Call it a customer club! How reward programme’s name impacts programme effectiveness

The purpose of this research is to identify how a reward programme name (“loyalty programme” (LP) versus “customer club” (CC)) influences the type of central rewards expected and their impact on loyalty to the retailer.

The authors conducted a survey followed by an experiment.

Central rewards from programmes called LP are equally hard and soft, whereas central rewards from programmes called CC are mainly soft. Providing customers with central rewards increases satisfaction with the programme and loyalty to the retailer, but only for programmes called LP.

Loyalty managers are advised to pay particular attention to the consistency between the type of rewards they offer and the reward programme name that carries them. Contrary to the name LP that leads to me-too programmes, the name CC offers more flexibility to choose the rewards, providing opportunities to stand out from competing programmes.

By building on a new and original theoretical approach, this research is the first attempt to investigate the effect of the reward programme naming decisions on customers' evaluations and responses.