The effect of relational benefits in loyalty programmes: Evidence from Chinese milk formula customer clubs

Although the value of relational benefits has been recognised in customer relationship management, the impact of these benefits on loyalty behaviours is yet to be investigated in the context of loyalty clubs. Little is known why some loyalty programmes outperform others. By using both qualitative and quantitative research approaches, this research developed and estimated a conceptual model that describes the interaction of key relational benefits and their contributions to customer loyalty in a set of milk formula customer clubs in China. Data were collected from 300 Chinese infant milk formula buyers, including both customer club members and nonmembers. This study confirms that the customer‐confidence benefits and identity‐related benefits precede other loyalty rewards and strengthen other loyalty incentives in a loyalty programme. The economic benefits and information‐sharing benefits play a mediating role and contribute directly to customer loyalty. The findings of this research help better understand the mechanism behind loyalty behaviours in customer clubs.