = (F(3,267) = 3.505, p = .016) and Exploration
= (F(3,267) = 3.896, p = .009). A LSD post-hoc test revealed some education group were
significally lower than others, in the table in bold.

4.2.4 MARITAL STATUS

Table 11. ANOVA H1 Marital status
Marital status
1. Monetary savings
2. Exploration
3. Entertainment
4. Recognition
5. Social

Respondents
(n=271)
Mean
4.16
2.93
3.10
3.08
2.52

S.D.
1.090
1.313
1.388
1.347
1.324

Min

Max

Anova
F

1
1
1
1
1

5
5
5
5
5

4.791
7.207
3.093
8.781
6.296

Sig

.003
.000
.028
.000
.000

Table 12. LSD Post-hoc H1 Marital status

Marital status
Monetary savings
Exploration
Entertainment
Recognition
Social

Married
(n=108)
4.24
3.02
3.31
3.32
2.43

Single
(n=97)
3.99
2.52
2.76
2.55
2.24

Divorced/widowed/
Separated
(n=31)
3.84
3.16
3.32
3.60
3.23

Domestic
partner
(n=35)
4.69
3.60
3.20
3.33
2.97

Anova
F
4.791**
7.207**
3.093*
8.781**
6.296**

LSD
tests
4>1,2,3
2<1,3,4
2<1,3
2<1,3,4
1,2<4,3

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

For all the different expectations there was a statistically significant difference between groups as
determined by one-way ANOVA: Monetary savings = (F(3,267) = 4.791, p = .003); Exploration =
(F(3,267) = 7.207, p = .000); Entertainment = (F(3,267) = 3.093, p = .028); Recognition =
(F(3,267) = 8.781, p = .000) and Social = (F(3,267) = 6.296, p = .000). A LSD post-hoc test
revealed some age group were significally higher or lower than others, in the table in bold.

30


4.2.5 PROFESSIONAL STATUS
Table 13. ANOVA H1 Professional status
Professional status
1. Monetary savings
2. Exploration
3. Entertainment
4. Recognition
5. Social

Respondents
(n=271)
Mean
4.16
2.93
3.10
3.08
2.52

S.D.
1.090
1.313
1.388
1.347
1.324

Min

Max

Anova
F

1
1
1
1
1

5
5
5
5
5

2.013
6.023
2.845
6.293
2.700

Sig

.077
.000
.016
.000
.021

Table 14. LSD Post-hoc H1 Professional status

Professional
status
Monetary
savings
Exploration
Entertainment
Recognition
Social

Employed
full-time
(n=137)

Employed
part-time
(n=32)

Unemployed
(n=13)

Retired
(n=10)

Student
(n=70)

Other Anova
(n=9) F

LSD
tests

4.02
3.01
3.32
3.46
2.57

4.50
3.16
2.94
2.88
2.84

3.92
3.31
3.38
3.00
3.00

4.50
4.30
3.40
3.35
3.20

4.20
2.36
2.61
2.43
2.16

4.78
3.33
3.33
2.89
2.00

2,6>1
5<1,2,3,4,6
5<1
5<1,4
5<1,2,3,4

2.013
6.023**
2.845*
6.293**
2.700*

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

For all the different expectations, except for monetary savings there was a statistically significant
difference between groups as determined by one-way ANOVA: Exploration = (F(5,265) =
6.023, p = .000); Entertainment = (F(5,265) = 2.845, p = .016); Recognition = (F(5,265) =
6.293, p = .000) and Social = (F(5,265) = 2.700, p = .021). A LSD post-hoc test revealed some age
group were significally higher or lower than others, in the table in bold.

4.2.6 INCOMES
Table 15. ANOVA H1 Incomes
Incomes
1. Monetary savings
2. Exploration
3. Entertainment
4. Recognition
5. Social

Respondents
(n=271)
Mean
4.16
2.93
3.10
3.08
2.52

S.D.
1.090
1.313
1.388
1.347
1.324

Min

Max

Anova
F

1
1
1
1
1

5
5
5
5
5

.507
6.639
11.404
20.975
4.109

Sig

.603
.002
.000
.000
.017

31


Table 16. LSD Post-hoc H1 Incomes
>1500
(n=91)
4.12
2.54
2.62
2.38
2.26

Incomes
Monetary savings
Exploration
Entertainment
Recognition
Social

1500 - 2499 >2500

(n=61)
(n=118)
4.08
4.24
3.25
3.06
3.02
3.50
3.48
3.41
2.89
2.53

Anova
F
.507
6.639**
11.404**
20.975**
4.109*

LSD
tests
1<2,3
3>1,2
1<2,3
1<2

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

For all the different expectations, except for monetary savings there was a statistically significant
difference between groups as determined by one-way ANOVA: Exploration = (F(5,265) =
6.023, p = .000); Entertainment = (F(5,265) = 2.845, p = .016); Recognition = (F(5,265) =
6.293, p = .000) and Social = (F(5,265) = 2.700, p = .021). A LSD post-hoc test revealed some age
group were significally higher or lower than others, in the table in bold.

4.3 CUSTOMER LOYALTY

H0: Socio-demographic factors do not have an impact on customer loyalty

H2: Socio-demographic factors have an impact on customer loyalty

4.3.1 GENDER
Table 17. ANOVA H2 Gender
Gender
1. Loyalty
program

to

2. Loyalty
company

to

Sig

Max

Anova
F

5.545

.019

3.243

.073

Respondents
(n=271)
Mean
S.D.

Min

3.55

.838

3.49

.057

the
the

Table 18. LSD Post-hoc H2 Gender

Gender

Mean
Female
(n=150)

Mean Male Anova

(n=121)
F

1. Loyalty to the
program
3.66

3.42

5.545*

2. Loyalty to the
company
3.58

3.37

3.243

32


*. The mean difference is significant at the 0.05 level.
**. The mean difference is significant at the 0.01 level.

There was a statistically significant difference between groups as determined by one-way ANOVA
only for Loyalty to the program = (F(1,269) = 5.545, p = .019). A LSD post-hoc test could not been
run because there is only two categories of gender.

4.3.2 AGE
Table 19. ANOVA H2 Age
Age
1. Loyalty
program

to

2. Loyalty
company

to

Min

Max

Anova
F

.838

2.824

.025

.057

1.073

.370

Respondents
(n=271)
Mean

S.D.

3.55
3.49

Sig

the
the

Table 20. LSD Post-hoc H2 Age

Age

24
and
55
and
under
25 - 34 35 - 44 45 - 54 older
Anova
(n=65)
(n=45)
(n=71)
(n=48)
(n=42)
F

1. Loyalty to the
program
3.29

3.59

3.54

3.67

3.79

2.824*

2. Loyalty to the
company
3.36

3.59

3.51

3.36

3.67

1.073

LSD
tests
1<4,5

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

There was a statistically significant difference between groups as determined by one-way ANOVA
only for Loyalty to the program = (F(4,266) = 2.824, p = .025). A LSD post-hoc test revealed the
age group of 24 and under, in the table in bold, was significally lower than the group of 45 54
(3.67 .889) and 55 and older (3.79 .993).

4.3.3 EDUCATION
Table 21. ANOVA H2 Education
Education

Respondents
(n=271)
Mean

1. Loyalty to the
program
3.55

Max

Anova
F

Sig

Min

2.505

.060

S.D.
.838

33


2. Loyalty to the
company
3.49

.057

3.684

.013

Table 22. LSD Post-hoc H2 Education

High school
or
Trade/technical
equivalent school
(n=31)
(n=26)

Postgraduated
degree
(n=207)

Anova
F

LSD
tests

1. Loyalty to the
program
4.29

3.58

3.32

3.55

2.505

1>2,3,4

2. Loyalty to the
company
4.29

3.62

3.08

3.49

3.684*

3<1,2<4

Grammar
school
(n=7)

Education

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

There was not a statistically significant difference between groups as determined by one-way
ANOVA for Loyalty to the program (F(3,267) = 2.505, p = .060) except for the category of
Grammar school.
There was a statistically significant difference between groups as determined by one-way ANOVA
for Loyalty to the company (F(3,267) = 2.505, p = .060). Loyalty to the program = (F(3,267) =
3.684, p = .013). A LSD post-hoc test revealed the group of Grammar school was significally
higher than the group of Trade/Technical school (3.08 1.060) and Postgraduated degree (3.49
.935).
Moreover, the group of Trade/Technical school was significally lower than Grammar School (4.29
.678), High School (3.62 .744) and Postgraduated degree (3.49 .935).

4.3.4 MARITAL STATUS

Table 23. ANOVA H2 Marital status
Marital status

1. Loyalty
program

to

2. Loyalty
company

to

Min

Max

Anova
F

.838

3.743

.012

.057

5.670

.001

Respondents
(n=271)
Mean

S.D.

3.55
3.49

Sig

the
the

34

Table 24. LSD Post-hoc H2 Marital status

Single
(n=97)

Divorced/widowed/
Separated
(n=31)

Domestic
partner
(n=35)

Anova
F

LSD
tests

1. Loyalty to the
program
3.48

3.44

3.71

3.93

3.743*

4>1,2

2. Loyalty to the
company
3.32

3.43

3.63

4.03

5.670**

4>1,2

Marital status

Married
(n=108)

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

There was a statistically significant difference between groups as determined by one-way ANOVA
for Loyalty to the program and Loyalty to the company.
Loyalty to the program = (F(3,267) = 3.743, p = .012) and Loyalty to the company = (F(3,267) =
5.670, p = .001). A LSD post-hoc test revealed the group of Domestic partner (3.93 .828/ 4.03
.887) was significally higher than the group of married for both kind of loyalty (3.48 .866/ 3.32
.973) and Single (3.44 .8.16/ 3.43 .882).

4.3.5 PROFESSIONAL STATUS

Table 25. ANOVA H2 Professional status
Respondents
Professional status (n=271)
Mean
S.D.

Min

Max

Anova
F

Sig

1. Loyalty to the
program
3.55

.838

2.316

.044

2. Loyalty to the
company
3.49

.057

3.141

.009

Table 26. LSD Post-hoc H2 Professional status

Professional
status

Employed
full-time
(n=137)

1. Loyalty to the
program
3.64
2. Loyalty to the
company
3.63

Employed
part-time
(n=32)

Unemployed
(n=13)

Retired
(n=10)

Student
(n=70)

Other
(n=9)

Anova
F

LSD
tests

3.39

3.33

4.17

3.40

3.52

2.316*

4>1,2,3

3.30

3.141*
*

4>1>2,3

3.13

3.10

4.07

3.39

*. The mean difference is significant at the 0.05 level.

**. The mean difference is significant at the 0.01 level.

35


There was a statistically significant difference between groups as determined by one-way ANOVA
for Loyalty to the program and Loyalty to the company.
Loyalty to the program = (F(5,265) = 2.316, p = .044) and Loyalty to the company = (F(5,265) =
3.141, p = .009). A LSD post-hoc test revealed the professional group of Retired (4.17 .689/ 4.07
.872) was significally higher for both kind of loyalty than the group of Employed full time (3.64
.928/ 3.63 .961), employed of part-time (3.39 .640/ 3.13 1.015) and Unemployed (3.33
.680/ 3.10 .762)

4.3.6 INCOMES
Table 27. ANOVA H2 Incomes status
Incomes

Respondents
(n=271)
Mean

Min

Max

Anova
F

Sig

S.D.

1. Loyalty to the
program
3.55

.838

.602

.549

2. Loyalty to the
company
3.49

.057

.962

.384

Table 28. LSD Post-hoc H2 Incomes

1500 - 2499

>2500
(n=61)
(n=118)

Anova
F

1. Loyalty to the
program
3.49

3.64

3.56

.602

2. Loyalty to the
company
3.57

3.54

3.40

.962

Incomes

>1500
(n=91)

LSD
tests

There were not statistically significant differences between groups as determined by one-way
ANOVA for Loyalty to the program and Loyalty to the company concerning Incomes.

5 ANALYSIS
5.1 CUSTOMERS EXPECTATIONS ABOUT LOYALTY PROGRAMS
As seen in the theoretical framework, there were not a lot of theory or studies about the influence on
socio-demographic factors on the expectations of customers concerning their loyalty programs.

36


The only factor that has been studied is the difference among gender about recognition and social
aspect of loyalty programs (Schwartz and Rubel, 2005).

5.1.1 GENDER
Schwartz and Rubel (2005) have pointed out that men are seeking more than women for social
status, prestige, dominance and achievement. In fact, women are less interested in the elite grade of
a loyalty program and the social status that is conveyed by those kinds of status.
It is possible to support the statement made by Schwartz and Rubel (2005) with the results of this
study. In fact, it is possible to see that men attach more importance to the recognition and social
benefits than women (3.16 vs. 3.02 and 2.69 vs. 2.38). Recognition is the second benefits the most
important for men after monetary savings, which show its importance for them. However, it is
possible to qualify the results for social benefits: in fact, they are the last benefit in term of
importance. As consequences, men value more social benefits than women but those benefits are
secondary.

Moreover, this study is showing that there is a significally difference between women and men for
the monetary savings expectation. Women are valuing more this benefits than men, on average
monetary savings has an importance of 4.31 over 5 compare to 3.98 for men. Women have an
average higher on the expectations of Exploration (3.06 vs. 2.77) and Entertainment (3.17 vs. 3.01).

5.1.2 AGE
Age is significant for all the expectations of customers. One of the most significant differences can
be seen for the age group of 24 and under and the following age group, from 25 to 34. In fact, those
age groups are reacting similarly to the different benefit they can expect from their customer loyalty
programs. They have the lower rates in every category of expectation, except monetary savings,
which are important for them. As consequence, they are not expecting to have any benefits from a
loyalty program except having some discounts or some specials prices.
The age group from 35 to 44 are more sensitive to recognition and social benefits than other age
groups, respectively 3.76 and 3.28 over 5. Nevertheless, comparatively those benefits are not the
one they put first in term of expectations from a loyalty program; which is monetary savings (4.01
over 5).
Monetary savings is a really important expectation no matter which age the respondents are but this
expectation has the highest rate for the age group of 45 54 years old.

37


The last group has a high interest in exploration, they expect from a loyalty program to discover and
try new products they would not have used otherwise.

5.1.3 EDUCATION
Education is not significant for several expectations: entertainment, recognition and social.
Monetary savings has a high rate in every category of education groups (between 3.54 and 4.57
over 5). The group who is expecting the more from monetary savings benefits is the group, which
has the lower level of education, Grammar School. The highest level of education, postgraduated
level, is not the category that has the lowest expectation in monetary savings; in fact they come just
after the last category with a rate of 4.23. The lowest rate is for those from trade and technical
school.
For the expectations of exploration, the rate is inversely proportional to the level of education. The
higher the level of education is, the lower the exploration expectations are. The respondent with a
postgraduated diploma have an expectation of exploration of 2.79 over 5, those from trade and
technical school have a rate of 3.31, those from high school have a rate of 3.35 and those from
grammar school have a 3.86 rate.

5.1.4 MARITAL STATUS

Marital status is significant for all the expectation from customers concerning their loyalty
programs.
Single people have the lowest rate in every category of expectations except monetary savings. In
fact, they tend to think that exploration (2.52), entertainment (2.76), recognition (2.55) and social
(2.24) are not important.
The highest rate for monetary savings and exploration is made by the domestic partners category
(3.60) and the highest rate for entertainment, recognition and social are made by the category of
divorced, separated and widowed (respectively 3.32, 3.60 and 3.23).

5.1.5 PROFESSIONAL STATUS

Professional status is, as marital status, significant for all of the expectations from customers.
The most interesting category of profession is the students, which have the lowest rate in almost
every kind of expectation. In fact, they do not consider exploration (2.36), entertainment (2.61),
recognition (2.43) and social (2.16) important in the benefits they are expecting from their loyalty

38


programs. Retired people have the highest rate on several expectations. They attach importance
especially to exploration (4.30) and also entertainment (3.40) and social (3.20).

5.1.6 INCOMES
Incomes are significant for every expectation except monetary savings. The category of people who
are earning less than 1500 by months are the category that have the lowest rate for every
significant expectations. They do not think that exploration, entertainment, recognition and social
are important in term of benefits they can expect from a customer loyalty program.
On the other hand, the group of people who are earning between 1500 and 2499 have the highest
rate for exploration (3.25), recognition (3.48) and social (2.89).

5.1.7 SUMMARY
It is possible to conclude that demographic factors are significant when it comes to the different
expectations of customers.

Table 29. Summary of significant correlation H1 (Authors elaboration)

Gender
Monetary savings
Exploration
Entertainment
Recognition
Social

Age

Education Marital status

X
X
X
X

Professional
status

Incomes

X
X
X
X
X

X
X
X

Table 30. Summary of significant differences H1 (Authors elaboration)

Gender

Age

Education Marital status

Exploration

Entertainment

Recognition

Social

Monetary savings

Professional status Incomes

Age and marital status are significant for every category of expectations. However, gender cannot
be strengthened by the correlation analysis for age and marital status for monetary savings and it is
the same for entertainment and recognition with marital status.

39


Professional and incomes are significant for every category except monetary savings. It is possible
to strengthen this statement, except for incomes and social, by looking at the correlation table.
Education and Gender are the demographic factors, which have less significance over customers
expectations. Education is significant for monetary savings and exploration. Nevertheless, the
correlation analysis is showing a different view, by showing that there is a correlation between
education and exploration and social. Gender is only significant for monetary savings, which is
strengened by the correlation analysis.

5.2 CUSTOMER LOYALTY

5.2.1 GENDER
According to previous studies, it has been shown that females tend to be more loyal than male
(Kuruvilla et al., 2009; Helgesen and Nesset, 2010), even if it is not true in every situation as it
depends also on what they are buying (Melnyk et al., 2009). In this study, it is possible to see that
females are more loyal to their loyalty program (3.66 over 5 vs. 3.42 for men) and to the company
(3.58 over 5 vs. 3.37) than men.

5.2.2 AGE
According to previous research it has been demonstrated that age has a moderating effect on loyalty
(Baumann, Burton, and Elliott 2005; Homburg and Giering 2001). Authors do not have the same
opinion about older consumers: some authors are saying that they are more loyal when it comes to
automobile and banking (Ibid.) and some others show that old consumers tend to not be loyal
because they have more free time (East et al. 1995; East et al. 2000). This study is demonstrating
that older consumers are here the most loyal group to the loyalty program (3.79) and to the
company (3.67).
Wright and Sparks (1999) and McGoldrick and Andre (1997) have shown that the 35-44 age group
are the most loyal. This study is not confirming this statement. In fact, the results are showing that
the age group of 35-44 years old is the second less loyal group after the group of 24 years old
concerning loyalty to programs and to company.

5.2.3 EDUCATION
Previous researches tend to show that a higher level of education leads to a lower level of loyalty
(Chance and French 1972; Mittal and Kamakura 2001; Murphy 1978) because they tend to gather

40


more information before making a decision (Capon and Burke 1980). This study is showing the
opposite of the previous statement. In fact, the lowest category of education, grammar school, is the
one that is the most loyal for both kind of loyalty (4.29 over 5 for both of them). The next most
loyal category is High School (3.58 and 3.62) and then comes the Postgraduated degrees category
with a rate of 3.55 and 3.49. Those rate are still high on the scale of 1 to 5 so those three category
tend to be loyal to their loyalty programs and companies.

5.2.4 MARITAL STATUS

Marital status is significant for the two kinds of loyalty. Domestic partners category has the highest
rate of loyalty for the program and for the company, with rates of 3.93 over 5 for the loyalty to the
program and 4.03 for the loyalty to the company.
Married people are the less loyal concerning their loyalty to the company (3.32) and single people
are showing the lowest rate of loyalty for their programs (3.44). However, those results are still high
if compared to the scale.

5.2.5 PROFESSIONAL STATUS

Professional status is also significant for the two kinds of loyalty. Retired people are showing a
significant difference compared to the other categories. They have the highest rate of loyalty for
their programs and for their company. This is not validating the statement that older consumers,
here retired people, are less loyal (East et al. 1995; East et al. 2000). Unemployed people are
showing the less loyalty to their programs and to the companies (3.33 over 5 and 3.10).

5.2.6 INCOMES
A lot of researches have demonstrated that income have a negative impact on customer loyalty
(Crask and Reynolds 1978; Korgaonkar, Lund, and Price 1985; Zeithaml 1985). Customers who are
earning more have fewer shopping restriction and so tend to switch of brand easier (Sharir 1974;
Zeithaml 1985). However, this statement is not unanimous (Keaveney and Parthasarathy, 2001)
This study is showing that there is no statistically significant difference between the different
incomes category when it comes to loyalty. The different means by themselves are showing a
contrasted point of view. In fact, concerning the loyalty to the program, the highest income category
is not the most unloyal; they have a rate of 3.56; which is showing a tendency of being loyal.

41


Concerning the loyalty to the company, they are the less loyal compared to the others categories.
However, this statement can be qualified as they still have a rate of 3.40; which is showing a
tendency of being loyal rather than the opposite.

5.2.7 SUMMARY
It is possible to conclude that demographic factors, at the exception of incomes, are significant
when it comes to the loyalty to their customer loyalty programs or to their companies.

Table 31. Summary of significant correlations H2 (Authors elaboration)

Loyalty to the program

Loyalty to the company

Gender

Age

Marital
status
X
X

Education

Professional
status

Incomes

Table 32. Summary of significant differences H2 (Authors elaboration)

Loyalty to the program
Loyalty to the company

Gender
X

Age
X

Education

Marital status
X

Professional status
X

Incomes

Gender, age and education are significant all for only one kind of loyalty: gender and age for the
loyalty of the program and education is significant for the loyalty to the company. The correlation
analysis is only strengthening that gender and age for the loyalty to the program. There is no
correlation between loyalty to the company and education.
Marital and professional statuses are both significant for the two kind of loyalty. The analysis of
correlation is strengthening the relation between marital status and the two kind of loyalty but it
does not show any correlation for professional status.

42

6 CONCLUSION
The aim of this study was to determine if socio-demographic factors are influencing the
expectations and loyalty of customers and in which way. Gender, age, education, marital status,
professional status and income have been tested to see if there were some significant differences
between each category concerning customers expectation and loyalty to their loyalty programs and
companies.
As a conclusion it is possible to say that all those socio-demographic factors have an influence on at
least one of the expectations of customers concerning their loyalty programs.
Age and marital status are the factors that are influencing every expectation of customers and
professional status and incomes for every expectation except money savings. As consequences,
those factors are really important for a company to look at when they start a loyalty program or
when they try to improve it. In fact, for those factors, customers are not expecting the same and it is
important to be aware of those differences to increase customers satisfaction.
Concerning customers loyalty not all of the factors have an influence. Incomes are different from
the others because it did not influence customers loyalty to the program and to the company. The
others factors are important to take into consideration, as they influence at least of one the loyalty.

7 DISCUSSION
7.1 LIMITATION

Two limitations are time and the number of respondents. Concerning the number of responses, it
could be said that 271 answers is too low to make general conclusions. This number could have
been better if time was not a limitation for this research.
The sample size of this study was really broad to be able to gather a large number of respondents on
every demographic category, this could be seen as a limitation because the sample size could have
been narrowed to increase the reliability and validity of the results.

43

7.2 MANAGERIAL IMPLICATIONS

The results of this study are showing the importance of the personalization of the loyalty programs.
All the customers are not reacting or expecting the same concerning their loyalty programs and are
more or less loyal according to their socio-demographic factors. The advantage of loyalty programs
is that it is possible to obtain those information when the customer is joining. They can then create
some promotional campaigns that are focusing on different expectations in accordance with the
inclination of each category. An efficient Customer Relationship Management is necessary to be
able to use all the information gathered by the use of a loyalty program.
Moreover, in the Appendix C (p. 58) the author has shown the difference between the expectations
of the customers compared to what they really have. This is interesting to take an interest in those
differences because it helps managers to know where to work on firstly. Here, is it possible to see
that in general customers are satisfied, they have what they were expecting or even more. However,
there is one expectation where customers are not satisfied, 61% of the respondent have shown that
they their expectation for shopping at a lower cost is higher than what they really have. To reduce
this dissatisfaction it could be interesting for managers to increase the number of campaigns with a
focus of promoting discounts or reductions thanks to their loyalty programs.

7.3 FUTURE RESEARCH

The cultural context has not been approach in this study. It is possible that culture has an impact on
the expectations of customers. Future researches could focus on the cultural impact on the
expectations of customers and see for example the differences between developed countries and
developing countries.
In addition, rewards have also not been the subject of this thesis even if it is one of the expectations
of customers. For the future research, it would be good to analyse the influence of the sociodemographic factors on the expectation of type of rewards and the frequency of them and if it
impacts their loyalty.
Moreover, this thesis was not focusing on one kind of loyalty program but rather on loyalty
programs in general. In fact, in Appendix D and E (p. 59), the author has displayed the results of
customers expectations and loyalty according to which sector they have a loyalty program in. As
conclusion, it is possible to say that for certain kind of loyalty programs, the expectations are not
the same and it is the same for loyalty. As consequence, results could be different for impact of
demographic factors if the focus was just on one kind of loyalty programs. Future researches should

44


focus in a particular sector to examine the influence of socio-demographic factors for those
particular loyalty programs and also on customer loyalty. Those researches could increase the
knowledge of managers in those specific areas and could let them take better initiatives and actions.

45

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Appendix
Appendix A Questionnaire

54

55

56

57

Appendix B - Presentation of the demographic factors (SPSS)

Frequency Pourcentage
Gender
Male
Female
Total
Age
24 and under
25-34
35-44
45-54
55 and over
Total
Education
Grammar school
High school or equivalent
Trade/Technical school
Post graduated degree
Total
Marital status
Married
Single
Divorced/widowed/Separated
Domestic partner
Total
Professional status
Employed full-time
Employed part-time
Unemployed
Retired
Student
Other
Total
Incomes
<1500
1500 - 2499
>2500
Total

170
174
344

49,4
50,6
100

101
71
77
50
45
344

29,4
20,6
22,4
14,5
13,1
100

12
49
32
251
344

3,5
14,2
9,3
73
100

120
147
33
44
344

34,9
42,7
9,6
12,8
100

158
34
22
14
101
15
344

45,9
9,9
6,4
4,1
29,4
4,4
100

132
78
134
344

38,4
22,7
39
100

58

Appendix C Satisfaction (Authors elaboration)

59

Appendix D Customers expectation according to their loyalty programs (Authors

elaboration)

Appendix E Customer loyalty according to their loyalty programs (Authors

elaboration)

60