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Loyalty Programs: Current Insights, Research Challenges, and Emerging Trends

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Handbook of Marketing Decision Models

Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 254))

Abstract

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.

Author order is alphabetical; both authors contributed equally to this chapter. We thank the editors and two anonymous reviewers for their helpful comments.

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Notes

  1. 1.

    See https://www.ama.org/resources/Pages/Dictionary.aspx.

  2. 2.

    See https://www.capgemini-consulting.com/reinventing-loyalty-programs.

  3. 3.

    We gratefully thank Milan Schnorrer, a past graduate of the M.Sc. Marketing program at the University of Groningen, for sharing this case, which he discussed in a guest lecture in the M.Sc. Marketing course customer management (Schnorrer 2015).

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Authors and Affiliations

  1. Faculty of Economics and Business, Department of Marketing, University of Groningen, P.O. Box 800, 9700 AV, Groningen, The Netherlands

    Tammo H. A. Bijmolt & Peter C. Verhoef

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  1. Tammo H. A. Bijmolt
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  2. Peter C. Verhoef
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Correspondence to Tammo H. A. Bijmolt .

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Editors and Affiliations

  1. Rotterdam School of Management, Erasmus University, Rotterdam, South Holland, The Netherlands

    Berend Wierenga

  2. Department of Marketing, Hong Kong University of Science and Technology, Kowloon, Hong Kong

    Ralf van der Lans

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Bijmolt, T.H.A., Verhoef, P.C. (2017). Loyalty Programs: Current Insights, Research Challenges, and Emerging Trends. In: Wierenga, B., van der Lans, R. (eds) Handbook of Marketing Decision Models. International Series in Operations Research & Management Science, vol 254. Springer, Cham. https://doi.org/10.1007/978-3-319-56941-3_5

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