Investigating the structural relationship between loyalty programme service quality, satisfaction and loyalty for retail loyalty programmes: evidence from Malaysia

Purpose – Retaining and cultivating customer loyalty has become increasingly important for loyalty programme providers and retailers due to the highly competitive environment. The purpose of this paper is to develop and test a model investigating how loyalty programme service quality (LPSQual) enhances programme perceived value and programme satisfaction to win loyalty among cardholders. Design/methodology/approach – Quota sampling technique, using a self‐administered questionnaire survey, was used with a total of 400 respondents who are card holders of loyalty programmes from departments and superstores in the capital of Malaysia. Findings – It is found that all the loyalty programme service attributes (policy, reward, tangibility, information usefulness, courteousness/helpfulness and communication quality), with the exception of personalization, have a significant positive influence on perceived value. The positive relationship between perceived value‐programme loyalty and programme satisfaction‐programme loyalty was also significant. The result also suggests that programme satisfaction affects store loyalty only through programme loyalty. Practical implications – The results highlight the crucial role of loyalty programme service attributes in influencing value, satisfaction and loyalty among card holders of a loyalty programme. Originality/value – This paper seems to be the first in investigating the impacts of LPSQual on value, satisfaction and loyalty in departments and superstores, particularly in the Malaysia context.