The Reinforcing Effects Between Flying as a Core Service and Partners Within a Local Loyalty Programme

This paper investigates how multi-vendor loyalty programs influence customer behavior, specifically within the context of an airline's program and its various partners. It examines cross-buying activities between flying (the core service) and partners across different categories, such as other airlines, car hire, hotels, and less complementary services like credit cards and fuel vendors. Utilizing a generalized additive model (GAM) analysis on data from the Voyager loyalty program, the research tests hypotheses related to the impact of partner category fit, bonus awards, and membership duration on core service usage and cross-buying. The findings reveal complex and varied relationships between partner categories and core service engagement, highlighting that less complementary partners exhibit a strong positive and nearly linear relationship with core service usage. The study also explores the effect of bonus miles and membership duration on customer loyalty and purchasing patterns across the different partner types.