2001RePEc: Research Papers in EconomicsOpen access

Creating effective loyalty programs knowing what (wo-)men want

Valentyna Melnyk

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Abstract

Loyalty programs started to boom in the late 1990s, under the main premise that it is cheaper to keep existing customers than to attract new ones. However, despite their popularity, many loyalty programs are ineffective and fail to stimulate the desired loyalty of customers. Therefore, the debate whether loyalty programs actually enhance customer loyalty still continues among marketing scientists and practitioners. The main goal of this dissertation is to identify factors that make loyalty programs work. The dissertation consists of three independent projects. The first project studies gender differences in customer loyalty. The second project suggests how the design of a loyalty program can be changed to account for gender differences in loyalty. The third project investigates the effect of utilitarian (discounts, savings) and non-utilitarian (diversification between members and non-members, personalized attention) elements of a loyalty program on customer loyalty. The dissertation proposes recommendations on how loyalty programs can be improved knowing what (wo-)men want.

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What this paper is about

Loyalty programs started to boom in the late 1990s, under the main premise that it is cheaper to keep existing customers than to attract new ones. However, despite their popularity, many loyalty programs are ineffective and fail to stimulate the desired loyalty of customers. Therefore, the debate whether loyalty programs actually enhance customer loyalty still continues among marketing scientists and practitioners. The main goal of this dissertation is to identify factors that make loyalty programs work. The dissertation consists of three independent projects. The first project studies gender differences in customer loyalty. The second project suggests how the design of a loyalty program can be changed to account for gender differences in loyalty. The third project investigates the effect of utilitarian (discounts, savings) and non-utilitarian (diversification between members and non-members, personalized attention) elements of a loyalty program on customer loyalty. The dissertation proposes recommendations on how loyalty programs can be improved knowing what (wo-)men want.

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Available abstract

Loyalty programs started to boom in the late 1990s, under the main premise that it is cheaper to keep existing customers than to attract new ones. However, despite their popularity, many loyalty programs are ineffective and fail to stimulate the desired loyalty of customers. Therefore, the debate whether loyalty programs actually enhance customer loyalty still continues among marketing scientists and practitioners. The main goal of this dissertation is to identify factors that make loyalty programs work. The dissertation consists of three independent projects. The first project studies gender differences in customer loyalty. The second project suggests how the design of a loyalty program can be changed to account for gender differences in loyalty. The third project investigates the effect of utilitarian (discounts, savings) and non-utilitarian (diversification between members and non-members, personalized attention) elements of a loyalty program on customer loyalty. The dissertation proposes recommendations on how loyalty programs can be improved knowing what (wo-)men want.

Key concepts: Loyalty, Loyalty program, Loyalty business model, Marketing, Popularity, Business, Premise, Boom

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