Do Loyalty Programs Increase Brand Loyalty ?

Do loyalty programs really affect consumer loyalty ? What effect do loyalty programs have ?

Back in 1997 Anne Sharp and I published the first empirical evaluation of a large scale loyalty program:

Sharp, Byron; Sharp, Anne (1997) “Loyalty Programs and their Impact on Repeat-purchase Loyalty Patterns”, International Journal of Research in Marketing, Vol 14, No. 5, p.473-486.

By using Dirichlet benchmarks we were able to assess the loyalty program’s affect on repeat-buying while avoiding the problem of self-selection (i.e. more loyal buyers of the brand are more likely to join the program). We documented weak effects.

Since this study we, and others have done more work. All using real world panel (i.e. individuals repeat buying) data. This evidence will be brought together in a forthcoming report, and possibly a chapter in my forthcoming book “Laws of Growth”.

3 thoughts on “Do Loyalty Programs Increase Brand Loyalty ?

  1. I read your seminal research years ago and found it as relevant in 1997 as it is today. I am with a company called LoyaltyMatch whose goal is to provide liquidity to the loyalty program points/miles members. Allowing members to reward themselves with the rewards they desire. We agree with your hypothesis also held by other academics who espouse the mantra, ‘loyalty scores for each member program can be elevated thru repeat purchase behavior by combining the the value of numerous loyalty programs into a satisfied member outcome.’

  2. Pingback: Loyalty Program Misleading Effects « Marketing Science

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