Can Economic Bonus Programs Jeopardize Service Relationships?

Hennig-Thurau T, Paul M

Abstract
Research findings on the impact of economic bonus programs onservice relationships are contradictory. While some studies find positive effectsof economic bonus programs on customer's relational behavior, otherstudies demonstrate negative effects. Building on self-determination theory,Dholakia (J Market Res 43(2):109-120, 2006) points at a possible explanationfor these conflicting results, arguing that economic marketing programs havenegative effects on self-determined customers when the program is perceivedas controlling by them. By testing the effect of four different kinds of economicbonus programs on loyalty in an experimental setting using a nationwiderepresentative sample of 768 participants, this research is the first thatprovides empirical evidence that economic bonus programs can indeedendanger service relationships by reducing customer's self-determination.Implications of our findings for the abundance of economic bonus programsoffered to service customers these days are highlighted.

Keywords
Bonus programs; Customer loyalty; Self-determination; Intrinsic motivation; Extrinsic motivation