Earning Luckiness: The Effect of Active Loyalty Program Membership on Consumer Predictions of Randomly-Determined Marketing Outcomes

Prior research on loyalty programs has examined how structural and motivational features affect consumer behavior within program confines (Bagchi and Li 2011; Dréze and Nunes 2009; Kivetz 2005; Kivetz and Simonson 2002, 2003; Kivetz, Urminsky, and Zheng 2006; Lewis 2004). We add to this work by showing that loyalty program membership has psychological effects extending beyond the context of the program itself. Our series of studies demonstrates that consumers display a “lucky loyalty” effect, such that active loyalty program members feel they have a greater subjective likelihood of experiencing positive randomly-determined outcomes offered by the firm administering the loyalty program, even when these outcomes are unconnected to the loyalty program. We propose that status earned in a loyalty program through past purchases can lead to a relative illusion of control compared to non-members of the program or program members who lack elite status. This illusion of control, in turn, leads consumers to believe that randomly-determined positive firm-related outcomes are more likely to happen to them than to other customers of the firm. Why should this be the case?