Abstract: Multi-Tier Loyalty Programs (MTLPs) have become a popular marketing instrument to develop customer-rm relationships. Within an MTLP, customers can go up or down in tier level over time, and such promotions and demotions may aect their future purchase behavior. We develop a framework to explain whether and how the tier structure in a MTLP aect customer’s share of wallet (SOW). A unique business-to-business dataset with information on over 20,000 MTLP members and marketing eorts of the rm in Germany from 2009 to 2017 is used for the analysis. We utilize a panel regression model with Tobit-style lower and upper boundaries. Our analysis is inspired by the Regression Discontinuity Design approach and we dene the impact of the MTLP through a step function for the lagged dependent variable as an independent variable. In the analysis, we examine whether these eects depend on customer characteristics, and control for the eects of other potential drivers of share of wallet such as marketing activities. We contribute to the literature on drivers of customer loyalty of B2B markets, where customer behavior and drivers thereof has been shown to be substantially dierent from B2C markets. Overall, this study oers new insights into the temporal eects of demotions and promotions of B2B customers in MTLPs and has important implications for theory and practice.

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