Take it or leave it: Using regulatory fit theory to understand reward redemption in channel reward programs

• We demonstrate a method for improving member investment in Channel Reward Programs based on Regulatory Fit Theory.
• Fit effects result from an interaction between reward type and presentation format.
• Reward-presentation style fit influences resellers' perceptions of reward value and point redemption rate.
• Verbal formats are best for promotion focused rewards, numerical formats are best for prevention focused rewards.
• Cognitive engagement and feeling right mediate effects of fit on point redemption by impacting on probabilistic judgments.

Channel Reward Programs (CRPs) facilitate relationship management within reseller networks in distribution channels, yet a persistent problem is that rewards are not seen as valuable, which can reduce program investment. By applying Regulatory Fit theory, to understand how to sustain goal orientation (promotion or prevention) and stimulate task engagement through a match with the manner of goal pursuit, this study demonstrates that the presentation style suppliers adopt influences resellers' perceptions of reward value and their rate of point redemption with respect to CRPs. Two field studies demonstrate the mechanisms driving this effect. First, fit effects result from the interaction between reward type and presentation format (i.e., verbal vs. numerical) and affect perceived reward values and investment decisions. Second, cognitive engagement and “feeling right” about reward redemption mediate the effects of fit on investment opportunity evaluations. In turn, the findings demonstrate that CRP efficacy can be enhanced by stimulating regulatory orientations that match the presentation formats of the reward and that the dual affective–cognitive processes affect probabilistic judgments of rewards. This additional mechanism can further stimulate resellers' engagement with and investment in CRPs within complex decision-making contexts.