Syed Md. Hasib AHSAN, Md.

ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /

Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206 195

Print ISSN: 2288-4637 / Online ISSN 2288-4645

doi:10.13106/jafeb.2022.vol9.no6.0195

The Impact of Loyalty Program on Customer Retention:

Empirical Evidence from Bangladesh

Syed Md. Hasib AHSAN1, Md. ALAUDDIN2, Mohammad Manjur ALAM3,

Adiba NAZIA4, Tasnim ISLAM5

Received: March 10, 2022  Revised: May 21, 2022  Accepted: May 30, 2022

Abstract
The purpose of this paper is to examine how loyalty programs designed by retail stores affect customer retention. The present study is one of
the few empirical studies finding the role of different loyalty programs that help to build customer retention. The study also seeks to explore
the moderation role of customer perceived value between intrinsic motivation - customer retention and extrinsic motivation - customer
retention. The researchers employed a quantitative research design to collect data from the 350 respondents who purchased goods from
the retail chain/departmental stores in Bangladesh. The collected data are then analyzed using structural equation modeling. The result of
their findings indicated that the size of the organizational reward has a positive effect on intrinsic and extrinsic motivation; further extrinsic
motivation has a significant relation to customer retention. Surprisingly, no support was found for the positive impact of intrinsic motivation
on customer retention. Customer perceived value (CPV) is critical as a moderator in building client retention, which improves the positive
association between extrinsic motivation and customer retention. CPV, on the other hand, was found to mitigate the negative link between
intrinsic motivation and client retention.

Keywords: Customer Retention, Loyalty Program, Intrinsic Motivation, Extrinsic Motivation, Customer Perceived Value, Retail Chain

JEL Classification Code: M30, M31, M37

1. Introduction dependent on the organization’s ability to retain customers

so that they may become loyal to the organization. Loyalty
The retail chain industry is considered a profitable programs play a crucial role in ensuring customer retention.
business around the world, and its success is mainly Managers have realized the importance of loyalty programs
because of the increase in a firm’s sales volume and market
share (Zeithaml et al., 1996; Fook & Dastane, 2021). As a
First Author. Assistant Professor, Department of Business
1

Administration, International Islamic University Chittagong,

result, most companies in today’s world encourage loyalty
Bangladesh. Email: [email protected] programs, and they are gaining acceptance worldwide (Yi
[1] Ph.D. Student, Department of Marketing, City University of Hong
2
& Jeon., 2003; Anderson & Srinivasan, 2003). The retail
Kong, Hong Kong [2] Assistant Professor, Department of Business chain industry is one of the most popular industries in
Administration, International Islamic University Chittagong,
Bangladesh. Email: [email protected] Bangladesh. Nationwide there are many retail chain stores,
Corresponding Author. Assistant Professor, Department of
3 and they are encouraging their clients to purchase from
Computer Science and Engineering, International Islamic University them by providing a variety of loyalty programs. Customer
Chittagong, Bangladesh [Postal Address: Chattagram-4318, loyalty programs help any retail organization to get success.
Bangladesh] Email: [email protected]
Lecturer, Faculty of Business Studies, Premier University Chittagong,
4 Besides, it also helps develop a strong relationship between
Bangladesh. Email: [email protected] buyers and sellers. Different authors have defined loyalty in
Assistant Professor, Department of Business Administration,
5
diverse ways. The definition of (Knox & Denison, 2004) is
Southern University Bangladesh, Bangladesh.
Email: [email protected]
very well known to the academicians and practitioners, and
he stated: “the consumer’s inclination to patronize a given
© Copyright: The Author(s)
This is an Open Access article distributed under the terms of the Creative Commons Attribution store or chain of stores over time” (p. 34). Customer loyalty
Non-Commercial License (https://creativecommons.org/licenses/by-nc/4.0/) which permits
unrestricted non-commercial use, distribution, and reproduction in any medium, provided the
programs are critical strategies for any company seeking to
original work is properly cited. build customer loyalty (Lewis, 2004, p. 281) defined “loyalty
 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
196 Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206

programs that base rewards on cumulative chasing are an 2. Conceptual Framework and
explicit attempt to enhance retention that encourages repeat Hypothesis Development
buying and thereby improves retention rates by providing
incentives for customers to chase more frequently and in This study explains multiple marketing theories based on
larger volumes.” LP, which are customer-centered, and managers of firms have
Most retail organizations cannot imagine using loyalty developed their emphasis on building better relationships
programs to entice their customers because of their ability with clients for customer retention.
to attract a large amount of attention (Bloemer & de Ruyter,
1998; Frenzen & Nakamoto, 1993). The programs are 2.1.  Loyalty Program
based on cumulative purchasing to reward the clients. By
offering various incentives to buy more frequently and in LP is a promotional strategy driven by companies
larger quantities, loyalty programs help to inspire repeat to attract buyers. According to (Rayer, 1996), “LP is a
purchases and advance the rate of retention (Lewis, 2004). mechanism for identifying and rewarding loyal customers,”
Intense competition in the retail sector leads most companies generally by giving them points for the quantity they consume
to create loyal customers. These clients enable organizations (p. 8). It is seen in numerous cases; for example, buyers are
to generate more revenues over time by reducing operating given some specific points based on their purchase or some
costs and frequently buying (Zakaria et al., 2014; Dholakia, extra points if they have a membership card which is usually
2006). Recent research revealed that the recent economic offered at the point of sale (Wright & Sparks, 1999). Loyalty
crisis had augmented the competition level for the retailing programs play a vital role in encouraging customers to repeat
industry. Consequently, many organizations are now trying purchases (Rizan et al., 2020). Companies offer diverse
to give more attention to their current loyalty programs to types of loyalty programs in different situations to attract
dissuade customers from decamping to their competitors. many buyers and meet competition. For instance, companies
Researchers’ growing interest in the retail business also offer attractive incentives to maintain and retain a large
(Meyer-Waarden, 2007, 2008; Yi & Jeon, 2003; Lin & number of buyers (Yi & Jeon, 2003). Every retail company
Bowman, 2022; Gao & Huang, 2021) motivate the current tries to attract buyers by using this marketing tool, which
researchers’ plan to investigate the effect of LPs on customer rewards only loyal and recurring customers rather than any
retention in this sector. Specifically, the researchers seek other customer who agrees to buy on specific promotions.
to evaluate the role of CLP on customer loyalty and how Researchers differentiate the rewards offered by loyalty
customer perceived value can create a linkage between programs as ‘hard’ and ‘soft’ benefits (Capizzi & Ferguson,
customer retention and loyalty program. Previously, Omar 2005; Kimura, 2021; Kumar & Reinartz, 2006; Leenheer
et al. (2007) investigated the relationship between LPs et al., 2007). Hard rewards of loyalty programs are generally
and customer loyalty among superstore customers, while physical components such as gifts and discounts; however,
Demoulin and Zidda (2008) investigated the impact of soft rewards are distinct communications and superior
LP satisfaction on store loyalty in the food industry. In treatment offered by the retail shop. Soft rewards have an
Bangladesh, very few studies have been conducted on CLP emotional appeal that gives clients a sense of appreciation
(Siddiqi, 2011; Islam et al., 2012). Limited research has (Harris, 2000). Barlow (1995) examined their comparisons
been done to learn about the effect of extrinsic & intrinsic and found that “soft benefits generally provide a much
motivation and the reward size on customer retention in the stronger loyalty-building impact than hard benefits” (p. 16).
retail industry, and we want to explore this gap. Further, According to Peterson (1995, p. 33), “monetary savings
we want to see the role of CPV as a moderator on the link develop from cash-back offers and coupons that participants
between intrinsic motivation-extrinsic motivation and accumulate while regularly buying the same brand or
customer retention. shopping with the same retailer.” Hence, saving money is
Based on the exchange theory, customer retention, and one of the prime motivations for customers to join the loyalty
customer loyalty program literature, this paper aims to find programs offered by retail organizations.
out the effect of CLP on customer retention. It will help
marketers and entrepreneurs in the retail industry to develop 2.2. Reward Size and Intrinsic-
better strategies that persuade customers to buy more. The Extrinsic Motivation
findings also help retailers recognize the role of CLP and
CPV and understand how they contribute to increasing Loyalty programs are a unified arrangement of
customer retention. In practical terms, this study offers marketing activities that help make more customers and to
several management suggestions for the service industry, build a better interaction with them (Yi & Jeon, 2003). These
particularly for the retail sector, which seeks to build programs are beneficial and, thus, encourage customers
customer retention by developing CLP. to buy more. Different marketing tools can be considered
 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206 197

loyalty programs, such as tier service levels, reward cards, when people engage in activities for external rewards in
gifts, or others. According to Henderson et al. (2011), exchange for their preferred behavior. Although external
customer loyalty programs are mainly designed to build a rewards help consumers get economic benefits, intrinsic
strong bridge between buyers and companies. Moreover, rewards help in many other ways (Deci et al., 1999). For
customer relationship management systems have become example, it provokes people to purchase to get the value that
progressively enlightened by applying retail LPs. These matches their individual buying goals such as enjoyment,
systems help retailers know more about customer information fun, and altruism. Extrinsic incentives encourage them to
and track the purchasing behavior of individual customers obtain a particular benefit from their purchase target (Ryan
(Smith, 2008). Before purchasing, customers primarily & Deci, 2000). Kendrick (1998), in his paper, found that
focus on the reward size, and there is a connotation between external rewards such as rebates, gifts, or discounts motivate
reward size and intrinsic-extrinsic motivation. Customers consumers to become more loyal to the store than a general
always expect better reward systems from companies, and courtesy note ‘Thank you. Besides, exclusive rewards made
they try to engage based on the reward size. It helps them consumers loyal to a retail front than a comparable value
choose a new product from the retailers. Thus, reward size discount. Hence, customer loyalty programs are positively
is a drive of extrinsic and intrinsic motivational programs. related to customer retention in the retail sector (Zakaria
Intrinsic motivation means “doing something because it is et al., 2014).
inherently interesting or enjoyable,” whereas scholars define Retailers offer a variety of reward items associated
extrinsic motivation as “doing something because it leads to with loyalty programs to meet the needs and demands of
a separable outcome” (Ryan & Deci, 2000, p. 55). Previous customers (Dao, 2017). Consumers expect positive things
research revealed that rewards escalate the behavioral from the service providers if they positively observe LPs’
gratification internally, and thus the internal motivation excellence while returning to the same (Susanti et al., 2019).
becomes a reason for maintaining it. Based on the reward Customers’ loyalty turns into assets for firms if the existing
size, customers make decisions, particularly in the retail buyers are happy and recommend other, such as friends,
sector, where they want to enjoy buying and save money. family members, neighbors, etc., to buy from them (Kaynak
Based on the literature, we can propose that, & Hartley, 2008). Uncles et al. (2003, p. 304) argued that
“when the program is attractive, customers may come to
H1: Reward size positively influences intrinsic build a relationship with the program rather than the brand.”
motivation. So, binding customers to an LP with tangible benefits might
H2: Reward size positively influences extrinsic improve customers’ repurchase intention. Based on the
motivation. literature, we can propose that,

2.3. Intrinsic- Extrinsic Motivation and H3: Intrinsic motivation is positively related to customer
Customer Retention retention.
H4: Extrinsic motivation is positively associated with
Customer retention is the capacity to maintain standing customer retention.
customers by forming profitable and friendly relationships
while providing superior quality services. Oliver (1997, 2.4. The Moderating Role of Customer
p. 392) views it as a “deeply held commitment to rebuy or Perceived Value (CPV)
patronize a preferred product or service consistently in the
future, despite situational influences and marketing efforts CPV is perceived by customers as a valuable asset for any
having the potential to cause switching behavior.” Companies organization that plays a critical role in developing loyalty
try to satisfy their clients by building long-term relationships through the loyalty program (O’Brien & Jones, 1995).
so that they can repeat purchases. Retail stores adopt Zeithaml (1988, p. 14) conceptualized customer perceived
different strategies to retain customers, and loyalty programs value as “the consumer’s overall assessment of the utility of
help achieve the objective. This paper explains intrinsic and a product based on perceptions of what is received and what
extrinsic motivation programs to retain customers. Intrinsic is given.” CPV is a vital antecedent of customer retention
motivation means “doing something because it is inherently that helps firms retain their customers and increase sales.
interesting or enjoyable.” On the contrary, “extrinsic Further, customer intention is the probability that buyers
motivation means doing something because it leads to a will continue to purchase in the future (Seiders et al., 2005).
separable outcome” (Ryan & Deci, 2000, p. 55). Zeithaml et al. (1996) defined intention as the prospect that a
Intrinsic motivation arises when people involve customer will work for the firm voluntarily by recommending
themselves in an activity due to internal reward, only for and saying positive things about the company from which he
themselves; however, extrinsic motivation becomes apparent purchased. Numerous studies have provided an experiential
 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
198 Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206

Customer higher secondary (30%), postgraduate degree or higher

Perceived Value (25%), and only 5% of respondents have passed the
secondary school. The majority of the customers’ ages lie
Intrinsic
between 31 and 40 years old, and their percentage is 37. 30%
Motivation of the respondents’ age is between 41 and 50 years, 16% of
the respondents’ age is between 20 and 30 years, and the
Reward Size Customer remaining age is above 50 years old. The data illustrates that
Retention most of the respondents are engaged in the private sector,
which accounts for 35 percent of the total. Self-employment
Extrinsic is the second-highest occupation level, and their percentage
Motivation
is 30%, while only 5% of the respondents are students.
Figure 1: Conceptual Framework
3.2.  Measurement Scales
indication of a link between CPV and customer retention
(Brodie et al., 2009; Parasuraman & Grewal, 2000; Chiu The researchers developed different constructs for
et al., 2005; Bolton et al., 2004). Indeed, preceding studies measuring the role of LP in building customer retention.
have revealed that CPV is the core forerunner leading to A scale consisting of three (3) items adapted from Ryu
customer repurchase intention (Baker et al., 2002; Zeithaml, and Feick (2007) was applied to evaluate reward size.
1988). Perceived value reduces a consumer’s need to The intrinsic and extrinsic motivation scales were adapted
seek alternate service organizations. Low perceived value from Fagan et al. (2008) and Mimouni-Chaabane and Volle
motivates customers to shift to divergent businesses to (2010). Customer perceived value included a four-item
increase perceived value, thus paying for a decline in loyalty. scale adapted from Puncheva-Michelotti and Michelotti
Even satisfied customers are unlikely to support a company (2010). Finally, the four items measuring customer retention
if they believe it cannot provide great value for their money. were adapted from Chaudhuri and Holbrook (2001). Five-
Instead, consumers frequently look for alternative service point Likert scales fixed at 1= “strongly disagree” and
providers to get superior value (Chang, 2006). Based on the 5 = “strongly agree” were used to measure the constructs.
discussion (Figure 1), we can propose that,
3.3.  Analysis Method
H5: CPV moderates the link between intrinsic motivation
and customer retention. Analysis of collected data used in this research was done
H6: CPV moderates the link between extrinsic motivation with structural equation modeling (SEM) by SPSS AMOS
and customer retention. 24, and the moderating effect was tested by using PROCESS
Macro for IBM SPSS v24. We followed a two-step analytical
3. Methodology technique (Hair et al., 2006), where the measurement model
was first assessed for reliability, validity, and fit of the
3.1.  Data Collection and Procedure model. Hypothesized path models, structural models, and
moderating effects were conducted in the second step.
The researchers used a convenience sample strategy to
collect data from respondents in Bangladeshi retail chains and 4. Results
department stores. Those clients were our target respondents.
Initially, three academicians validated the questionnaire and 4.1.  Measurement Model
pre-test on 50 respondents to know the factor structure. The
data was collected from 400 respondents in a three-month Confirmatory factor analyses (CFA) were done to validate
data collection period from January to March 2021, and 350 the suggested structure statistically (Marsh & Hocevar, 1988;
respondents finished the survey. After data screening, the Milfont & Duckitt, 2004). SPSS AMOS 24 was conducted
researchers eliminated 50 cases due to incomplete responses. to determine the construct validity, dimensionality, and
According to Chawla and Sondhi (2011), the sample size must reliability. All the variables were sufficiently normally
be 4 or 5 times greater than the total number of attributes. distributed within the range of –3.00 to +3.00 (Pallant, 2010;
The present study has 17 items of 5 variables collected from Rayner, 1996; Razali & Wah, 2011). The proposed model
350 respondents, therefore satisfying the condition. claims to have a good fit because the various fit indices of the
There were 350 respondents; 45% were females and CFA model are within the recommended ranges. In particular,
55% of males. Depending on the level of education, most the χ2 value of 1.506 is lower than the suggested value of
respondents (40%) have a bachelor’s degree, followed by 3.00 (Bagozzi et al., 1998; Kline, 1998), which indicates a
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Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206 199

well fit. The goodness-of-fit indices show acceptable model 1981). The Cronbach’s α coefficient for each construct
fit (CMIN/DF = 1.308 (p < 0.001), AGFI = 0.937, NFI = measurement was above 0.7 (Nunnally & Bernstein, 1994;
0.947, CFI = 0.987, GFI = 0.955, RMSEA = 0.030) that Hair et al., 2010).
approves the uni-dimensionality of the measurement model Table 2 represents the mean, standard deviation (SD),
(Hair et al., 2010). and correlation coefficients for each construct. Analysis
The CFA and measurement model fit findings were of the study shows that all the constructs are significantly
summarized in Table 1 and Figure 2. The factor loadings of correlated with each other. However, there is no multi-
all the constructs presented in Table 1 were larger than the collinearity exists because all the constructs’ correlations are
lowest threshold value (0.7). The construct reliability value less than 0.9 (Tabachnick & Fidell, 2012), and 72.44% of the
for each construct is above 0.7, and the average variance total variance of the dependent variable was explained by the
extracted (AVE) of all constructs is above 0.5. Additionally, model. Results in Table 2 also show that all the values within
composite reliability (CR) and AVE of all measurement brackets were above the inter-construct correlation values
items were found below the acceptable levels of 0.6 and (Park, 2015) and the condition for discriminant validity was
0.5, respectively (Bagozzi & Yi, 1988; Fornell & Larcker, satisfied.

Table 1: Summary of the Measurement Model

Constructs Items FL AVE CR CA

Customer Retention RET1 0.804 0.554 0.832 0.830
RET2 0.736
RET3 0.679
RET4 0.754
Perceived value CPV1 0.777 0.575 0.844 0.841
CPV2 0.790
CPV3 0.789
CPV4 0.672
Intrinsic Motivation INM1 0.808 0.715 0.883 0.882
INM2 0.860
INM3 0.868
Reward Size RES1 0.814 0.650 0.848 0.847
RES2 0.793
RES3 0.810
Extrinsic Motivation EXM1 0.734 0.576 0.803 0.803
EXM2 0.751
EXM3 0.792
Note: FL: factor loadings, AVE: average variance extracted, CR: composite reliability, and CA: Cronbach’s alpha.

Table 2: Summary Statistics and Correlation Matrix

Constructs Mean SD RET PV IM RS EM

Customer Retention 3.40 0.461 (0.745)
Customer Perceived Value 3.39 0.496 0.356* (0.758)
Intrinsic Motivation 3.52 0.553 0.125* 0.171* (0.846)
Reward size 3.41 0.587 0.280* 0.272* 0.193* (0.806)
Extrinsic Motivation 3.39 0.508 0.340* 0.276* 0.185* 0.224* (0.759)
Note: *, p-value < 0.05. The value within brackets specifies the square root of the AVE values.
 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
200 Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206

Figure 2: Initial Measurement Model

Table 3: Results of Hypotheses Test

Hypotheses Path Relationship Coefficients (β) SE P value Comment

H1 Extrinsic Motivation ← Reward size 0.243 0.052 *** Supported
H2 Intrinsic Motivation ← Reward size 0.200 0.059 0.001 Supported
H3 Customer Retention ← Extrinsic Motivation 0.337 0.069 *** Supported
H4 Customer Retention ← Intrinsic Motivation 0.07 0.051 0.197 Not Supported
***p < 0.001, **p < 0.01, *p < 0.05.

4.2.  Structural Model 0.964, AGFI = 0.946, SRMR = 0.06). Acceptable model fit
is reflected by CFI > 0.95, GFI > 0.90, IFI > 0.90, NFI > 0.9,
Testing the structural model and corresponding TLI > 0.90, and RMSEA < 0.06 (Hair et al., 2010).
theoretical relationships is the subsequent step in data Further examination of the structural path coefficients from
analysis. Two standard tools SEM and path analysis, are Table 3 and Figure 3 shows that reward size has the highest
used to determine the strength of associations between significant influence on extrinsic motivation (β = 0.243, p <
numerous constructs, particularly those that help to deal 0.001) and it also has a significant effect on intrinsic motivation
with latent constructs (Hair et al., 2006; Kline, 2010). χ2 and (β = 0.200, p < 0.005). So, H1 and H2 are accepted. Moreover,
key fit indices, including the CFI, NFI, GFI, IFI, RMSEA, extrinsic motivation significantly influencing effect on
and the Tucker-Lewis index (TLI) were used to evaluate the customer retention (β = 0.337, p < 0.001) and H3 also accepted.
goodness-of-fit of the model (Lee & Jeong, 2014). Result of However, an insignificant relationship exists between intrinsic
the test of the overall structural model, indicate a good model motivation and customer retention (β = 0.07, p < 0.001) so it
fit with (CMIN/DF = 1.405 (p < 0.001), CFI = 0.987, GFI = can be said that hypothesis H4 is not accepted.
 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206 201

Figure 3: Structural Model

Table 4: Model Summary strengthens the insignificant positive relationship between

extrinsic motivation and customer retention.
R R2 MSE F df1 df2 P
0.3137 0.0984 0.1936 12.591 3.0 346.0 0.000 5. Discussion
This research paper specifically examined the role of
reward size on intrinsic and extrinsic motivation and then
4.3.  Moderation Analysis examined their effects on customer retention. The analysis
of the results reveals that organizational reward size has a
This section investigates the moderating effect of significant impact on extrinsic and intrinsic motivation.
customer perceived value on intrinsic motivation- customer Further, extrinsic motivation is associated positively with
retention and the extrinsic motivation- customer retention customer retention. However, intrinsic motivation has no
and whether or not such an effect is significant in explained significant effect on customer retention. The investigation of
variables. Analysis results are summarized in Tables 5 and our results supports the conceptualized model. This research
6, and the interaction effect is further plotted in Figures 4 paper contributes to current knowledge about loyalty
and 5, respectively. The table and figure show the impacts of programs and their relation to customer intention. We propose
testing moderating hypotheses H5 and H6. The findings of a new framework in this paper about the significance of LP in
the moderation analysis displayed in Table 4 showed that the the retail chain industry. Our results create a linkage between
moderate effect of CPV on intrinsic motivation and customer LP and customer retention, supported by (Meyer-Waarden
retention is insignificant. Therefore, H5 is rejected. et al., 2013; Soliha et al., 2021; Zaid & Patwayati, 2021). The
Figure 5 also shows that CPV is negatively associated with findings show that extrinsic motivation is more important than
intrinsic motivation and customer retention. In particular, the intrinsic rewards in the retailing industry in Bangladesh, and
effect of customer perceived value does not fully contribute these findings are supported by (Lewis, 2004). Moderation
to the intrinsic motivation in customer retention. analysis reveals that CPV has an insignificant effect on
Further, we continued to study moderating effect of CPV customer retention’s intrinsic and extrinsic motivation.
between EM & CR. The findings of this study suggest that Furthermore, while the moderating variable CPV strengthens
CPV does not moderate the effect (Table 5 and Figure 5) of the positive relationship between extrinsic motivation and
extrinsic motivation on customer retention. Therefore, H6 is customer retention, it negatively dampens the relationship
also rejected. Although the hypothesis has been rejected, it between intrinsic motivation and customer retention.
can be concluded that CPV encourages customer retention
by acting as a partial moderator in the loyalty program based 5.1.  Theoretical Contribution
on the model summaries of Tables 5 and 6.
Figure 5 further shows that the slope of high CPV This study investigates the effects of LP on customer retention
is steeper than that of low CPV. This suggested that CPV grounded on the exchange theory and motivational theory.
 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
202 Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206

Table 5: Model

Coeff se t P LLC1 ULC1

Constant 3.1310 0.9378 3.3387 0.0009 1.2865 4.9754
IMA –0.1927 0.2704 –0.7127 0.4765 –0.7244 0.3390
PVA 0.0216 0.2785 0.0774 0.9383 –0.5262 0.5694
Int_1 0.0733 0.0797 0.9186 0.3589 –0.0836 0.2301

Table 6: Model Summary

R R2 MAP F df1 df2 P

0.3713 0.1378 0.1852 18.438 3.0 346.0 0.000

5
4.5
4
Customer Retenon

3.5 Moderator
3 Low CPV
2.5
High CPV
2
1.5
1
Low Int Mot High Int Mot

Figure 4: Moderation Effect of Customer Perceived Value Between IM & CR

5
4.5
Customer Retenon

4
3.5 Moderator
3 Low CPV
2.5
High CPV
2
1.5
1
Low Ext Mot High Ext Mot

Figure 5: Moderation Effect of Customer Perceived Value Between EM & CR

 Syed Md. Hasib AHSAN, Md. ALAUDDIN, Mohammad Manjur ALAM, Adiba NAZIA, Tasnim ISLAM /
Journal of Asian Finance, Economics and Business Vol 9 No 6 (2022) 0195–0206 203

Table 7: Results of Moderating Analysis of Access Convenience

Coeff se t P LLC1 ULC1

Constant 1.9772 0.7384 2.6776 0.0078 0.5248 3.4296
EMA 0.1848 0.2183 0.8466 0.3978 –0.2446 0.6142
PVA 0.2209 0.2226 0.9925 0.3217 –0.2169 0.6586
Int_1 0.0043 0.0648 0.0661 0.9474 –0.1233 0.1318

Using data collected from clients of retail chains in Bangladesh, LP and customer retention. In conclusion, this research
we find that reward size positively impacts customer uses the survey items, and we collected primary data for
retention. This study contributes to the effects of reward size this study. So, to avoid the risk of common method bias,
on extrinsic and intrinsic motivation in the retail chain sector researchers must use a good combination of both primary
in Bangladesh. This research also contributes to extrinsic and and secondary data.
intrinsic motivations’ effect on customer retention. Based on
the exchange and motivational theory, this research explains the
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