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The Role of Relational Reward Benefits for Developing the Non-Financial Value of a Customer to an Organization: Structural Equation Modeling Approach

Gadjah Mada International Journal of Business

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Field Value
 
Title The Role of Relational Reward Benefits for Developing the Non-Financial Value of a Customer to an Organization: Structural Equation Modeling Approach
 
Creator Kristiani, Enny
Sumarwan, Ujang
Yuliati, Lilik Noor
Saefuddin, Asep
 
Description Research on the customer value to an organization has been widely explored, yet most studies only determined on the financial value based on the customer’s purchasing behavior. The value of customers beyond their purchasing behavior –defined as the relational worth - has not been commonly captured yet. This non-financial value is one of the drivers in retaining customers, hence it becomes a crucial factor in preserving the profitability of the organization. For this reason, this paper aims to examine the customer non-financial valuations of a loyalty reward program. The scope of the study covered a reward program involving consumer exertions in the context of a Frequent Flyer Program (FFP) offered by an airline in Indonesia. The hypotheses are empirically tested with a sample of FFP members conducted through an online survey (n=475). The data were statistically analyzed using structural equation modeling (SEM) as a first order construct. Results indicate that the perceived social rewards lead to an affective and normative commitment as well as consumers’ satisfaction, while the economic reward did not have an effect on developing affective bonds with members for long-term relationships. The relational benefit offered through the FFP creates affectively and normatively committed members who produce relational behaviors, in terms of WOM, immunity, openness and acquiescence of the members to the airline. Furthermore, the FFP members produced social behaviors toward the airline when they felt satisfied with their relational exchanges.          
 
Publisher Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada
 
Contributor —
 
Date 2014-10-30
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://jurnal.ugm.ac.id/gamaijb/article/view/5354
10.22146/gamaijb.5354
 
Source Gadjah Mada International Journal of Business; Vol 16, No 2 (2014): May-August; 111-142
2338-7238
1411-1128
 
Language eng
 
Relation https://jurnal.ugm.ac.id/gamaijb/article/view/5354/4372