What is a loyalty card?


A loyalty program is usual system of rewarding customers, usually tied to a plastic card. There is a point of view that loyalty programs exploit customers more than they provide benefits. Is this true? Let's try to find out.

Loyalty cards. Are they worth it?


If you live in a big city, you probably have a lot of loyalty cards from retail chains and branded stores. However, the vast number of discount and bonus cards has become a problem for consumers. Digital loyalty cards have emerged as a solution, but there have also become so many of them that the problem of an overabundance of cards persists.

How to get the best supermarket loyalty card? Loyalty cards comparison


Serious competition among food retailers has led to competition of loyalty programs. The best-known loyalty cards belong to three large grocery chains - Tesco, Lidl, Iceland and Sainsbury's Nectar. These supermarkets offer large-scale loyalty programs and provide their customers with the widest range of goods.

Loyalty program: From Nudge to Big Nudging


Loyalty program as a strategy to keep clients in a hyper-competitive environment is part of nudge theory. Nudge theory, or libertarian paternalism, was proposed as a new kind of economic policy in 2008 by economist Richard Thaler in collaboration with legal scholar Cass Sunstein. But now individuals making choices they would not otherwise have made, such as buying some overpriced or unnecessary goods. In other words, Nudge turns into Big Nudging.

Loyalty Programs: Customer Factors


Several factors influence the success of the loyalty program, among which the role of the customer is important. The customer is a subject of modern society, which is included in an extensive network of communications, economic and information flows.

Structure of Loyalty Program’s Rewards


To understand the loyalty program, it is important to understand the role of rewards offered to consumers. Reward is directly related to the consumer's sense of satisfaction, so the structure of rewards should be in line with the task of producing it. To analyze the structure, it can be conventionally divided into such parts as type of rewards, size, frequency and representation.

Loyalty Program Tiers


Many loyalty programs are based on a multi- tiers structure - from 1 and 2-3 tiers to 10 tiers and more. For example, tiered program AliExpress now has 4 tiers - Silver, Gold, Platinum, Diamond. The very idea of dividing into tiers is based on the Pareto principle, also known as the 80/20 principle (20% of clients contribute the most to the firm's revenue).

Conceptual Model of Loyalty Program Effectiveness


The main factors of the loyalty program effectiveness fall into three main groups: 1. the structure of the loyalty program, 2. the structure of the rewards, and 3. consumer fit with the loyalty program.

Loyalty Programs – Positive and Negative Results


Numerous empirical researches reveal mixed evidence of the impact of loyalty programs on loyalty per se. Somel studies have found the positive impact of retail loyalty programs on customer behavior, while other studies have found that loyalty programs have no impact. This heterogeneity in the conclusions leads to a double evaluation of the very phenomenon of the loyalty program, and to criticism of its structures.

Loyalty programs in developing new social identity


Loyalty programs are sustainable economic schemes that offer deferred, accumulating benefits to the consumer. Social identity theory shows the relationship between a client's positive perception of the brand and a sense of self-confidence. It can be seen that loyalty programs influence the formation of new social collective identity. On the other hand, collective identity is used as a positive argument for the recruitment of new customers by the company.