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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)

Abstract

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.

Keywords

Credit Card Point Pressure Customer Behavior Personalized Marketing Light User 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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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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