Ko Woo Li

Reward programs offer rewards, and with further progression toward these rewards, customers become more motivated. This acceleration is called a reward gradient. This study proposes prospect theory as the underlying mechanism of the reward gradient and suggests a nonlinear relationship between motivation and progress level (low vs. middle vs. high). A numerical simulation based on the mathematical model and experiments were conducted to see how the expected values of rewards can change as progress is made, and how this further affects motivation. The results identified a stronger acceleration in the expected value after reaching a middle point of the reward achievement, which is due to a larger deviation in the loss value than the gain value. These findings can help restaurants and tourism companies implement a dynamic perspective in reward programs for enhancing customers’ reward gradient behaviors.

Customers make more of an effort the closer they are to earning rewards. Our study examined how this effect might be moderated with differently described rewards when temporal distance differs. For benefits of varying descriptions, we applied the temporal construal theory. We used a moderated mediation analysis to examine the influence of preferred description on the motivation of customers' goal-gradient behavior. The results show that participants who made a significant progress toward earning a reward prefer concrete descriptions of the reward to abstract descriptions. Furthermore, the targeting of appropriate construals in reward descriptions increases participants' motivation to make additional purchases.