Designing successful temporary loyalty programs: An exploratory study on retailer and country differences

Retailers increasingly adopt temporary loyalty programs (TLPs), in which consumers have limited time, often less than half a year, to save stamps and redeem highly discounted rewards. These run alongside the retailers’ permanent an attempt increase customer engagement. Despite growing popularity of TLPs, literature on topic remains limited. We address this gap by looking at redemption rate, industry’s primary success indicator, almost 900 TLPs across broad set grocery retailers 45 countries. study effects four key design characteristics (the duration program, discount offered, spending requirement before award can be redeemed, reward depth) explore how these vary range retailer country characteristics. In doing so, we control for both retailer’s potential self-selection into running TLP endogeneity subsequent choices. derive actionable results successful show that high rates are not only beneficial program operator manufacturer, but also translate higher sales profit retailer.