Loyalty program planning and analytics

Abstract

PurposeThe paper aims to review and critique the current state of loyalty program planning and analytics, highlighting a number of process and methodological deficiencies.Design/methodology/approachA general loyalty program planning approach is outlined, designed to build a foundation for a profitable loyalty initiative.FindingsThe paper demonstrates the importance of robust customer insights to program planning and its ongoing management; it also challenges the accuracy of the conventional buyer loyalty measurement approach. In particular, the paper highlights the flaws of the dichotomous loyalty classification which makes often unreasonable category purchase requirements assumptions.Originality/valueThe alternative to the loyal customers vs brand switchers buyer categorization is offered, which allows customers to be single‐brand loyal, multi‐brand loyal or brand switchers. An explicit brand buyer loyalty categorization is presented, built around explicit differentiation between repurchase exclusivity and brand loyalty.