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Multi-tier Loyalty Programs to Stimulate Customer Engagement

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Customer Engagement Marketing

Abstract

Customers differ in their purchase behavior, profitability, attitude toward the firm, and so on. These differences between customers have led to numerous firms introducing multi-tier loyalty programs. A multi-tier loyalty program explicitly distinguishes between customers by means of hierarchical tiers (e.g. Silver, Gold, Platinum) and assigns customers to different tiers based on their past purchase behavior. Next, customers in different tiers are provided varying levels of tangible rewards and intangible benefits, which are potentially powerful instruments to stimulate customer engagement. In this chapter, we focus on the design and effectiveness of such multi-tier loyalty programs. Building on loyalty program and customer prioritization research, we discuss whether, why, and how multi-tier loyalty programs are effective (or not) in influencing customer behavior, thereby enhancing customer engagement and financial performance.

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Author information

Authors and Affiliations

  1. University of Groningen, Groningen, Netherlands

    Tammo H. A. Bijmolt

  2. University of Münster, Münster, Germany

    Manfred Krafft

  3. University of Zaragoza, Zaragoza, Spain

    F. Javier Sese

  4. Northwestern University, Chicago, IL, USA

    Vijay Viswanathan

Authors
  1. Tammo H. A. Bijmolt
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  2. Manfred Krafft
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  3. F. Javier Sese
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  4. Vijay Viswanathan
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Editor information

Editors and Affiliations

  1. Foster School of Business, University of Washington, Seattle, Washington, USA

    Robert W. Palmatier

  2. Georgia State University, Atlanta, Georgia, USA

    V. Kumar

  3. Florida State University, Tallahassee, Florida, USA

    Colleen M. Harmeling

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Bijmolt, T.H.A., Krafft, M., Sese, F.J., Viswanathan, V. (2018). Multi-tier Loyalty Programs to Stimulate Customer Engagement. In: Palmatier, R., Kumar, V., Harmeling, C. (eds) Customer Engagement Marketing. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-61985-9_6

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