The following reviews and summaries of articles highlight some of the major academic findings on customer loyalty.
The following are some of our favorite and most-respected authors on the topic of reward programs and customer loyalty. The older reviews were collected and created from 2005 to 2007, but their learnings are as relevant today as they were when they were written. (Source: Customer Loyalty Programs: What Makes an Effective (Community-based) Program, MBA Thesis, 2007).
“Your Loyalty Program Is Betraying You” (Harvard Business Review; April 2006)
In this excellent and very well-written article, Nunes and Dréze identify five main objectives, five critical components and five common mistakes of loyalty programs. The authors give a broad overview of loyalty programs and present what an effective program should look like. Click here for more. …
The Loyalty Effect (Bain & Company, 1996)
This author is the original proponent of loyalty programs, whose 1996 book sparked initial debate regarding the merits of both reward programs and loyalty in general. No examination of customer loyalty would be complete without a look at Reichheld. His book, The Loyalty Effect, was comprehensive, insightful and something subsequent writers refer to extensively. Click here for more. …
“Do Reward Programs Really Create Loyalty?” (Harvard Business Review, May 1995)
Written by Bain & Company colleagues of Frederick Reichheld, this was a valuable article famous for identifying five key components of successful reward programs: (1) the cash value of redemption rewards, (2) the range of choice of rewards, (3) the aspirational value of rewards, (4) relevance (or the perceived likelihood of achieving rewards), and (5) convenience (or the ease of use of reward schemes). Click here for more. …
“Effects of Loyalty Programs on Value Perception, Program Loyalty, and Brand Loyalty“ (Seoul National University, Korea)
The article by Yi and Jeon (2003) is comprehensive and builds extensively on the works of previous academic articles, including that of O’Brien & Jones (1995). It is supported by solid empirical studies on reward programs. Click here for more…
“Loyalty Myths: Hyped Strategies That Will Put You Out of Business and Proven Tactics That Really Work
V. Kumar recommends Keiningham et al.’s 2005 book Loyalty Myths as “a must read for every executive who is interested in reshaping their loyalty programs” and he wrote that he had “no doubt that this book will revolutionize the thinking behind the loyalty concept”. Click here for more. …
Clive Humby & Terry Hunt (with Terry Hunt)
Scoring Points: How Tesco is Winning Customer Loyalty (2006)
No formal review or summary on this book from us, other that saying that this is a must read for any business thinking about starting up a large scale reward program (or any kind of grocery store related loyalty scheme for that matter). Tesco has been a leader in reward programs and customer loyalty, and this book describes how this UK grocer got there.
For a list of more articles and resource materials (sans reviews), click here for our list of Bibliographical References.