Today’s paper is Byron Sharp’s 1997 “Loyalty Programs and their Impact on Repeat-Purchase Loyalty Patterns” – a classic that remains surprisingly relevant. Takeaways for marketing practitioners? Loyalty programs don’t create “excess loyalty”:...

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Loyalty programs don't create excess customer loyalty beyond what's expected from a brand's market share, according to Byron Sharp's 1997 research that remains empirically valid. The Double Jeopardy law shows smaller brands have fewer buyers who are less loyal, and loyalty programs can't break this pattern. Customers remain polygamous buyers regardless of loyalty status. Modern loyalty programs have shifted value from behavioral change to data collection, personalization, and maintaining mental availability. To gain more loyal customers, brands should focus on penetration and growth rather than retention through points-based programs.

Do Loyalty Programs Actually Create Loyalty?