To foster customer relationships, firms have implemented so-called loyalty programs (LPs). These programs provide monetary benefits (e.g. through direct discounts or rewards) and/or more soft benefits by focusing on creating commitment to the firm among customers through excellent service or giving special treatment to customers. In this chapter, we present a framework of three mechanisms underlying the LP effect. Next, we incorporate a discussion of relatively under-researched areas, such as reward redemption effects and so-called short-term LPs. We discuss models that can be used to examine LP effects and to analyze customer data to support marketing decisions. Finally, we provide a discussion on emerging topics in LPs, specifically addressing increasing digitalization, empowered customers, and the prevalence of big data. We conclude with a discussion on some pressing research questions.
CITATION STYLE
Bijmolt, T. H. A., & Verhoef, P. C. (2017). Loyalty programs: Current insights, research challenges, and emerging trends. In International Series in Operations Research and Management Science (Vol. 254, pp. 143–165). Springer New York LLC. https://doi.org/10.1007/978-3-319-56941-3_5
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