Do Loyalty Programs Work?
Two large-scale scientific studies offer evidence on loyalty program impact and optimal design considerations
Loyalty programs are popular, yet their impact can be notoriously difficult to assess. Many businesses are uncertain how much these programs truly contribute to their bottom line, despite US consumers being quite fond of loyalty programs and being active in an average of 6.7 such programs.
Two large-scale academic studies published in top marketing journals may offer some answers to these concerns. Together, the two studies analyzed the financial impact of 567 loyalty programs across five industry sectors in multiple countries. This article looks at what the studies found.
Overview of the Studies
Cross-Sector Loyalty Program Study
In the first study published in the Journal of the Academy of Marketing Science, Professor Chaudhuri from University of Dayton and her co-authors looked at 1,816 publicly traded companies in retail, entertainment, hospitality, telecommunication and information, and food and beverages sectors. Here is a breakdown of the companies by sector and by loyalty program status.
