The impact of reward personalisation on frequent flyer programmes' perceived value and loyalty

Purpose – The purpose of this research is to contribute to a better theoretical and empirical knowledge about the way frequent flyer programmes influence customer behaviour. It aims to describe the relationships between purchase orientations and personalized rewards on customers' perceived programme value and subsequent loyalty. Design/methodology/approach – The research uses self-determination theory (SDT) and purchase orientations to classify types of rewards in terms of their effect on perceived programme value and loyalty. Scales are developed through exploratory and confirmatory factor analysis. To validate the hypotheses, surveys are realized in a major international airline. Structural equation modelling confirms the research model. Findings – Perceived value and loyalty vary according to purchase orientation, in support of the SDT. Intrinsic (extrinsic) rewards motivate customers to act to obtain a benefit within (apart from) the target of their purchase orientation and influences loyalty positively (have low impact on loyalty). Research limitations/implications – Further testing of reward types, in(ex)trinsic motivation, SDT, across multiple contexts is necessary for validity enhancement. Practical implications – Differentiation through tailored (non-)monetary rewards is possible in markets marked by strong competition to appeal to different segments. Originality/value – This is one of the pioneer articles in the use of SDT in marketing research. The development of scales which focus on reward types and the moderating impact of purchase orientations on frequent flyer programmes' perceived value and loyalty is another contribution