The short answer is that we don't know. There's some evidence to suggest that loyalty programs are beneficial to businesses and consumers, but ultimately it's not clear if loyalty programs are profitable or if they should be treated as a profit center.

When I started to look through the literature on loyalty programs, I found out it's large and often contradictory. Fortunately, I was lucky enough to stumble across a recent literature review that gives a great summary of what researchers know and in someways more importantly don't know about the effectiveness of loyalty programs.

The visualization below splits my notes on the review into things we know and don't know about loyalty programs. Click on the circles to zoom into each section. The smallest circles display a note giving some information on a particular aspect of loyalty programs.

Resources