The Economics of Loyalty Programmes
Loyalty Programmes: Recap
A recap of how loyalty schemes work and what they cost.
This lesson reviews the module.
Function
Retention, data and segmentation.
Funding
Merchants, breakage and interest from other customers.
Psychology
Status and goal gradients keep customers engaged.
Advice
Know the real value and protect your data.
Reading the terms
Look at expiry, redemption limits and how points are valued.
Ignoring the small print
Terms can change.
Key takeaways
- Loyalty schemes serve firms.
- Rewards are funded by someone.
- Psychology plays a role.
- Be a smart customer.
No recording for this one yet - EconReader can read it aloud for you.