How Loyalty Programs Drive Customer Value, Relationships, and Business Growth

EPISODE OVERVIEW Wharton marketing professor Peter Fader explains that airlines generate much of their profitability from loyalty programs through partnerships with banks. He notes that Starbucks frequently changes its program, sometimes removing or reintroducing rewards, while Luckin Coffee relies on heavy discounts to build a customer base. McDonald’s designed its program to move from a transaction model to a relationship model. Fader emphasizes that loyalty programs provide better customer data, enable differentiated treatment, and should be tied to customer lifetime value, with AI helping identify top customers and design relevant perks.

PODCAST OVERVIEW Every day, business scholars answer pressing questions in their research - but what do their insights mean for you? In this podcast, Wharton faculty dive into what inspired their studies and how their findings resonate with the world today. Learn how research insights translate into knowledge you can use, with host Dan Loney.

#LoyaltyPrograms #Airlines #Starbucks #CustomerCentricity #BusinessGrowth #MarketingStrategy ----- The Wharton School of the University of Pennsylvania is committed to sharing its intellectual capital through Knowledge at Wharton, the school’s online business analysis journal.

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