Customers who declared a goal resulted in increased purchase behavior.
The increase in spending ranged from a low of 22% and a high of 68% for each of the two-week periods analyzed over the eight-week period of the study.
Loyalty Programs should allow customers to choose how he or she would like to receive rewards and designate that some rewards must be instant and some delayed.
Low-spending customers can be activated by inviting them to declare their instant reward preferences.
Increased purchase behavior was strongest for the lowest spending customers and weakest for the highest spending customers.
Loyalty programs should consider a tiered reward model. For example, if a firm could project what a customer’s accumulation
rate would be (e.g. high, medium, or low) based on demographics when he or she signed up (e.g. gender, age, location, etc.), the firm could immediately offer the kind of reward (e.g. instant or delayed) that would most effectively motivate loyalty.