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Feeling Superior
The Impact of Loyalty Program Structures on Consumer’s Perceptions of Status

Authors:

Xavier Drèze
Joseph C. Nunes

Publisher:

Journal of Consumer Research
2009, 35 (6), 890-905

Abstract:

We study status as it pertains to loyalty programs, investigating the impact of the number and size of tiers on consumers’ perceptions of status. We find increasing the number of elites in the top tier dilutes perceptions of status while adding a subordinate tier enhances status. Tiers below the second tier do not impact those at the top, but can make those in the tier immediately above feel more elite. Given the choice between alternative programs, those who do not qualify for status prefer hierarchies with multiple tiers. Finally, we show that status-laden labels (gold and silver) on their own signal an increasingly selective hierarchy.