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

In: Handbook of Marketing Decision Models

Author

Listed:
  • Tammo H. A. Bijmolt

    (University of Groningen)

  • Peter C. Verhoef

    (University of Groningen)

Abstract

To foster customer relationshipsCustomer relationships , firms have implemented so-called loyalty programs (LPs)Loyalty programs (LP) . 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 LPsLoyalty programs (LP) . 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.

Suggested Citation

  • Tammo H. A. Bijmolt & Peter C. Verhoef, 2017. "Loyalty Programs: Current Insights, Research Challenges, and Emerging Trends," International Series in Operations Research & Management Science, in: Berend Wierenga & Ralf van der Lans (ed.), Handbook of Marketing Decision Models, edition 2, chapter 0, pages 143-165, Springer.
    • Handle: RePEc:spr:isochp:978-3-319-56941-3_5
    DOI: 10.1007/978-3-319-56941-3_5
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    Citations

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    Cited by:

    1. Gabel, Sebastian & Guhl, Daniel, 2022. "Comparing the effectiveness of rewards and individually targeted coupons in loyalty programs," Journal of Retailing, Elsevier, vol. 98(3), pages 395-411.
    2. Bombaij, Nick, 2021. "Effectiveness of loyalty programs," Other publications TiSEM 095c506d-5b5c-4ea3-9b41-a, Tilburg University, School of Economics and Management.
    3. Panzone, Luca A., 2022. "Conditional Promotion With A Costly Reward: An Evaluation Of A Campaign To Motivate Consumption Of Fruit And Vegetables," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322058, Agricultural and Applied Economics Association.
    4. Christian F. Hirche & Tammo H. A. Bijmolt & Maarten J. Gijsenberg, 2022. "When Offline Stores Reduce Online Returns," Sustainability, MDPI, vol. 14(13), pages 1-26, June.
    5. Malika Chaudhuri & Clay M. Voorhees & Jonathan M. Beck, 2019. "The effects of loyalty program introduction and design on short- and long-term sales and gross profits," Journal of the Academy of Marketing Science, Springer, vol. 47(4), pages 640-658, July.
    6. Bombaij, Nick J.F. & Gelper, Sarah & Dekimpe, Marnik G., 2022. "Designing successful temporary loyalty programs: An exploratory study on retailer and country differences," International Journal of Research in Marketing, Elsevier, vol. 39(4), pages 1275-1295.
    7. Christino, Juliana Maria Magalhães & Silva, Thaís Santos & Cardozo, Erico Aurélio Abreu & de Pádua Carrieri, Alexandre & de Paiva Nunes, Patricia, 2019. "Understanding affiliation to cashback programs: An emerging technique in an emerging country," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 78-86.
    8. Yoonseock Son & Wonseok Oh & Sang Pil Han & Sungho Park, 2020. "When Loyalty Goes Mobile: Effects of Mobile Loyalty Apps on Purchase, Redemption, and Competition," Information Systems Research, INFORMS, vol. 31(3), pages 835-847, September.
    9. Bies, Suzanne M.T.A. & Bronnenberg, Bart J. & Gijsbrechts, Els, 2021. "How push messaging impacts consumer spending and reward redemption in store-loyalty programs," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 877-899.
    10. Andy Chin Woon Fook & Omkar Dastane, 2021. "Effectiveness of Loyalty Programs in Customer Retention: A Multiple Mediation Analysis," Jindal Journal of Business Research, , vol. 10(1), pages 7-32, June.
    11. Bies, Suzanne, 2022. "Examining the effectiveness of activation techniques on consumer behavior in temporary loyalty programs," Other publications TiSEM ade86df3-4846-4318-938f-a, Tilburg University, School of Economics and Management.

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