In his insightful research talk on June 27 at WU's Marketing Department, Tammo Bijmolt elaborated on one of his recent research projects that examines promotions and demotions of business-to-business customers in a multi-tier loyalty program and effects on share of wallet.

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

We thank Prof. Bijmolt for sharing his insights with our department. Check out the agenda to find out more about the Research Seminar Series and our upcoming speakers. The seminars are open to all WU faculties and students.