Indulgent Redemption: Examining Whether and When Customers Redeem Rewards to Treat Themselves to Premium Purchases

Povzetek

Redeeming rewards is at the heart of loyalty programs. Whereas research has shown that customers change their buying behavior before and after redemption, little is known about decision-making during the redemption occasion itself. A large-scale field study and two experiments reveal that redeeming loyalty rewards, as opposed to using cash, entices customers to break their regular buying patterns and uptrade to higher-priced purchases. Redemption occasions, therefore, do not only reflect a cost position for companies but opportunities for upselling. Experimental results show that the effect is driven by customers’ desire to treat themselves to premium items they would not normally afford, which we term indulgent redemption. This effect is strongest when redeeming customers are alone; by contrast, reward redemption has little marginal impact on uptrading during social consumption. While both indulgent redemption and social consumption independently encourage higher-priced purchases, their interaction is antagonistic.

O predavateljici

Prof. Dr. Lena Steinhoff is Chaired Professor of Business Administration, esp. Marketing and Digital Transformation, at Paderborn University’s Faculty of Business Administration and Economics. Her research interest is relationship marketing. Specifically, Lena Steinhoff explores the intended as well as the unintended effects of various relationship marketing instruments and derives implications for their optimal deployment. Digital transformation’s manifold opportunities and challenges for customer relationships represents a focus of her work. 

Her research has appeared in the Journal of Marketing, Journal of the Academy of Marketing Science, Journal of Retailing, Journal of Service Research, Journal of International Marketing, Journal of Business Research, Journal of Service Management, Industrial Marketing Management, Journal of Service Management Research, and the Marketing Science Institute (MSI) Working Paper Series. Together with Robert W. Palmatier, Lena Steinhoff has authored the book “Relationship Marketing in the Digital Age”, published 2019 at Routledge Taylor & Francis. Lena Steinhoff serves on the editorial review board for the Journal of the Academy of Marketing Science as well as the Journal of Public Policy & Marketing and as an ad-hoc reviewer for, among others, the Journal of Marketing, Journal of Retailing, Journal of Service Research, Journal of Business Research, and Journal of Interactive Marketing.

Lena Steinhoff is the recipient of the 2021 SERVSIG Emerging Service Scholar Award. Beyond, her research has been awarded the 2021 Davidson Award of the Journal of Retailing, the Best in Conference Award of the 2022 Summer Academic Conference of the American Marketing Association, and the 2016 Robert D. Buzzell MSI Best Paper Award of the Marketing Science Institute, among others. Forthermore, she received the 2020 Best Reviewer Award of the Journal of the Academy of Marketing Science. In 2025, Lena Steinhoff was appointed as a member of the North Rhine-Westphalian Academy of Sciences and Arts.

Gostiteljica na Ekonomski fakulteti je red. prof. dr. Tanja Dmitrović.

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