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Assignment 2 - 1 When it comes to customer loyalty programs...

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1. When it comes to customer loyalty programs, there can be various design characteristics that go into it – some that are necessary and some that are optional. However, in order for a customer loyalty program to be effective, it must have a stable dynamic and realistic reward structure. This is what the loyalty program consists of and how it goes about demonstrating it. It is the fundamental layout of your compensation for shopping at a particular retailer. The reward structure is a major characteristic and necessity because without it, there really is no legitimate loyalty program. Within the reward structure, other design characteristics include: sponsorships, incentives, and deals. Sponsorships can be the existence of any partnership or external network that a retailer may be working with to make the loyalty program possible. Many retailers use this to aid them in affording a loyalty program and this simultaneously helps out the sponsor because they are being marketed, advertised, and put into service. Incentives and deals go hand-in-hand as a design characteristic of loyalty programs; they are what motivate consumers to purchase and to become a part of a loyalty program in the first place. Of course, why else would you join one of these things? You are not adhering if there is nothing in it for you.
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