Loyalty programs have been widely adopted by companies and their customers. A loyalty program is a relational marketing instrument that aims to enhance customer loyalty. However, skepticism exists about the implementation and effectiveness of loyalty programs. This paper studies for whom, when and how loyalty programs can be a useful addition to the marketing-mix. The paper starts with setting up a framework for the analysis, followed by a discussion of loyalty programs and related marketing concepts, and an overview of the existing literature. As such, this enables us to obtain insight in the current knowledge of this subject and to give directions for further research.
