Announcement

Winner of the 2017 Jan-Benedict E.M. Steenkamp Award for Long-Term Impact

The European Marketing Academy (EMAC) and the International Journal of Research in Marketing (IJRM) are pleased to announce the winner of the 2017 Jan-Benedict E.M. Steenkamp Award for Long-Term Impact:

Jorna Leenheer, Harald J. van Heerde, Tammo H.A. Bijmolt and Ale Smidts. Do loyalty programs really enhance behavioral loyalty? An empirical analysis accounting for self-selecting members. IJRM, Volume 24(1), Pages 31-47.

Abstract:

One of the pressing issues in marketing is whether loyalty programs really enhance behavioral loyalty. Loyalty program members may have a much higher share-of-wallet at the firm with the loyalty program than non-members have, but this does not necessarily imply that loyalty programs are effective. Loyal customers may select themselves to become members in order to benefit from the program. Since this implies that program membership is endogenous, we estimate models for both the membership decision (using instrumental variables) and for the effect of membership on share-of-wallet, our measure of behavioral loyalty. We use panel data from a representative sample of Dutch households who report their loyalty program memberships for all seven loyalty programs in grocery retailing as well as their expenditures at each of the 20 major supermarket chains. We find a small positive yet significant effect of loyalty program membership on share-of-wallet. This effect is seven times smaller than is suggested by a naïve model that ignores the endogeneity of program membership. The predictive validity of the proposed model is much better than for the naïve model. Our results show that creating loyalty program membership is a crucial step to enhance share-of wallet, and we provide guidelines on how to achieve this.

This award is given annually to papers published in IJRM in recognition of their exceptional contributions in academic marketing research by demonstrating long-term impact.

A 4-member Award Committee, formed by the IJRM editor (Roland T. Rust) managed the nomination and selection procedure this year. The committee is comprised of: Russell Winer (New York University) (Chairperson), Christian Homburg (University of Mannheim), Mario Pandelaere (Ghent University and Virginia Tech), and Andrew Stephen (University of Oxford).

Statement from the Award Committee on the Winner of the 2017 Jan-Benedict Steenkamp Award for Long-term Impact

This year’s award was reviewed by a committee of four Senior Editors representing the three key domains of Consumer Behavior, Strategy, and Modeling. The committee thanks everyone for voting and commenting on the eligible papers. As usual, two rounds of voting by the IJRM Board members were followed by committee deliberation.

The procedure for this award is as follows:

1. Nominations are invited from EMAC and IJRM Editorial board members. Past winners, papers authored or co-authored by Jan-Benedict Steenkamp, and by any of the current IJRM Editors are not eligible. This year, we received nominations for 57 papers.
2. The nominated papers comprise the first ballot from which the IJRM editorial board could vote for up to 5 papers; self-voting is not allowed. The ballot includes links to each paper and its cumulative ISI citations and Google Scholar citations up to January 1 of the current year.
3. The resulting ten papers that receive the most votes in the first round make up the ballot for the final round of voting in which the editorial board can choose only one (1) paper. This year, due to a tie, 11 papers progressed to the final round.
4. After receiving the votes, the committee then deliberates on the winning paper guided by the following criteria: (1) the votes received from the IJRM Editorial Board, (2) its ISI and Google Scholar citations, and (3) its quality, as assessed by the committee’s in-depth reading. Given these criteria, there is room to deviate from the mere vote tallying, but the deviation needs to be clearly argued, and rather exceptional. There can also be two winners in exceptional cases (not more than once every 3 years on average).

Based on the votes, the citations and the committee’s quality assessment, the winner is "Do loyalty programs really enhance behavioral loyalty? An empirical analysis accounting for self-selecting members,” by Jorna Leenheer, Harald J. van Heerde, Tammo H.A. Bijmolt, and Ale Smidts (Volume 24, Issue 1, 31-47).

One of the most interesting research questions in marketing that has significant managerial implications is whether loyalty programs work. As the authors note, prior empirical work in this area has not taken into consideration the fact that loyalty programs may attract a disproportionate number of buyers who are already loyal thus making such programs appear to be more attractive than they really are. Using loyalty program data from seven Dutch supermarket chains, the authors develop and estimate a model to estimate the effectiveness of the programs while simultaneously controlling for endogeneity of the decision to join.

The authors do this by developing model using instrumental variables that influence the decision to join a loyalty program but which are unrelated to household expenditures here defined as share-of-wallet for a particular chain. The variables are measured from a survey conducted among members of a consumer panel that has data pertaining to their loyalty card memberships at the supermarket chains. The most important result is the finding that while membership in a loyalty program significantly affects share-of-wallet, the magnitude of the effect is seven times less than would be estimated with a model without controlling for endogeneity of membership choice. The paper was that unanimous choice by the committee for the combination of the importance of the problem examined, the creativity of the modeling, the combination of several interesting datasets, and the impact the work has had on other marketing scholars.

We congratulate the authors for receiving this award.

Christian Homburg (University of Mannheim, Germany)
Mario Pandelaere (Ghent University, Belgium and Virginia Tech, USA)
Andrew Stephen (University of Oxford, UK)
Russell S. Winer, Chairperson (New York University, USA)

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