What it is and what it means to manage your promotions

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Last month, Panera Bread celebrated Earth Month with sweepstakes for a limited edition Bread Bowl Bike. This month, LEGO VIP Rewards is honoring Star Wars Day (“May the 4th Be With You”) with sweepstakes for a one-of-a-kind LEGO Star Wars “Dutch” Vander mini-figure and photo signed by actor Angus MacInnes. Now for Mother’s Day, the Today show is giving away a $145 cooking pan.

Sweepstakes and random rewards like these are used often by businesses. They are an important part of gamification strategies.

How do consumers respond to these tactics?

A research paper published in the Journal of Consumer…

Evidence from a multi-sector coalition loyalty program

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What do Air Miles, Bumped, PAYBACK, Plenti, and the S&H Green Stamps have in common?

Although these loyalty programs come from different eras and different geographic regions, they share one common design component: instead of being offered by a single or dominant firm, the programs allow members to earn points (or stamps) by buying from a large number of businesses in the alliance.

These loyalty programs are called coalition loyalty programs or multi-vendor loyalty programs. …

Six signals loyalty research says you should look for

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Consumers belong to a lot of loyalty programs, but they are only active in less than half of those programs. This low engagement problem is likely even more serious during the pandemic, as health concerns have prompted consumers to stay away from some business establishments altogether.

In our recent contribution to the Wise Marketer, Dr. Yuping Liu-Thompkins, Director of the Loyalty Science Lab, predicted that in 2021 we will see “an increase in focus on non-purchase member engagement activities such as redemptions, digital interactions, and virtual experiences.”

The question is what…

What a choice game tells us about consumer strategies, market outcomes, and optimal designs

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How many loyalty program tags do you have on your key chain, or loyalty apps on your phone? One? Two? How about a dozen?

The 2020 Loyalty Report from Bond Loyalty says that US consumers on average belong to 14 loyalty programs.

When loyalty programs are that common, competition is bound to happen. Consumers are likely to be loyalty program members of multiple companies that directly compete with each other. In some sectors such as credit cards, restaurants, and travel, this competition can get pretty intense.

How do consumers choose among these competing programs?

A recently published research study in…

What we learned from a retail field experiment and an airline study

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Sophia is a member of a reward program. It’s almost the end of the year. She is only a base tier member at the moment, but she’s getting pretty close to the Silver tier. To get there, Sophia needs to make one or two additional purchases before the year is over.

Making it to the Silver tier would make Sophia happy. She will be able to enjoy all the perks reserved for Silver members in the coming year.

A happy Sophia is good in the long run for…

Evidence-based advice on leveraging the power of appreciation

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Thanksgiving is right around the corner. Although many businesses are preoccupied with Black Friday and Cyber Monday sales during this time, some are quietly sending out words or gifts of appreciation to their loyal customers.

For the last 50 years, the insurance company Amica has been sending out artistically designed Thanksgiving cards to their customers every year. This year, they’ve also created an e-card, featuring original art by Del-Bourree Bach and poem by Julia Meylor, who also happens to be a retired Amica employee.

Alongside the e-card, Amica pledges to donate $1 to Feeding Children Everywhere for every share of…

An in-depth conversation with two Teradata retail analytics experts

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The COVID-19 pandemic has brought significant disruptions to the retail industry. Store shutdowns, supply chain issues, and changing consumer behaviors are all creating challenges for retailers. What has really changed? How should retailers adapt their analytics to the new reality?

To find the answers to these questions, our Lab Director, Dr. Yuping Liu-Thompkins, spoke with two retail analytics experts from Teradata:

  • Dr. Bonnie Holub, Managing Partner, Data Science, Americas. Dr. Holub has a Ph.D. in artificial intelligence. She has spent her career correlating different sets of big data for actionable result…

Delivering small doses of delight to earn long-term customer loyalty in a problem-filled environment

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The COVID-19 pandemic has posed unprecedented challenges to customer experience management. At first, supply chain disruptions made the fulfillment of customer orders difficult. Then restrictions on physical contact and social gatherings brought in-person customer engagement to a halt.

Although many businesses have pivoted to the digital channel, bridging offline and online customer experience is fraught with obstacles and complications. Many companies today are facing a “many fires, few solutions” reality.

Consumers are feeling this reality in their purchase experience. A recent consumer survey found that a…

Only one of them involves monetary value

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According to the 2020 State of Loyalty Report from Bond Loyalty, US consumers belong to an average of 14 loyalty programs but are only active in about half of them. What makes consumers actively participate in some programs and not others? First and foremost, consumers need to see value in using the program; not just monetary value, but the overall value provided by the program.

If your business offers a loyalty program, you must regularly audit the value provided by your program in order to create sustained engagement with your current and potential…

Leveraging reward distance psychology in loyalty program management

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Working toward a reward in a loyalty program is a lot like running. There’s a starting line, where zero point stands. There’s also a finish line, where the reward is. As people earn more points toward the reward, they get closer and closer to the finish line.

For loyalty program managers, it pays to know how members may think and react differently at different places along the path, and how program promotion and communication should be adapted accordingly.

In this article, we explain three known psychological effects of reward distance based on…

Loyalty Science Lab

We are a university research lab devoted to scientific research on brand/customer loyalty. Follow us at https://www.linkedin.com/showcase/loyalty-science-lab

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