Does Status Always Matter? The Effect of Brand Concept on the Effectiveness of Hierarchical and Linear Structures of Loyalty Programs

Academics and managers tend to assert that hierarchical loyalty program structures, which classify customers into tiers on the basis of spending levels or other purchase activities, are more effective than linear structures without tiers, in which all members belong to the same strata. The present article questions this claim by examining the moderating role of brand concept. Building on the congruence principle, two studies—a survey involving various empirical contexts and an experiment conducted in the banking sector—reveal that the effect of perceived congruence between the program structure and the brand concept is asymmetrical. For symbolic brands, hierarchical loyalty program structures appear more congruent, which increases loyalty intentions. In contrast, for functional brands, both hierarchical and linear loyalty program structures seem equally congruent. The findings enrich the general debate about loyalty program designs and provide practical guidance to brand and loyalty program managers.