Exit strategies of loyalty programs

Loyalty programs are a widespread marketing tool whose contribution to a company's economic success is still being questioned. From a marketing relationship perspective, they cannot be terminated easily and their elimination has to be reasoned. This qualitative study examines why companies end their loyalty programs and how their termination is processed. In five different cases that I present, results reveal that conflicts with partners and unfavorable cost-benefit ratios are determinants of the program terminations. Customer information and regulatory issues on reward validation characterize the process of withdrawal. The exit strategy "phase out slowly" is adopted most commonly.