REFLECTION TASK - LOYALTY PROGRAM DIARY
Reiter
REFLECTION TASK ON E-LECTURES 5-8: YOUR LOYALTY PROGRAM DIARY
Task: Select a loyalty program of your choice and make a step-by-step in-depth assessment of the program's
- psychological elements
- strategic elements
- operational elements
- potential for improvement
Output: The result of your work is your loyalty program diary, which should look like a professional business document and present the results of your analysis to your advisor/boss in an intuitive, appealing way (e.g., brief texts, visualization through tables/figures).
Step #1: Audit of Your Loyalty Program's Psychological Elements
For your loyalty program diary, please conduct an audit of your loyalty program's psychological elements:
- Select two to six characteristics of your loyalty program (e.g., different types of rewards customers receive in the loyalty program)
- For each characteristic, choose which emotional and cognitive psychological processes from our discussion are influenced by this characteristic
- Be sure to consider both positive and negative psychological customer responses
Step #2: Audit of Your Loyalty Program's Strategic Elements
For your loyalty program diary, please conduct an audit of your loyalty program's strategic elements:
- Go through the list of structure and reward characteristics we discussed in E-Lecture 6
- For each structure and reward characteristic, briefly describe which of the different generic options (or which other option) applies to your loyalty program
Characteristics | Generic Options | Description | Example |
Membership Enrollment | Open Closed Automatic enrollment Other | Every customer can enroll Customers can apply, but need approval from the company Customers become members without explicitly signing up | QF, Safeway (open sign up) American Express (credit approval) Telecom providers (e.g., T-Mobile, o2) |
Membership identifier | Card Miscellaneous No identifier Other | Members are identified through card Members are identified through other means such as stamp cards, coupons, or e-mail addresses | InterContinental Hotels Group (card) Subway (stamp card) |
Step #3: Audit of Your Loyalty Program's Operational Elements
For your loyalty program diary, please conduct an audit of your loyalty program's operational elements:
- Go through the list of delivery, dynamics, and targeting characteristics we discussed in E-Lecture 7
- For each delivery, dynamics, and targeting characteristic, briefly describe which of the different generic options (or which other option) applies to your loyalty program
Characteristics | Generic Options | Description | Example |
Rule clarity | High Low Mixed Other | Explicit communication of the reasons for delivering a reward to customers No explicit communication of the reasons for delivering a reward to customers (e.g., surprising reward) Similar proportion of rewards featuring high and low rule clarity | Mariot Hotels with clear directions Ritz Carlton with complex reward system |
Reward exclusivity | High Low Mixed Other | Limitation of a reward to a select group of customers only No limitation of a reward to a select group of customers only Similar proportion of exclusive and non-exclusive rewards | Nordstrom in-store VIP events QFC discounts Neiman Marcus benefits per tier |
Step #4: Audit of Your Loyalty Program's Potential for Improvement
For your loyalty program diary, please conduct an audit of your loyalty program's potential for improvement:
- Identify two to five areas where you think your loyalty program currently performs poorly/not ideal and could improve (e.g., the loyalty program does not offer the right rewards, the loyalty program stimulates unfairness issues)
- For each area, argue what you would suggest to the loyalty program managers to improve the program, based on what you learned in the E-Lectures (or also in other loyalty programs, of course)
- Explain how you would implement the changes to make the loyalty program more effective