What do we know about loyalty programs?

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Loyalty.pdf(186.04 KB)
Accepted manuscript
Date
2023-06-07
DOI
Authors
Karaca, H. Sami
Zagorsky, Jay
Version
Accepted manuscript
OA Version
Citation
H.S. Karaca, J. Zagorsky. 2023. "What Do We Know About Loyalty Programs?" Insights: Consumer Neuroscience in Business, Issue 41, pp.4-6.
Abstract
Loyalty and rewards program currently abound with every major hotel chain, airline, and car rental company having one. These programs are not just in the travel industry. Major supermarkets, restaurants, coffee shops and movie theaters also have them. Loyalty programs are not only ubiquitous, but some are very profitable. In 2022 Delta, United and American Airlines reported they earned a combined $8.4 billion from their loyalty program, which was greater than the three airlines combined operating income. This money primarily comes from co-branded credit cards that give users airline miles based on their spending. Data from Google’s Ngram program gives us the ability to see when people start using phrases. “Loyalty Program” and “Loyalty Rewards” were rarely used in English in the 1980, exploded in usage starting in the mid-1990s, and have not waned since. The falling cost of computers and data processing is making sophisticated rewards program available even to the smallest size companies.
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