The impact of relationship strategy on customer engagement in paid membership programs

Abstract

This study explores the types of customer relationships in paid memberships and their behavioral manifestations in terms of customer engagement. It further analyzes and compares the effects of reward-based and experience-based tactics on customer engagement, as well as the moderating role of relationship duration. Employing an exploratory analytical approach of grounded theory, we confirmed that paid memberships are characterized by a strong transactional and weak communal relationship form. Correspondingly, customer engagement can be classified into transactional and non-transactional dimensions. By collecting member-customer data from both single and multiple paid membership platforms in China, we find that both reward-based and experience-based tactics positively influence both dimensions of engagement. However, reward-based tactics are more effective in fostering transactional engagement, while experience-based tactics are more effective in promoting non-transactional engagement. Moreover, relationship duration positively moderates the relationship between reward-based tactics and non-transactional engagement. This study thus provides theoretical and practical insights for the effective operation of paid membership program within Chinese e-commerce platforms.