Wharton Article on Loyalty Programs
 

http://knowledge.wharton.upenn.edu/a...TOKEN=28509861


Interesting article "The Lowdown on Customer Loyalty Programs: Which Are the Most Effective and Why"

Thank you for the reference, I enjoyed reading that.

http://knowledge.wharton.upenn.edu/a...TOKEN=28509861

clickable.. because i couldnt even copy in one go, i had to copy, paste, scroll, copy, paste..

interesting article, its more academic than actually discussing specific programs though.

edit - whoa the stuff linked is in depth, as discussed below

I agree. Thanks for the post. The article was interesting and worth reading, though probably too academic in nature to be of much use to airlines, hotel chains and all of us FT members who enjoy kibbitzing on whether a particular loyalty program's features make sense or not.

Thanks, interesting reading. Here's a link to the PDF version.

Fantastic article...and I relish the academic viewpoint (free of beancounter clutter) on these interesting topics. Another article, albeit somewhat meatier, is linked from the first - titled ''Using Combined-Currency Prices to Lower Consumers' Perceived Cost", it delves deep into the psychological motivators of price/cost perception at the consumer level.

As loyalty program insiders, many of us experienced participants would probably be looking in the mirror somewhat as the paper discusses cost perception and our reactions to it. I find their thesis fascinating and true - how many of us when faced with a choice between $800 or 60,000 FF miles would choose to spend $400 and 30,000 FF miles instead? Our perceived cost from both currencies is reduced, even though we're actually paying about the same.

At 51 pages, it's long - but a very interesting read.

Sorry about the botched link...I've fixed it.

Thought it was interesting how 'we' perceive spending miles & money (rather than just miles) as being "less expensive". Wish more FF programs offered this redemption option besides CO.

That's my school! ^

Alaska offers this also, the AS50 award is 15,000 miles for a 50% fare reduction, up to a $250 reduction.

AA used to, but they stopped a couple years ago. Though not US based, BA and BMI both do.

The article is interesting, but I think it's a bit of an oversimplification of certain things. It strikes me as trying to stuff a very complicated model into a very simple form, which usually creates a situation in which the author forces examples to fit a certain theory instead of choosing examples that support that theory.

Nunes was one of my Marketing professors at USC.

Theory, shmeerie. I like flexibility. Try putting an "shm" in front of that! I like being able to mix and match miles with cash, primarily for u/g's to F on discounted Y fares. HA Platinum status is fantastic for that!

interesting stuff. thanks.

My thanks for the links to the articles, too, now that I've finally had the chance to sit down and read them.

If I were running an airline or hotel, though, I would hope that this is exactly the sort of thing that my loyalty scheme managers were reading. Although not all of the supportable propositions would necessarily translate into viable options in any given real world situation, I'd hope that they'd be keeping abreast of underlying theory and research as part of their jobs.

Well, I once worked at BCG (Boston Consulting group) in their marketing dept and did some recruitment ads for Wharton, so um maybe that puts me close to being in the club, hehehe, but I did like this article so TYVM!

I also liked the part that says,

"After World War II, dozens of companies began trying to outdo each other, offering double, triple and ultimately quadruple stamps. The escalation ultimately led to the stamps' demise. By the mid-'60s, supermarkets started offering straight discounts instead to cut out the middleman."

Sounds SOOO familiar to the current airline award devaluation we are all living with today!


Then I scanned some of the articles they refer to, which are found at these links:

http://www.xdreze.org/Publications/bundled.html

http://www.xdreze.org/Publications/pseudo.html

http://www.xdreze.org/Publications/IJRM.html



Plus, I think I'm smahhht cuz I wrote pretty much this very same thing in another post in FT a while ago! I'll like find it if you need proof! hehehe
AND, maybe some of you recognize my attempt to be like the Wall Street Journal by using " * * * " to separate my notes here. ;):D :)

"If you go back 10 or 15 years, a gold card was really special," Drèze says. "Today, if you don't have a platinum card, which confers greater status than gold, you're nobody. The interesting thing is that what has evolved over time is that more and more customers need status. Marketers need to find ways to separate one class of customer from another."

;)MM
(ok I didnt spell check me post)

"flexibility, shmexibility". or... was it "like, shmike"? or perhaps "that, shmat"?

Shmerry Shmistmas!

- Kilo