Effectiveness of loyalty programs

With the steady growth of interest in loyalty programs by both retailers and consumers, creating the right program is more important than ever. However, with an increasing number of decisions and designs, adopting a loyalty program has never been more complex. This dissertation aims to provide a better understanding on loyalty programs, and consists of three essays that study the effectives of loyalty programs from three different perspectives. The first essay focuses on the effectiveness of permanent programs, and investigates whether loyalty programs with a certain design, at a certain retailer, or in a certain country perform better. The second essay looks at the effect of the increasingly popular temporary programs, in which consumers have limited time to save stamps and redeem highly discounted rewards. These programs often run alongside the retailers’ permanent loyalty programs in an attempt to increase customer engagement. The third essay studies the effect of loyalty-program promotions, where brand manufacturers try to capitalize on retailers’ temporary loyalty programs. This essay provides a contingency framework for the effects of promotion designs, brands, categories, and competitive loyaltyprogram
promotion environments.