Evaluation of Perceived Benefits of Loyalty Program and their Influence on Satisfaction with the Program (The Case Study of Ethiopian Airlines)
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Date
2014-06
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Addis Ababa University
Abstract
The purpose of this study was to evaluate perceived benefits of frequent flyer program and their influence on member’s satisfaction, delivered through the perspectives of both silver and gold tier member passengers of Ethiopian airlines. To this effect, the study has used the scale developed by Nic S Terblanche, 2005 on the three dimensions of perceived benefits namely Acknowledgement, Convenience and Exploration to measure member’s perception towards the frequent flyer program of Ethiopian Airlines, ShebaMiles. Total samples of 380 respondents were selected with a probabilistic simple random sampling technique. According to the findings of the study, the analysis result of member’s perception indicates that among the three perceived benefit dimensions, Acknowledgement which incorporates recognition and social benefits shows the highest mean score followed by convenience and Exploration. The study has also found out that Gold members give the same weight for the perceived benefit dimension of Exploration as does Silver members but different weight was given for Acknowledgement and Convenience dimensions of perceived benefits. The Pearson correlation result indicates that all perceived benefit dimensions were significantly and positively correlated with satisfaction of members with the program. Generally, Acknowledgement dimension has shown a statistically significant contribution on member’s satisfaction, Exploration demonstrates the second highest positive relationship, and convenience reveals the least result of relationship with satisfaction of members with the program.
Hence, the airline is better to strengthen the handling of the Sheba miles members with respect to the reduction of decision-making anxiety and ease of use of the loyalty program also should get much attention next to acknowledgment. The Sheba mile programs needs to allow to members to visit and experience exceptional places which they would not have experienced and thereby makes them to have the exposure of new things as the exploration attribute have a positive correlation with the satisfaction of members with the program. Moreover several issue associated with the limitation inherent in this study requires further research consideration. For instance, the interactions between perceived benefits and the other variables such as Word-of-mouth and the significance of monetary versus nonmonetary benefits of loyalty programs could provide valuable insight for future research.
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Perceived benefit, frequent flyer program, members’ satisfaction