Understanding the Adoption Timing of a Loyalty Program among Business Customers: The Role of Marketing and Social Influence

Loyalty programs (LPs) are a popular instrument to build profitable relationships, and achieving a successful LP launch critically depends on a firm’s ability to obtain the deepest penetration and fastest spread into the business market. In this study, we propose an integrated conceptual framework to understand the simultaneous effect of marketing activities, social influence, and business customer characteristics on the time to adopt a LP. The framework is tested in a B2B setting using Bayesian spatial techniques, and the results show that (1) sales efforts shorten LP adoption time, (2) social effects are present both at the internal (same zip) and external (adjacent zips) levels, and (3) business customers show different predispositions to adopt a LP (individual heterogeneity).