Do Customer Loyalty Programs Really Work?

Given the popularity of loyalty programs, they are surprisingly ineffective. To stand the best chance of success in tough market conditions, programs must enhance the overall value of the product or service and motivate loyal buyers to make their next purchase.

http://sloanreview.mit.edu/the-magazine/articles/1997/summer/3846/do-customer-loyalty-programs-really-work/

Loyalty Programs (in general)

Loyalty programs are often part and parcel of a comprehensive customer relationship strategy. So welcome to our loyalty marketing best practices section.

"As a customer's relationship with the company lengthens, profits rise. And not just by a little. Companies can boost profits by almost 100 percent by retaining just 5 percent more of their customers" - F.P. Reichheld

http://www.crmtrends.com/loyalty.html

The impact of airline service failures on travelers' carrier choice: a case study of central Iowa.

Abstract

Understanding air travelers' carrier choices is an important issue for airline managers. Using the survey data recently collected in central Iowa, this article examines how travelers' airline choices are affected by their past service failure experiences (e.g., seat denials or considerable flight delays) with the candidate airlines. The effects of service failure experiences on traveler choice probabilities are estimated separately for business and leisure travelers, and by type of service failures (seat denials, flight delays, and baggage mishandling). The results indicate that, for both business and leisure trips, travelers' airline choices may not be affected by any service failure experience. This condition implies that, in each trip occasion, travelers may choose the airlines that maximize their utilities without regard to past service failures. Although this behavioral pattern may seem somewhat counter-intuitive, it is consistent with the random utility theory.

http://www.entrepreneur.com/tradejournals/article/117772693.html

Surprise Finding: Satisfaction Overrated In Airline Loyalty

What makes air travellers loyal to one particular airline? Do comfortable seats, good food or friendly flight attendants change consumer preferences when it comes to picking an airline to fly with?














Surprisingly, it now seems that these factors have very little to do with airline loyalty. According to researchers at the University of Wollongong (UOW) in New South Wales, carriers wanting to attract loyal customers should actually shift their focus away from increasing customer satisfaction.
Professor Sara Dolnicar from UOW’s Institute for Innovation in Business and Social Research in the Faculty of Commerce said satisfaction with an airline’s performance was heavily overrated as the reason customers stay loyal to a particular airline.

http://www.eglobaltravelnews.com.au/airline/surprise-finding-satisfaction-overrated-in-airline-loyalty.html