Developing Cost-Effective Brand Loyalty Programs
Journal of Advertising Research, 43:3 (September 2003), 301-309
27 Pages Posted: 10 Jan 2016
Date Written: January 16, 2003
What makes a brand loyalty program successful? In depth interviews of 41 experts were conducted to establish the best practices of brand loyalty programs. Following this, Study 1 examines three types of programs (small, moderate, and large benefit programs) for three segments of consumers (non-, light-, and heay-users). Using 132 brand managers, Study 2 shows why current thinking keeps brand loyalty programs from being more successful. The results indicate that loyalty programs offering only small or moderate benefits may be the most reasonable means to motivate current users to increase purchases. In the short run, programs offering anything more may be less cost effective.
Keywords: Loyalty programs, efficiency, consumer behavior, consumer retention, profitability, purchase behavior, marketing, consumer research, social psychology
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