On May 1, 1981, American Airlines launched its frequent flyer program AAdvantage. Since then, a flood of loyalty programs have attempted to bring customers back through rewards.
Today, you can become a card-carrying member of just about anything: hotels, supermarkets, drugstores and pizza chains. If you’re in a store, chances are someone will ask, “Would you like to join our rewards program?”
Marketing professors, store managers and executives are still not sure how effective these initiatives are. One puzzle is the link between participation and loyalty. It’s not that strong. Millions of Americans are enrolled in at least one loyalty program, but just a fraction of them are dedicated customers. Typically, loyalty programs work only to the extent that they reward customers who are already loyal.