Understanding the influence of customer relationship management strategies in the UK gambling sector : social exchange and relationship marketing perspectives

The success of relationship-based loyalty programs across many industries, for example retailing, airline and tourism industries (Sharp & Sharp, 1997; Wright & Sparks, 1999; Martín, Román & Espino, 2011; Ou et al., 2011; du Toit & Cant, 2012; Evanschitzky et al., 2012), has resulted in a number gambling businesses implementing their own in-house loyalty programs to encourage loyal customers and ensure repeat business (Wardle et al., 2014; Forrest, McHale & Wardle, 2015). While much academic attention has been given to loyalty programs in general, limited behavioural analysis of loyalty programs among gambling members and their influence has been carried out. Due to the potential scope for business irresponsibility and consumer harm, this thesis, exploratory in nature, aims to critically explore the extent to which gambling firms make use of loyalty programs and how these programs are utilised to influence customer engagement and behaviour. To gain an in-depth understanding and express the complex phenomena of loyalty programs, and their influence on behaviour, this study uses an exploratory qualitative approach to interpret the experiential meanings from individuals directly involved with loyalty programs. Primary data is based on two focus group discussions with 16 customers selected through a snowballing sampling method. Concurrently, this study also analyses data collected through individual in-depth interviews from 14 customers and 12 employees ranging from Customer Experience Managers to Cashiers recruited via purposive sampling. For this study, five major high street gambling firms from the North West of England in a dyadic relationship with customers were involved. Participants were selected based on their knowledge, experience and, their direct involvement with the research focus. Using NVivo 11 software, data was analysed using thematic analysis. To help theoretically underpin this study, emphasis is placed upon two concepts that are mutually enriching: Social Exchange and Relationship Marketing theories. The two theories play an important role delineating loyalty program member’s and their behaviour. Where relationship marketing theory views mutual benefits within relational exchanges, it does not furnish how these relationships achieve mutualism or indeed how these relationships are sustained (Berry, 1983; Grönroos, 1991; Taleghani, Gilaninia & Mousavian, 2011). Social exchange theory on the other hand, explains that, relationships are entrenched in the processes of social exchanges of resources, rewards and costs. It is through these reciprocated exchanges that relationships are enabled or constrained (Thibaut & Kelley, 1959; Blau, 1964; Emerson, 1976; Kelley & Thibaut, 1978; Cropanzano & Mitchell, 2005). Thus, Social exchange theory and Relationship Marketing Theory co-exist, each focusing on elements that the other neglects. This study reveals that loyalty programs deployed under the relationship marketing concept as defined by various scholars are not recognised and understood by customers. Moreover, although most gambling firms adopt relationship-marketing strategies, in effect, they do not actually operationalise their programs responsibly. Rather, gambling firms widely practice transactional marketing, proclaimed the most effective in achieving organisational objectives, though the same cannot be argued for their consumers. From a customer perspective, the findings also indicate repeated social interactions, unparalleled expectations from the relationship and, mutual benefits occurring by means of the loyalty programs. Another significant finding is the scale of irresponsible marketing approaches utilised by employees of the gambling companies, the lack of transparency in the process, inconsistent and persistent use of loyalty program arrangements between gambling firms and customers without fully acknowledging the potential risks. Consequently, the current research contributes to advancing our knowledge around insights between loyalty program practices and the potential antecedents and consequences, as well as shed further light upon the multi-dimensional conceptualisation of the relational exchange construct and social exchange theory. This thesis also provides stakeholders with empirical experiential evidence, both positive and negative that can be used to help implement more socially responsible loyalty program strategies in the future