MIT Sloan Management Review Article on Why Customer Experience Is Key for Loyalty Programs

Research shows that monetary rewards are not the only driver for customer loyalty programs and that increasing experiential rewards provides greater long-term benefits.

Loyalty programs are supposed to unlock great value for companies by driving higher sales and boosting brand affinity. So why aren’t they doing this? Although more and more companies now have loyalty programs (they’re growing at 9% a year), the number of customers who actively participate in them continues to hover at only about 50%, suggesting that there is still something missing in most programs.

About the Author

Jess Huang is an associate partner in McKinsey’s Silicon Valley office and coleads the Loyalty Service Line in McKinsey’s Marketing and Sales practice. Phyllis Rothschild is a partner in McKinsey’s Boston office, a leader in the Global Consumer Marketing & Sales practice and coleads the Loyalty Service Line. Jamie Wilkie is an associate partner in McKinsey’s Boston office. She is a leader in the Marketing & Sales practice focusing on growing consumer and retail companies through digital consumer engagement, CRM and personalization, and portfolio strategy.

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