Frequency Reward Programs

  • Robert C. Blattberg
  • Byung-Do Kim
  • Scott A. Neslin
Part of the International Series in Quantitative Marketing book series (ISQM, volume 18)


Frequency reward programs are customer development programs based on the theme, “Buy XXX, get a reward.” “XXX” is usually a required purchase volume, and the reward can be free product, a cash rebate, or even “points” for another company's reward program.We discuss two ways that reward programs increase sales — points pressure and rewarded behavior — and the empirical evidence for each. We then review the rich economics literature that has endeavored to answer the question, “In a competitive environment, do reward programs increase firm profits?” We review several issues in designing reward programs, including the reward structure, and conclude with a review of reward programs offered by firms including Harrah's Entertainment and Hilton Hotels.


Credit Card Point Pressure Customer Behavior Personalized Marketing Light User 


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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • Robert C. Blattberg
    • 1
    • 2
  • Byung-Do Kim
    • 3
  • Scott A. Neslin
    • 4
  1. 1.Kellogg School of ManagementNorthwestern UniversityEvanstonUSA
  2. 2.Tepper School of BusinessCarnegie-Mellon UniversityPittsburghUSA
  3. 3.Graduate School of BusinessSeoul National UniversitySeoulKorea
  4. 4.Tuck School of BusinessDartmouth CollegeHanoverUSA

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