Casino Loyalty: The Influence of Loyalty Program,Switching Costs,and Trust

Abstract

Customer loyalty has become a strategic goal to increase brand value and profitability. This study develops and tests a model of loyalty to understand the relative effects of loyalty program benefits (as positive barriers) and switching costs (as negative barriers) on emotional commitment and loyalty behaviors in the casino context. The findings showed that trust, perceived switching cost, and emotional commitment to the casino are more likely to influence relational or emotional outcomes such as word of mouth and voluntary partnership whereas the loyalty program is more likely to influence transactional outcomes such as repeat visitation and time spent in the casino. The emotional commitment served as a partial mediator in the model. The study has theoretical implications for understanding the loyalty process and practical implications for improving loyalty program effectiveness.

Keywords

frequency program gaming loyalty switching costs trust commitment

Get full access to this article

View all access options for this article.

References

Baloglu

(2002). Dimensions of customer loyalty: Separating friends from well wishers. Cornell Hotel and Restaurant Administration Quarterly, 43(1), 47-59.

Barsky

Nash

(2002). Evoking emotion: Affective keys to hotel loyalty. Cornell Hotel and Restaurant Administration Quarterly, 43(1), 39-46.

Bendapudi

Berry

L. L.

(1997). Customers’ motivations for maintaining relationships with service providers. Journal of Retailing, 73, 15-37.

Berry

(2013). Bulking up: The 2013 Colloquy Loyalty Census. Retrieved from http://www.colloquy.com/files/2013-COLLOQUY-Census-Talk-White-Paper.pdf

Bowen

J. T.

Shoemaker

(1998). Loyalty: A strategic commitment. Cornell Hotel and Restaurant Administration Quarterly, 39(1), 12-25.

Bridson

Evans

Hickman

(2008). Assessing the relationship between loyalty program attributes, store satisfaction and store loyalty. Journal of Retailing and Consumer Services, 15, 364-374.

Browne

Cudeck

(1993). Alternative ways of assessing model fit. In Bollen

K. A.

Long

J. S.

(Eds.), Testing structural equation models (pp. 136-62). Newbury Park, CA: Sage.

Burnham

T. A.

Frels

J. K.

Mahajan

(2003). Consumer switching costs: A typology, antecedents, and consequences. Journal of the Academy of Marketing Science, 31, 109-126.

Byrne

(1998). Structural equation modeling with Lisrel, Prelis, and Simplis: Basic concepts, applications, and programming. Mahwah, NJ: Lawrence Erlbaum.

10.

Dekay

Toh

R. S.

Raven

(2009). Loyalty programs: Airlines outdo hotels. Cornell Hospitality Quarterly, 50, 371-382.

11.

Fullerton

(2011). Creating advocates: The roles of satisfaction, trust and commitment. Journal of Retailing and Consumer Services, 18, 92-100.

12.

Geyskens

Steenkamp

J. E. M.

Scheer

L. K.

Kumar

(1996). The effects of trust and interdependence on relationship commitment: A trans-Atlantic study. International Journal of Research in Marketing, 13, 303-317.

13.

Grewal

Cote

J. A.

Baumgartner

(2004). Multicollinearity and measurement error in structural equation models. Marketing Science, 23, 519-529.

14.

Hair

J. E.

Black

W. C.

Babin

B. J.

Anderson

R. E.

(2010). Multivariate data analysis (7th ed.). Upper Saddle River, NJ: Prentice Hall.

15.

Han

Back

K. J.

Kim

Y. H.

(2011). A multidimensional scale of switching barriers in the full-service restaurant industry. Cornell Hospitality Quarterly, 52, 54-63.

16.

Han

Jeong

(2013). Multi-dimensions of patrons’ emotional experiences in upscale restaurants and their role in loyalty formation: Emotion scale improvement. International Journal of Hospitality Management, 32, 59-70.

17.

Henderson

C. M.

Beck

J. T.

Palmatier

R. W.

(2011). Review of the theoretical underpinnings of loyalty programs. Journal of Consumer Psychology, 21, 256-276.

18.

Hendler

Latour

K. A.

(2008). A qualitative analysis of slot clubs as drivers of casino loyalty. Cornell Hospitality Quarterly, 49, 105-121.

19.

Heskett

J. L.

Jones

T. O.

Loveman

G. W.

Sasser

J. W. E.

Schlesinger

L. A.

(2008). Putting the service-profit chain to work. Harvard Business Review, 86(7), 118-129.

20.

Bentler

P. M.

(1995). Evaluating model fit. In Hoyle

R. H.

(Ed.), Structural equation modeling: Concepts, issues, and applications (pp. 76-99). Thousand Oaks, CA: Sage.

21.

H. S.

Huang

Chen

(2010). Do reward programs truly build loyalty for lodging industry? International Journal of Hospitality Management, 29, 128-135.

22.

Jain

Singh

S. S.

(2002). Customer lifetime value research in marketing: A review and future directions. Journal of Interactive Marketing, 16(2), 34-46.

23.

Jones

M. A.

Mothersbaugh

D. L.

Beatty

S. E.

(2000). Switching barriers and repurchase intentions in services. Journal of Retailing, 76, 259-274.

24.

Jones

M. A.

Reynolds

K. E.

Mothersbaugh

D. L.

Beatty

S. E.

(2007). The positive and negative effects of switching costs on relational outcomes. Journal of Service Research, 9, 335-355.

25.

Jöreskog

K. G.

Sörbom

(1996). LISREL 8 user’s reference guide. Chicago, IL: Scientific Software International.

26.

Kumar

Aksoy

Donkers

Venkatesan

Wiesel

Tillmanns

(2010). Undervalued or overvalued customers: Capturing total customer engagement value. Journal of Service Research, 13, 297-310.

27.

Lacey

(2009). Limited influence of loyalty program membership on relational outcomes. Journal of Consumer Marketing, 26, 392-402.

28.

Las Vegas Convention and Visitor Authority. (2012). Clark County residents study 2012. Retrieved from http://www.lvcva.com/includes/content/images/media/docs/2012-Clark_County_Resident_Study.pdf

29.

Lee

J.-S.

Back

K.-J.

(2010). Examining antecedents and consequences of brand personality in the upper-upscale business hotel segment. Journal of Travel & Tourism Marketing, 27, 132-145.

30.

Leenheer

Van Heerde

H. J.

Bijmolt

T. H.

Smidts

(2007). Do loyalty programs really enhance behavioral loyalty? An empirical analysis accounting for self-selecting members. International Journal of Research in Marketing, 24, 31-47.

31.

Petrick

J. F.

(2008). Reexamining the dimensionality of brand loyalty: A case of the cruise industry. Journal of Travel & Tourism Marketing, 25, 68-85.

32.

Lucas

A. F.

Kilby

Santos

(2002). Assessing the profitability of premium players. Cornell Hotel and Restaurant Administration Quarterly, 43(4), 65-78.

33.

Malhotra

(1999). Marketing research: An applied orientation (3rd ed.). Upper Saddle River, NJ: Prentice Hall.

34.

Mattila

A. S.

(2001). Emotional bonding and restaurant loyalty. Cornell Hotel and Restaurant Administration Quarterly, 42(6), 73-79.

35.

Mattila

A. S.

(2006). How affective commitment boosts guest loyalty (and promotes frequent-guest programs). Cornell Hotel and Restaurant Administration Quarterly, 47, 174-181.

36.

McCall

Voorhees

(2010). The drivers of loyalty program success. An organizing framework and research agenda. Cornell Hospitality Quarterly, 51, 35-52.

37.

Melancon

J. P.

Noble

S. M.

Noble

C. H.

(2011). Managing rewards to enhance relational worth. Journal of the Academy of Marketing Science, 39, 341-362.

38.

Meyer-Waarden

Benavent

(2009). Grocery retail loyalty program effects: Self-selection or purchase behavior change? Journal of the Academy of Marketing Science, 37, 345-358.

39.

Morgan

Hunt

S. D.

(1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20-38.

40.

Palmer

Mahoney

(2005). Winners and losers: Segmenting a casino loyalty programme. International Gambling Studies, 5, 271-287.

41.

Paul

Hennig-Thurau

Gremler

D. D.

Gwinner

K. P.

Wiertz

(2009). Toward a theory of repeat purchase drivers for consumer services. Journal of the Academy of Marketing Science, 37, 215-237.

42.

Reichheld

F. P.

Sasser

W. E.

Jr. (1990). Zero defections: Quality comes to services, Harvard Business Review, 68(5), 105-111.

43.

Reisinger

Turner

(1998). Asian and Western cultural differences: The new challenge for tourism marketplaces. Journal of International Hospitality, Leisure & Tourism Management, 1(3), 21-35.

44.

Shoemaker

Kapoor

(2008). Relationship and loyalty marketing. In Oh

Pizam

(Eds.), Handbook of hospitality marketing management (pp. 119-152). Burlington, MA: Routledge.

45.

Shoemaker

Lewis

R. C.

(1999). Customer loyalty: The future of hospitality marketing. International Journal of Hospitality Management, 18, 345-370.

46.

Smith

J. B.

Barclay

D. W.

(1997). The effects of organizational differences and trust on the effectiveness of selling partner relationships. Journal of Marketing, 61(1), 3-21.

47.

Sui

J. J.

Baloglu

(2003). The role of emotional commitment in relationship marketing: An empirical investigation of a loyalty model for casinos. Journal of Hospitality & Tourism Research, 27, 470-489.

48.

Tanford

(2013). The impact of tier level on attitudinal and behavioral loyalty of hotel reward program members. International Journal of Hospitality Management, 34, 285-294.

49.

Tanford

Baloglu

(2013). Applying the loyalty matrix to evaluate casino loyalty programs. Cornell Hospitality Quarterly, 54, 333-346.

50.

Tanford

Raab

Kim

Y. S.

(2011). The influence of reward program membership and commitment on hotel loyalty. Journal of Hospitality & Tourism Research, 35, 279-307.

51.

Tanford

Raab

Kim

Y. S.

(2013). A model of hotel defection at the purchasing stage. Journal of Hospitality Marketing & Management, 22, 805-831.

52.

Vázquez-Carrasco

Foxall

G. R.

(2006). Positive vs. negative switching barriers: The influence of service consumers’ need for variety. Journal of Consumer Behaviour, 5, 367-379.

53.

Wilkins

Merrilees

Herington

(2010). The determinants of loyalty in hotels. Journal of Hospitality Marketing & Management, 19, 1-21.

54.

Wirtz

Mattila

A. S.

Lwin

M. O.

(2007). How effective are loyalty reward programs in driving share of wallet? Journal of Service Research, 9, 327-334.

55.

Busser

J. A.

(2008). The influential attributes that affect resident slot gamblers repatronage intentions and willingness to recommend casinos to others. Journal of Hospitality & Leisure Marketing, 16, 343-367.