Research on the Impact of Loyalty Program Information Transparency on Customer Participation Intention with Digital Information

Abstract

As market competition intensifies, companies recognize the value of attracting customers to participate in activities and loyalty programs (LPs) that encourage repeat purchases and maintain customer loyalty. Literature on LP design explores the positive impact of program structure and rewards on the acquisition of customers. However, research is lacking on the role of LP information transparency on customer participation intention. This study uses 280 college students in China as the survey object to explore the influence of LP information transparency on willingness to participate in such programs. Using experimental design methods, the authors verify whether the type of merchant and channel customers select affect willingness to participate when customers redeem rewards. This study also explains the internal psychological mechanism of information transparency, merchant and channel types, and customer participation intention from the perspective of perceptual psychological distance in construal level theory (CLT) and the elaboration likelihood model (ELM). Both information visibility and accessibility have a positive impact on customer intention to participate in LPs. When a customer redeems a reward from a LP operator, information visibility has a more positive impact on willingness to participate than redeeming a reward from an alliance partner. Moreover, when a customer redeems a reward from online channels, the positive impact of information accessibility on willingness to participate is greater than redeeming from offline channels. Under the influence of multiple psychological distance effects, the synergistic effect of merchant type and channel type is not significant in the relationship between information transparency and willingness to participate in LPs. This article will provide design strategies and management suggestions for retail managers to attract customers to participate in LPs.