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Rewards Programs and Customer LoyaltyRewards Programs and Customer Loyalty

Airlines, casinos, hotels, grocery chains — they all have rewards programs intended to build customer loyalty. But do they accomplish their goal?

Consumer psychologist Michael McCall is the lead author of the report “Building Customer Loyalty: Ten Guiding Principles for Designing an Effective Customer Reward Program.” He says too many programs give away rewards that the customer would have purchased anyway.

“Most rewards programs are driven by what the competition offers, rather than demonstrated effectiveness,” says McCall. “As such they fail to pay attention to customer psychology and desires.”

A professor of marketing and law at Ithaca College, McCall is also a visiting scholar at the Cornell University School of Hotel Administration, where he produced the study for the Center for Hospitality Research.