The Relationship between Loyalty Point Redemption Strategy and Response to Promotional Campaigns
(A2020-63620)

AUTHORS

Mariia Klein, NRU HSE-Perm; Dmitriy Potapov, NRU HSE-Perm; Irina Shafranskaya, NRU HSE-Perm

KEYWORDS

loyalty; experiments; point-pressure

ABSTRACT

This study uncovers the relationship between loyalty point redemption strategy and response to promotional campaigns on the basis of customer analytics of the leading Russian restaurant chain. We use data from three randomized field experiments, including more than 100,000 customers, designed as the promo campaigns, and introduce a special metric that characterizes the point redemption strategy. Logit modelling illustrates that customers who are inclined to spend points more often are more likely to respond to certain kinds of promotions. Moreover, for the studied promotional campaigns, it was found that using information about point redemption strategy would increase the response to, and efficiency of, promotional activity.