"For blood and loyalty": A literature review on loyalty programs for blood donation
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“For blood and loyalty”: A literature review on loyalty programs for blood donation January 2022 Leo Southcott QUT Centre for Behavioural Economics, Society & Technology Kathleen Chell Australian Red Cross Lifeblood Uwe Dulleck QUT Centre for Behavioural Economics, Society & Technology January 2022 1
Contents
Executive Summary .............................................................................................................. 3
Introduction .......................................................................................................................... 5
Country characteristics ........................................................................................................ 8
Cultural factors .................................................................................................................... 8
Industry characteristics ........................................................................................................ 9
Purchase frequency ............................................................................................................. 9
Competition....................................................................................................................... 10
Design characteristics .........................................................................................................10
Loyalty program structure ................................................................................................. 10
Enrolment type .............................................................................................................. 10
Tiers ............................................................................................................................... 12
Partnerships ................................................................................................................... 13
Reward content ................................................................................................................. 14
Reward exchange value ................................................................................................. 14
Reward type ................................................................................................................... 16
Reward fit ...................................................................................................................... 17
Reward delivery ................................................................................................................. 19
Reward redemption ....................................................................................................... 19
Reward behaviour .......................................................................................................... 21
Reward visibility ............................................................................................................. 22
Summary of managerial implications ................................................................................. 23
Limitations and future research agenda ........................................................................... 25
Conclusion ........................................................................................................................... 26
References ........................................................................................................................... 27
Acknowledgement
This report was a collaboration undertaken between the QUT
Centre for Behavioural Economics, Society and Technology, and
Australian Red Cross Lifeblood. Australian governments fund
Australian Red Cross Lifeblood to provide blood, blood products and
services to the Australian Community.
2
Executive Summary
Maintaining adequate blood supply levels is an ongoing concern for many blood donation
organisations (BDOs). Whilst the recruitment of new donors is part of the solution, BDOs
need to encourage existing donors to donate more frequently. One strategy by which
BDOs can do this is to offer a loyalty program where donors can earn points for actions
that benefit the BDO (e.g., donating blood), and redeem those points for a variety of
rewards. Despite such programs being commonly adopted by BDOs in the US, there is
scant research on loyalty programs for prosocial behaviours such as blood donation. Most
research focuses on one-off incentives or is set in a commercial context. Given there are
key differences between a prosocial and commercial context, this report reviews existing
commercial loyalty program and blood-incentive literature to recommend key features that
BDOs should consider when designing a loyalty program for blood donors.
Research indicates that some country and industry characteristics impact loyalty program
effectiveness. The success of loyalty programs appears to be contingent on cultural factors,
including broad cultural dimensions such as individualism, long-term orientation, and
power distance as well as more nuanced cultural values such as attitudes towards
compensation. Loyalty programs may be particularly beneficial for BDOs because they
mitigate the otherwise high perceived risk, and low personal benefit (value-gained),
associated with giving blood.
When designing loyalty program features, BDOs should pay particular attention to the
enrolment type, point exchange offering and redemption policy, as well as reward type and
reward fit. Research suggests that a closed membership, in which donors must meet certain
eligibility criteria to join (e.g., based on a minimum number of donations, donation type, or
blood type), will enhance feelings of belonging. BDOs should consider offering points for
donation behaviour (e.g., per donation, or per year as a blood donor) and other forms of
engagement (e.g., social media post, or survey participation), but ensure it is easy for
donors to understand what they need to do to unlock the next reward. When the point
exchange offering is clear and simple, a small step size is recommended (e.g., 5 points per
donation), however, when point allocation becomes more complex and ambiguous, a larger
step size is recommended (e.g., 100 points per donation); the reward distance remains the
same (e.g., after five donations, a donor has enough points to redeem for a t-shirt). A tiered
approach could be used based on donation frequency or time length as an active donor,
with higher tiers offering higher value rewards.
A blood donor loyalty program should offer a combination of hard (e.g., vouchers) and
soft/mixed (e.g., branded items) rewards, with direct rewards (congruent with the act of
donation) likely better received by donors. Sponsorship agreements with commercial
companies will lower costs and increase the range of rewards. Finally, rewards should be
3
offered privately (versus publicly) to reduce donor concerns of social disapproval from
others.
Whilst the literature yields valuable insights into how a donor loyalty program could be
designed, there are a myriad of research gaps that future research could address. In
addition to better understanding specific design characteristics that improve loyalty
program engagement and effectiveness among blood donors, the long-term impact of
loyalty programs also needs attention. Researchers will also need to consider the
moderating effect of cultural factors and market settings (e.g., donation system).
4
Introduction
Prosocial behaviour is defined as “moral, voluntary behaviour intended to benefit others,
and includes behaviours such as helping, sharing, and comforting” (Thompson & Gullone,
2003, p. 176). Prosocial acts such as charitable giving, volunteering and blood donation
represent a significant part of social life, however, for many of these activities, supply is
falling short of societal needs, none more so than human blood (Lacetera, et al., 2012).
Maintaining adequate blood supply levels is an ongoing concern for many blood donation
organisations (BDOs) (Van Dyke, et al., 2020). Indeed, in Australia, blood is needed every
24 seconds yet only 3.5 percent of people donate (Lifeblood, 2021). Whilst the recruitment
of new donors is part of the solution, there is room for improvement when it comes to
encouraging existing donors to donate more frequently. Less than 60% of new donors
return to donate, and of those who return, 50% of donors give fewer than three plasma
donations per year (Thorpe, et al., 2020), despite the fact that whole blood can be donated
every 12 weeks and plasma as often as every fortnight (BetterHealth, 2022). Moreover,
repeated donors are the most reliable donors and are associated with high blood
qualification rates and low recruitment costs (Chen, et al., 2020).
One strategy by which BDOs can encourage donor retention and more frequent blood
donation is to offer a donor loyalty program where donors can earn points for actions that
benefit the BDO (e.g., donating blood), and redeem those points for a variety of rewards.
Loyalty programs are a viable alternative to traditional incentive systems such as paid
donation and blood banks and may therefore provide substantial benefits to BDOs
operating within voluntary non-remunerated (VNR) donation systems such as Australia
(Chell, et al., 2018; Lifeblood, 2020). The promise of loyalty programs is that they promote
retention and build customer relationships by reinforcing behaviour and increasing the
value exchange (Shelper, et al., 2019). The goal of a loyalty program is to create or enhance
customer loyalty, which includes behavioural loyalty (repeat purchase or patronage of a
product or service) and attitudinal loyalty (the degree of liking and positive attitude
towards the company) (Kim, et al., 2021; Belli, et al., 2021). Although behavioural loyalty is
the principal concern of commercial companies and BDOs alike, loyalty programs must also
resonate with customers on an emotional and attitudinal level to prevent them from
switching to rival programs (Belli, et al., 2021). Fostering attitudinal loyalty may also
improve blood safety because donors who are genuinely committed to a BDO’s mission
(i.e., helping others) are less likely to withhold information about their lifestyles or medical
conditions that may make them unsuitable to donate blood (World Health Organization,
2010).
Whilst loyalty programs are ubiquitous in a commercial context, non-profit organisations
are also beginning to adopt them. In Australia for example, Lifeline offers a loyalty card
where customers can eventually get $20 off a purchase (Figure 1) and several BDOs in the
5
United States already use donor loyalty programs (Figure 2). 1 However, empirical research
on loyalty programs for prosocial behaviours (e.g., blood donation) is effectively non-
existent. Most research focuses on one-off incentives for blood donation 2 (an exception is
Bilancini, et al. (2021)) or is set in commercial contexts such as retail, travel and hospitality
industries (Chen, et al., 2021; Belli, et al., 2021; Kim, et al., 2021). There is evidence that
donors generally support the roll-out of a donor loyalty program, believe such a program
would encourage others to donate more and are receptive to potential rewards (concert
or movie tickets, store vouchers, charity donations and gifts) (Van Dyke, et al., 2020).
However, donation is a fundamentally different behaviour to consumption because donors
benefit others (at their own expense) whereas consumers only benefit themselves (White,
et al., 2020). Additionally, the dominant motivation for blood donation is intrinsic and
altruistic and the extrinsic rewards offered by a donor loyalty program may diminish, rather
than reinforce, this motivation (Bilancini, et al., 2021). Given these key differences, it
remains unclear whether a donor loyalty program is as effective as its commercial
counterpart and, importantly, how a loyalty program should be designed to improve
blood donor attitudinal and behavioural loyalty.
Figure 1. Lifeline loyalty card.
1
For other examples of donor loyalty programs, see LifeServe’s rewards store and The Blood Center’s “Points
for Life” program.
2
See Chell, et al. (2018) for a systematic review of literature on incentives in blood donation.
6Figure 2. ImpactLife rewards store. (ImpactLife, 2022).
Using insights from commercial loyalty program and blood-incentive literature, the
purpose of this report is to identify and understand the key features that BDOs should
consider when designing a loyalty program to effectively encourage blood donor
retention and increase frequency of donation. The review is structured as follows: first,
we discuss country, industry and design characteristics that impact loyalty program
effectiveness and are relevant to the blood donation context. Second, managerial
implications for BDOs designing a donor loyalty program are summarised, before
presenting directions for future research.
7Country characteristics
Cultural factors
Most commercial loyalty program research is done in the United States and Europe, which
makes it challenging for practitioners to know which design characteristics can be
standardised across markets and which characteristics need to be adapted (Chen, et al.,
2021). Indeed, there is evidence that loyalty program effectiveness is contingent on culture
(Chen, et al., 2021). Bombaij and Dekimpe (2020) found that loyalty programs have a
stronger impact on retail sales in countries with more individualistic and long-term oriented
cultures. Individualistic cultures value taking care of oneself and immediate families, have
a stronger aim for achievement and are more competitive (Bombaij & Dekimpe, 2020).
Loyalty programs are likely successful in these cultures because they offer members the
opportunity to achieve something others cannot and offer more personalised attention
(Bombaij & Dekimpe, 2020). Long-term oriented societies value future rewards highly,
indicating traits such as persistence and the ability to adapt (Bombaij & Dekimpe, 2020).
Such societies may favour loyalty programs because they require the investment of time
and money and give members the opportunity to build long-term relationships (Bombaij &
Dekimpe, 2020). Moreover, several studies have found that cultures with higher power
distance tend to be less charitable (Winterich & Zhang, 2014; de Jort, et al., 2010; Luria, et
al., 2015). This is because societies with high power distance expect and accept inequality
in power or wealth and thus feel less responsibility for charitable giving (Winterich & Zhang,
2014).
In terms of individualism, long term orientation and power distance, Australia and the US
are similar (Figure 3), suggesting that, at face value, many of the insights from the
commercial loyalty program literature are applicable to an Australian context. However,
whilst broad cultural values may be similar, other values may be more important for
interpreting the success of loyalty programs. In China, for
example, donor loyalty programs might be more effective
because blood is highly symbolic and carries special
cultural associations such as a bond of loyalty and
friendship (Yu, et al., 2013). Moreover, donors in
countries with paid donation systems generally view In addition to broad cultural
cash incentives more favourably than donors in VNR values, BDOs should account
donation systems (Chell, et al., 2018). This suggests for cultural nuances when
that the donation system (paid versus voluntary) designing a loyalty program.
influences donors’ perception of rewards.
Ultimately, in addition to broad cultural values, BDOs
should account for cultural nuances when designing a
loyalty program.
8Figure 3. Hofstede's cultural dimensions. (Hofstede Insights, 2022).
100
90 91
90
80
71
68
70
61 62
60
51
Index 50 46
38 40
40
30 26
21
20
10
0
Power distance Individualism Masculinity Uncertainty Long Term Indulgence
Avoidance Orientation
Cultural dimension
Australia United States
Industry characteristics
Purchase frequency
There is evidence that loyalty programs are more effective in lower purchase frequency
industries, such as travel, because they are typically characterised by higher purchase value
and/or complexity and present greater perceived risk for
consumers (Belli, et al., 2021). Loyalty programs serve to
mitigate this risk by enhancing trust, value perceptions
and the quality of the customer-firm relationship (Belli,
et al., 2021). BDOs operate in a low purchase
BDOs stand to benefit from
frequency industry because blood donation can be a
using a donor loyalty program
because it may mitigate the highly involved and daunting experience (Bednall &
otherwise high perceived risk, Bove, 2011). Therefore, BDOs stand to benefit from
and low personal benefit using a donor loyalty program because it may mitigate
(value-gained), associated with the otherwise high perceived risk, and low personal
giving blood. benefit (value-gained), associated with giving blood.
9Competition
Intuitively, the level of competition in a market should impact the effectiveness of an
individual loyalty program yet most research reviews single programs in isolation and not
in a competitive setting (Liu & Yang, 2009). Using data from 180 retailers across 15 retail
sectors, Leenheer and Bijmolt (2008) found that competitive characteristics, including
competitive intensity, have no influence on customer loyalty. Only firm characteristics such
as technological skills and centralisation were meaningful (Leenheer & Bijmolt, 2008).
However, competitive intensity may play a greater role in other industries such as travel.
Liu and Yang (2009) found that amongst airlines, market saturation can diminish the return
of an individual program because loyalty programs no longer represent a source of
competitive advantage. If an airline’s products are highly expandable in the sense that they
can be extended to meet the demands in related industries, that airline is in effect
competing with firms in those related industries and can gain a competitive advantage if
those firms lack a loyalty program (Liu & Yang, 2009).
For BDOs in a donation system with multiple blood
operators (e.g., United States), a loyalty program In donation systems with
could provide a competitive advantage (where only one blood operator (e.g.,
donors choose one BDO over another), Australia), a loyalty program
could give blood donation a
particularly against those who offer payment.
competitive advantage by
In donation systems with only one blood
increasing the value of the
operator (e.g., Australia), a loyalty program donation itself, such that
could give blood donation a competitive individuals are more willing to
advantage by increasing the value of the spend their time (as a limited
donation itself, such that individuals are more resource) donating blood
willing to spend their time (as a limited compared to other volunteering
or leisure activities.
resource) donating blood compared to other
volunteering or leisure activities (Lacetera &
Macis, 2013).
Design characteristics
Loyalty program structure
Enrolment type
Enrolment type, or “eligibility”, refers to whether the loyalty program is open to all
customers (open program) or requires company approval or the achievement of qualifying
criteria (closed program) (Kim, et al., 2021; Bijmolt, et al., 2011). For example, Chico’s, a
women’s clothing chain, offers a closed program where customers are admitted as
10“passport members” after spending $500, entitling them to various coupons on future
purchases (Berman, 2006). It appears that closed programs are generally more effective at
driving loyalty than open programs (Belli, et al., 2021; Esmark, et al., 2016). Although open
programs have the advantage of enrolling a large number of customers (Berman, 2006),
restricted access automatically renders the membership group more prestigious and
desirable, thus enhancing members’ sense of belonging and loyalty (Belli, et al., 2021;
Bhattacharya, et al., 1995). Closed programs also enhance feelings of belonging and
exclusivity by offering more personalised attention to members (Belli, et al., 2021; Melnyk
& van Osselaer, 2012). In addition, closed programs may increase sales or profit in the long
run as less loyal and less profitable customers are screened out (Berman, 2006).
However, open programs may be effective in certain industries (Belli, et al., 2021; Esmark,
et al., 2016). Esmark, et al. (2016) suggest that in highly differentiated industries where
loyalty programs are used frequently (e.g., grocers), open
programs lead to greater in-group identification, and in turn
loyalty intentions, than closed ones. Conversely,
undifferentiated industries, where loyalty program use is
A closed program offers infrequent (e.g., drugstore, travel), benefit more when the
blood donors a greater program is closed (Esmark, et al., 2016). In a blood donation
sense of belonging. context, loyalty programs would be used relatively
infrequently because donors can only donate so much blood
each time. As such, under a closed-program, blood donors will
likely feel enmeshed in a social network which evokes feelings
of belonging and leads to greater loyalty (Esmark, et al., 2016).
BDOs could set eligibility criteria based on number of donations. For
example, donors may be admitted to the program once they make five donations of either
blood, plasma, or platelets.
Many studies on enrolment type examine its effect on members, yet
few consider the effect on those who are not members (i.e.,
bystanders). A closed program automatically excludes others
from participation, and this can discourage participation
(Lee, et al., 2014). However, if a bystander must opt in to
When eligibility criteria
join the program, the negative effects of exclusion can be
are congruent (related)
mitigated if the reward is social in nature (Lee, et al., 2014). to the reward,
This is because opting in is a social commitment and this is bystanders feel more
congruent (related) to the social reward (Lee, et al., 2014). motivated to join.
This suggests that when the effort required to join a closed
loyalty program (i.e., the eligibility criteria) is congruent to the
reward, bystanders feel more motivated to join. For example,
if the eligibility criterion is to make five donations, bystanders
11may be more motivated to join the program if the reward is a virtual badge clearly indicating
that five donations have been made.
Tiers
Tiers are the levels of a loyalty program’s hierarchy, usually segmented based on purchase
levels (Kim, et al., 2021). Higher levels entail greater rewards or special treatment (Belli, et
al., 2021). Most studies examine the impact of tiers on customer behaviour but few study
their effect on loyalty. Drèze and Nunes (2009) found a three-tier structure to be ideal as
it boosts perceptions of status among top-tier members and is the most satisfying to all
members of the program. Creating elite classes does not disenfranchise non-elites as they
believe those who are more loyal deserve special treatment or like the idea of something
to strive for (Drèze & Nunes, 2009). Increasing the size of the elite class in the second tier
dilutes status perceptions among the top tier and status-laden symbols (e.g., gold, silver,
bronze) reinforce perceptions more than generic colours (e.g., blue, yellow) (Drèze & Nunes,
2009). However, it should be noted that higher status perceptions do not necessarily
increase loyalty.
Some studies have found a positive relationship between tier level and both attitudinal
and behavioural loyalty (Lacey, et al., 2007; Tanford, 2013). For example, Tanford (2013)
examined the hotel industry and found that as tier level increased, members reported
higher emotional commitment to their preferred hotel and spent a greater proportion of
nights there. This may be because elite members perceive preferential treatment as a
recognition of, and reward for, their special customer status (Lacey, et al., 2007). Kopalle,
et al. (2012) studied the effect of tiers on behavioural loyalty and found that they induce a
“points pressure effect” such that members increase their purchase frequency to gain entry
to a higher tier. However, a meta-analysis by Belli, et al. (2021) found no statistically
significant relationship between tiers and loyalty.
Broadly speaking, tiers appear to have a positive impact on loyalty, or at the very least,
status perceptions. BDOs could adopt a tier design where
membership levels are based on donation frequency or time
length as an active donor, and higher tiers entail progressively
higher value rewards. For example, donors could advance
from the lowest tier by making an additional 3 donations
Tiers (or membership
levels) could be based on per year or by making at least 1 donation per year for 20
donation frequency or consecutive years. However, little is known about the ideal
time length as an active number or use of tiers for blood donation, and so BDOs will
donor. need to experiment with tier size, structure, and symbolism.
For example, using labels such as “active donor”, “loyal
donor” and “super donor” may be viewed more favourably by
donors than status-laden symbols. As demotion to a lower tier
can decrease loyalty (Belli, et al., 2021; Wagner, et al., 2009),
12donors that are on the verge of demotion should be notified of such and given ample
opportunity to increase their donations.
Partnerships
A loyalty program partnership is where the loyalty program provider offers a joint program
with another vendor from which customers can earn and redeem rewards (coalition) or
simply redeem rewards without accruing points (sponsorship agreement) (Kim, et al., 2021).
These programs are also known as “multi-vendor” programs (Bijmolt, et al., 2011). In Canada,
for example, Air Miles is a coalition loyalty program comprised of hundreds of partners and
offering thousands of reward choices to its members (Bijmolt, et al., 2011). Single-vendor
programs allow members to earn and redeem rewards with the same vendor and are by far
the most popular type of program (Bijmolt, et al., 2011).
It is unclear whether multi-vendor programs are more effective than single vendor
programs at driving loyalty. Belli, et al. (2021) found that overall coalition loyalty programs
were just as effective as single vendor programs. However, the effectiveness of coalitions
likely differs across industries (Belli, et al., 2021). Coalitions may be more appealing to
members in industries with low purchase frequency as they enable members to surpass
reward thresholds in a reasonable amount of time (Bombaij & Dekimpe, 2020). In the
context of retailers, Bombaij and Dekimpe (2020) found that single vendor loyalty
programs have a greater effect on retail sales productivity than multi-vendor programs.
Others have found similar results (Dorotic, et al., 2011). However, the usefulness of these
studies is tentative as they use sales performance as a measure, not loyalty per se.
Nonetheless, there are many theoretical arguments for adopting a multi-vendor design.
On the one hand, coalition loyalty programs offer greater perceived economic benefits to
members as they can accumulate points faster and have access to a wider range of rewards
(Belli, et al., 2021; Dorotic, et al., 2011). They may also facilitate cross-selling and positive
spill over effects yet there is little empirical support for this proposition (Bombaij &
Dekimpe, 2020), perhaps only for highly complementary partners (Bijmolt, et al., 2011). On
the other hand, service failures at one partner can create negative spill over effects (e.g.
bad PR) for the entire coalition (Bombaij & Dekimpe, 2020) and coalitions may divide
customers’ loyalty among partners because joint offers promote comparison across deals
(Dorotic, et al., 2011).
13On balance, BDOs would benefit more from a multi-vendor design than a single vendor
design. Firstly, a multi-vendor program is lower cost
(Bombaij & Dekimpe, 2020). Many donors are
concerned about the cost of rewards to BDOs
(Chmielewski, et al., 2012), and would likely
welcome efforts to reduce it. In practice, a multi- BDOs would benefit more from a
vendor program could take the form of a multi-vendor (vs single-vendor)
sponsorship agreement where potential rewards design to increase the breadth of
include sponsored/partner items as well the reward types available.
BDO’s own items. Secondly, a multi-vendor Sponsorship agreements will
program provides access to a wider range of lower costs, however BDOs must
rewards which BDOs could not otherwise carefully choose brand-aligned
provide. However, when entering into sponsorship partners.
agreements, BDOs must carefully select partners
that are brand-aligned and prepare for potential
negative spill over effects (Kim, et al., 2021).
Reward content
Reward exchange value
Reward exchange value (aka. “currency”) refers to “the way the company exchanges value
with the customer through loyalty programs, such as points, miles, and so on” (Kim, et al.,
2021, p. 74). For example, members of the Qantas Frequent Flyer Program can earn 4 points
for every dollar spent at Adidas stores (Qantas Frequent Flyer, 2022). However, not every
program uses points. Members of Shell’s Fuel Rewards Program can earn 5 cents off per
gallon (Belli, et al., 2021). Research suggests that points offer a range of experiential
benefits for customers including pleasure from working towards goals, positive affect
arising from the anticipated rewards and a sense of accomplishment (Belli, et al., 2021).
Points also cause people to overestimate the value of rewards (Kim, et al., 2021; van
Osselaer, et al., 3004; Shelper, et al., 2019), which may increase the perceived economic
value of the loyalty program.
Furthermore, there is some evidence that points have a positive impact on loyalty. Belli, et
al. (2021) found that points increase loyalty but only focused on programs offering
economic rewards. Bagchi and Li (2011) found that reward distance and step size can affect
perceptions of progress, which, in turn, influence loyalty and recommendation likelihood.
Reward distance is the number of points needed to reach a reward milestone and step size
is the number of points earned for each desired action (Bagchi & Li, 2011). For example,
New York Blood Centre’s donor loyalty program uses a reward distance of 600 points for
the first reward and a step size of 75 points per whole blood donation (New York Blood
Center, 2022). In a high-magnitude program, the reward distance and step size are large
14(e.g., 1000-point threshold and 10 points/dollar spent) whilst in a low-magnitude program,
the reward distance and step size are small (e.g., 100-point threshold and 1 point/dollar
spent) (Bagchi & Li, 2011). Importantly, consumers under both programs earn and redeem
rewards at the same rate (Bagchi & Li, 2011). Whether the step size or reward distance is
“large” or “small” is relative (Bagchi & Li, 2011). Using the example of the New York Blood
Centre, the reward distance (600 points) and step size (75 points/donation) are only large
in comparison to a smaller reward distance (e.g., 60 points) and step size (e.g., 7.5
points/donation).
The step size can be ambiguous if it is confusing, stated as a range (e.g., 5-15 points/dollar
spent) or undisclosed (Bagchi & Li, 2011). For example, the New York Blood Centre offers
bonus points based on the day of the week, donation volume and location (New York
Blood Center, 2022), and this can make step sizes more ambiguous. When the step size is
ambiguous, customers only refer to reward distance to make inferences about their
progression (Bagchi & Li, 2011), possibly because ambiguity increases the difficulty of
performing calculations (Kwong, et al., 2011). In these circumstances, customers feel more
progressed relative to others in a high-magnitude program (e.g., 800 points earned out of
1000) compared to a low-magnitude program (e.g., 80 points earned out 100), even though
their actual progression is the same (Bagchi & Li, 2011). Crucially, such illusions of
progression may induce customers to accelerate their effort towards achieving the reward
(Kivetz, et al., 2006; Bagchi & Li, 2011). However, if the step size is
unambiguous, customers feel more progressed relative to
others under a low-magnitude program because the small
step size makes the small reward distance appear larger
(Bagchi & Li, 2011). Therefore, it is recommended that BDOs Ensure it is easy for
make it as easy as possible for members to calculate the donors to calculate the
benefits and understand
benefits they can get with points (Kwong, et al., 2011). For
what they need to do to
example, it is easier to compute the benefits if the reward unlock the next reward.
distance is “100 points” rather than “113 points”.
15Where point allocation is simple and unambiguous (i.e.,
it is easy for donors to ascertain how many donations
are needed to unlock the next reward), then BDOs
should opt for a low-magnitude program, featuring
program is recommended.
When point allocation is clear and small step sizes (e.g., 5 points per donation) and
small reward distances (e.g., 25 points required to
and ambiguous, a high-magnitude
simple, a low-magnitude program
When point allocation is complex
is recommended. redeem a t-shirt). If the loyalty program becomes
is recommended.
When point allocation is complex more complex, perhaps because partners are
simple, a low-magnitude program
and ambiguous, a high-magnitude
When point allocation is clear and involved or there is variability in the number of
program is recommended. points a donor can earn per donation, the step size
may become ambiguous and a high-magnitude design
is more appropriate (e.g., step size of 100 points
earned per donation (plus variations) with reward
distance of 500 points).
Reward type
Rewards can be “hard” in the sense that they are tangible and offer economic or financial
benefits (e.g., discount, cash payment, electronic goods, jewellery) or “soft” if they are
intangible and offer psychological or emotional benefits (e.g., special attention, preferential
treatment, recognition, exclusivity) (Belli, et al., 2021). Branded items such as t-shirts, bags
and bottles not otherwise available to purchase on the market (Figure 4) are better
classified as “mixed” rewards because the item has a ‘monetary’ value and provides a
tangible benefit while simultaneously highlighting the donor’s status.
Figure 4. ImpactLife selected rewards. (ImpactLife, 2022).
16Research suggests that neither reward type is necessarily better than the other. Although
Bridson, et al. (2008) found that, in the context of a health and beauty retailer, soft rewards
are the most important predictor of store loyalty, both reward types should be used as
they each target different types of loyalty. Hard rewards are usually the reason consumers
join loyalty programs and encourage behavioural loyalty by forming commitment in the
early stages of the customer-firm relationship (Melancon, et al., 2010). Hard rewards draw
consumers’ attention away from the brand to the reward (Bridson, et al., 2008), resulting
in extrinsically motivated repeat patronage (Melancon, et al., 2010), whilst soft rewards
encourage attitudinal loyalty (Bridson, et al., 2008; Melancon, et al., 2010) by reinforcing
the emotional bond between the customer and the firm (Melancon, et al., 2010). As such,
BDOs should offer a combination of hard, mixed, and soft
rewards as part of a loyalty program.
The importance of thanking donors and recognising their
contribution through soft rewards (e.g., donation
BDOs should offer a
milestone certificates and award ceremonies, and thank- combination of hard, mixed, and
you emails) shows donors that they are valued by the soft rewards.
BDO. As part of a tiered loyalty program, additional soft
Additional soft rewards could be
rewards could be offered to donors in higher offered to donors in higher
membership levels (i.e., already exhibit behavioural membership levels.
loyalty by donating regularly) in the form of preferential
treatment (e.g., preferred donation appointment times)
and personalised recognition (e.g., letter of
commendation from BDO executives).
Reward fit
Reward fit refers to whether the reward is directly related to the core offering of the loyalty
program provider (direct) or unrelated (indirect) (Belli, et al., 2021; Kim, et al., 2021). For
example, a grocery store may offer a direct reward in the form of free groceries (Kivetz,
2005) and an airline may offer indirect rewards such as kitchen
appliances and wine (Belli, et al., 2021). There is evidence that, in
most circumstances, direct rewards more effectively increase
loyalty than indirect rewards (Belli, et al., 2021; Yi & Jeon,
Direct (congruent) 2003; Kivetz, 2005). Yi and Jeon (2003) found that because
rewards are likely high-involvement customers pay more attention to the
favoured by donors.
purchase of a product, including information about the type of
reward, direct rewards that are related to the value
proposition of a product are likely to receive more attention
than indirect rewards. Blood donation is not a trivial commitment.
Giving blood can be a daunting experience (Bednall & Bove, 2011)
and donors likely participate actively in information search about the BDO. Most blood
17donors can be characterised as high-involvement customers, meaning direct rewards are
likely favoured by donors. For example, a blood donor kit (Figure 5) is a direct reward
because it facilitates the act blood donation. The blood-incentive literature provides
further support for the use of direct rewards, finding that incentives such as paid time off
work and health checks were viewed most positively by donors because they were seen as
congruent with the effort expended in donating blood (Van Dyke, et al., 2020).
Figure 5. LifeServe blood donor kit. (LifeServe, 2022).
Kivetz (2005) offers a different explanation for why direct rewards are preferable to
indirect ones, even when the latter is of higher monetary value and imposes fewer
restrictions. Since indirect rewards are unrelated to the rewarded behaviour, consumers
seem to attribute their behaviour to the reward itself, causing them to feel slightly
manipulated by the loyalty program provider (Kivetz, 2005; Chmielewski, et al., 2012). In
contrast, direct rewards reinforce the intrinsic motivation to engage in the rewarded
behaviour and consumers infer that their behaviour reflects their own individual tastes and
preferences (Kivetz, 2005). Given that blood donation is mostly driven by altruistic
motivations (Bilancini, et al., 2021), donors are more inclined to choose direct rewards over
indirect rewards.
18However, when the reward is unexpected, consumers do
not feel manipulated and are more inclined to accept an
indirect reward (Kivetz, 2005). Therefore, BDOs could
offer surprise rewards that are indirect. For example,
BDOs could offer
donors could redeem 50 points for a mystery shirt (Figure surprise rewards that
6). In these circumstances, any potentially winnable shirt are indirect.
is indirect because t-shirts are generally unrelated to the
donation act. Alternatively, a donor could be automatically
entered into a program-wide prize draw and win an insulated
mug.
Figure 6. LifeServe mystery shirt reward. (LifeServe, 2022).
Reward delivery
Reward redemption
Reward redemption captures reward timing (whether distribution of the reward is instant
or delayed) and redemption policy (how easy or difficult it is to redeem the reward) (Kim,
et al., 2021; Dorotic, et al., 2014). Typically, a loyalty program operates using delayed
rewards (after points accumulation) that create switching costs because members fear
losing their accumulated points and this in turn produces behavioural loyalty (Belli, et al.,
2021). However, if members may fail to redeem their points because they either forget or
have not reached the required threshold, this can cause frustration, reducing perceptions
of value and loyalty (Belli, et al., 2021). It may be the case that delayed rewards are better
19used for satisfactory experiences and high involvement
customers and instant rewards for dissatisfactory experiences
and low involvement customers (Keh & Lee, 2006; Yi & Jeon,
Delayed rewards are 2003). For example, an instant (surprise) reward provided to
better used for plasma donors in-centre did not increase the likelihood of
satisfactory experiences returning but did encourage donors to return sooner (Chell,
and high involvement et al., 2021). Given that a positive donation experience is an
customers.
important predictor of donor return (Germain et al., 2007),
an instant reward may help to mitigate the impact of a
negative donation experience (e.g., longer than expected wait
times).
The effectiveness of a strict versus lenient redemption policy is an unsettled issue in the
literature. Some research finds evidence that controlling policies such as points expiry can
decrease behavioural and attitudinal loyalty (Noble, et al., 2014) and decrease customers'
satisfaction and motivation whilst creating frustration (Stauss, et al., 2005), all of which can
lead to lower purchases (Dorotic, et al., 2014). Others find that such policies increase
purchases by creating a time-pressure mechanism (i.e., “goal-gradient hypothesis”)
(Bazargan, et al., 2017; Kopalle & Neslin, 2003; Dorotic, et al., 2014).
In a blood donation context, the maximum number of
points accruable within a given time is capped by the
maximum number of donations someone can make
within that period. Further, BDOs operating within
the voluntary non-remunerated donation system are Including point expiration
limited by the economic value of rewards so that they (strict redemption policy) may
are not perceived as remuneration and coercive, and create a time-pressure
so reward value is also capped. As such, it remains mechanism that encourages
greater program engagement.
unclear as to whether allowing point accumulation to
expire (strict redemption policy) or continue (lenient
redemption policy) is more effective in a blood donation
context. Including point expiration in a blood donor
loyalty program may create a time-pressure mechanism
that encourages greater program engagement (e.g., point accumulation resets each year,
see Figure 7), than having no point expiration (see Figure 8), however, this requires further
investigation.
20Figure 7. Example of program with points expiry.
Figure 8. Example of program without points expiry.
Reward behaviour
Research shows that 97% of loyalty programs offer transaction-based rewards where the
consumer receives a reward in exchange for making a purchase (Taylor, et al., 2015);
awarding points per donation. In a longitudinal study of an Italian blood donor loyalty
program, Bilancini, et al (2021) found that donors donated more frequently when symbolic
medals were awarded based on the number of donations in addition to the number of
membership years. This is possibly due to long-time donors feeling obligated to repay the
gift of the medal or because the medal strengthens their self-image as a good donor and
reinforces behaviours consistent with that image (i.e., donation) (Bilancini, et al., 2021).
21Alternatively, membership-based rewards may strengthen donors’ role-identity, making
them more aware of their responsibility as a loyal donor (Bilancini, et al., 2021).
However, some loyalty programs also offer engagement-based rewards where the
customer is rewarded for completing activities such as taking online surveys, rating, and
reviewing establishments and referring friends to the program (Taylor, et al., 2015).
Although research is limited, BDOs can benefit from
offering engagement-based rewards because they
facilitate two-way communication between the
BDO and the donor (Taylor, et al., 2015).
Engagement-related activities could include
BDOs can benefit from offering commenting on social media posts, referring
engagement-based rewards and friends to a donation centre or completing
bonus points for joining the program. surveys. BDOs could also benefit from offering
Most rewards would be given based bonus points for joining the program because
on actual donations as well as the members who are artificially advanced towards
number of membership years. a goal exhibit greater persistence toward
reaching that goal and increase their purchase
frequency (Shelper, et al., 2019). In any case, it is
recommended that BDOs consider offering points
for each donation, years of membership and other
forms of engagement.
Reward visibility
Reward visibility refers to the salience of the reward to surrounding customers (Kim, et al.,
2021). In a commercial context, highly visible rewards increase status perceptions among
target customers (i.e., members) (Steinhoff & Palmatier, 2014), increasing their levels of
satisfaction and making them more likely to display loyalty (Jiang, et al., 2013; Steinhoff &
Palmatier, 2014). This effect is particularly strong when the reward is earned (Jiang, et al.,
2013). However, unearned preferential treatment in view of bystanders makes target
customers feel uncomfortable about being judged negatively (Jiang, et al., 2013). Therefore,
unearned rewards should be given in private rather than public. Using the example of a
program-wide prize draw, the winner’s name should not be disclosed to other members.
Public rewards can also decrease status perceptions and increase perceptions of unfairness
among bystanders which may lead to decreased loyalty (Steinhoff & Palmatier, 2014).
There is some evidence from the blood-incentive literature that donors increase their
donation frequency when they are rewarded with a public ceremony (Lacetera & Macis,
2010), but others find no effect (Bilancini, et al., 2021). These contradictory findings are
likely attributable to varying sample sizes and differing program designs (Bilancini, et al.,
222021). Some research finds that public recognition is viewed negatively by donors (Van
Dyke, et al., 2020; Chmielewski, et al., 2012). Crucially, the mechanism by which reward
visibility drives loyalty for prosocial behaviours appears to be different to consumption
behaviours in a commercial context. Several studies show that donors are hesitant to
accept rewards in public because doing so reduces the “image value” of the prosocial act
(Ariely, et al., 2009; Gao, 2017; White & Peloza, 2009; Denis, et al.,
2020). In other words, in addition to being altruistically
motivated, donors are partly motivated by others’ perceptions
and will try to gain their social approval (Ariely, et al., 2009).
Public recognition can raise suspicion about the true motives BDOs should generally
of the donor (Denis, et al., 2020), which, according to offer rewards
community norms and values, should be purely other-serving privately.
and altruistic (White & Peloza, 2009). On balance, whilst
reward visibility provides some benefits to target customers in
a commercial context, it tarnishes the reputation of blood donors
in a prosocial context and can make bystanders feel worse.
Therefore, BDOs should generally offer rewards privately.
Summary of managerial implications
Table 1 summarises the managerial implications of this literature review for the design of a
loyalty program for blood donation. In terms of country characteristics, BDOs should
consider how broad and more nuanced cultural values within their region could impact the
effectiveness of the loyalty program generally and design characteristics. Regarding
industry (market) characteristics, in donation systems with only one blood operator (e.g.,
Australia), a loyalty program could give blood donation a competitive advantage over other
prosocial activities. BDOs stand to benefit from using a donor loyalty program because it
may mitigate the otherwise high perceived risk, and low personal benefit (value-gained),
associated with giving blood.
As for design characteristics, existing research suggests that a closed, tiered, and multi-
vendor loyalty program design would improve effectiveness. Membership levels could be
based on donation frequency or time length as an active donor and higher tiers should
entail progressively higher value rewards. Donors should be given points based on number
of donations, membership years and other forms of engagement, with bonus points given
to new members to encourage continued engagement in the program. Where the point
exchange is simple, BDOs should opt for a low-magnitude program (e.g., small step size of
5 points per donation and small reward distance of 25 points), compared to a more complex
point exchange where a high-magnitude program is recommended. Finally, BDOs should
offer a combination of hard, mixed, and soft rewards, with direct (congruent) rewards and
those given privately likely preferred by donors.
23Table 1. Summary of managerial implications.
Characteristic Managerial implications
Country
Cultural factors • In addition to broad cultural values, BDOs should account for cultural nuances when designing a loyalty program.
characteristics
• BDOs stand to benefit from using a donor loyalty program because it may mitigate the otherwise high perceived risk, and low personal
Purchase frequency
benefit (value-gained), associated with giving blood.
Industry
characteristics • In donation systems with only one blood operator (e.g., Australia), a loyalty program could give blood donation a competitive advantage
Competition by increasing the value of the donation itself, such that individuals are more willing to spend their time (as a limited resource) donating
blood compared to other volunteering or leisure activities.
• A closed program offers blood donors a greater sense of belonging
Enrolment type • Eligibility criteria could be based on donation history, donation type, or blood type.
• When eligibility criteria are congruent (related) to the reward, bystanders feel more motivated to join.
• A tiered design may help to keep ‘loyal’ donors engaged, with each tier offering progressively higher value rewards.
Tiers
• Tiers (or membership levels) could be based on donation frequency or time length as an active donor
• BDOs would benefit more from a multi-vendor (vs single-vendor) design to increase the breadth of reward types available
Partnerships
• Sponsorship agreement will lower costs, however BDOs must carefully choose brand-aligned partners
• Ensure it is easy for donors to calculate the benefits, and understand what they need to do to unlock the next reward
• When point allocation is clear and simple, a low-magnitude program is recommended (e.g., small step size of 5 points per donation and
Reward exchange
small reward distance of 25 points).
value
• When point allocation is complex and ambiguous (e.g., increased variation in the number of points that could be earned per donation),
Design a high-magnitude program is recommended.
characteristics • BDOs should offer a combination of hard, mixed, and soft rewards.
Reward type
• Additional soft rewards could be offered to donors in higher membership levels.
• Direct (congruent) rewards are likely favoured by donors.
Reward fit
• BDOs could offer surprise rewards that are indirect.
• Delayed rewards are better used for satisfactory experiences and high involvement customers.
Reward redemption • Including point expiration (strict redemption policy) may create a time-pressure mechanism that encourages greater program
engagement.
• Most rewards would be given based on actual donations as well as the number of membership years.
Rewarded behaviour
• BDOs can benefit from offering engagement-based rewards and bonus points for joining the program.
Reward visibility • BDOs should generally offer rewards privately.
24Limitations and future research agenda
The commercial loyalty program and blood-incentive literature yield valuable insights into
how a donor loyalty program could be designed. However, existing research insights find
only limited applicability to a prosocial context and there remain many gaps in knowledge
that future research should address. Future research should seek to understand how
different design characteristics operate in the context of a donor loyalty program.
Following in the footsteps of Bilancini, et al. (2021), researchers should seek to understand
the long-term effects of loyalty programs and design characteristics, by analysing
longitudinal data (Chen, et al., 2021). As a starting point, research should focus on reward
type, reward fit, enrolment type and tiers because these characteristics likely have the
greatest impact on loyalty program effectiveness.
In terms of reward type, future research should shed light on the impact of soft, hard, and
mixed rewards on donors’ attitudinal and behavioural loyalty. Researchers should also
examine whether other variables/characteristics such as tier level and rewarded behaviour
have a moderating effect. As for reward fit, future research should seek to understand
which rewards donors consider to be direct and indirect. For example, despite initial
evidence that branded items such as t-shirts are indirect because they do not facilitate the
donation act (Chmielewski, et al., 2012), they may be direct if messages on the shirt clearly
encourage others to donate. Research in this area should also examine the degree to which
direct and indirect rewards induce feelings of manipulation or reinforce intrinsic
motivations.
Regarding enrolment type, should the eligibility criteria for closed programs be based on a
minimum number of donations, donation type (whole blood, plasma, or platelets) or blood
type? As an example, it might be better if O negative donors are admitted to a special
program. Should BDOs have a tiered program where better tiers entail better rewards,
given that the number of donations per year is capped? If so, should membership level be
based on number of donations or time length as an active donor? These are all questions
currently being considered by BDOs and future research should endeavour to provide
answers.
Further, it remains unclear as to whether a strict or lenient point redemption policy can
improve blood donor engagement in the loyalty program. If points expire each year, does
this motivate donors to track progress more actively, and donate more frequently to reach
higher reward goals? However, if points expire and donors forget to redeem, how does this
affect perceptions of the BDO and continued donation behaviour? If points can continually
accrue, but the reward value is capped (i.e., there is no added benefit to accrue over a
longer period), how does this impact the user experience of the loyalty program?
25As identified by Chen, et al. (2021), the effectiveness of many design features could be
contingent on culture and future research should study the moderating role of cultural
factors using established cultural theories such as Hofstede’s dimensions of national
culture. Furthermore, future research should study donor loyalty programs in varying
market settings and consider the moderating role of contextual factors such as economic
conditions and technological infrastructure (Chen, et al., 2021).
Conclusion
This report provides a review of the commercial loyalty program and blood-incentive
literature and provides recommendations for how an effective donor loyalty program
should be designed. It seems that a donor loyalty program holds promise as a way for BDOs
to encourage existing donors to donate more frequently and as a viable alternative to
traditional incentive systems such as paid donation and blood banks. However, BDOs will
need to account for different country and industry characteristics when designing a loyalty
program and some design characteristics may be more suitable than others. Additionally,
BDOs should be mindful that existing insights stem mostly from the commercial literature,
meaning certain design characteristics may operate differently in a prosocial context.
Nonetheless, we hope this research proves useful to BDOs and will inspire further research
on loyalty programs for blood donation.
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