2011-06-companies-profit-loyalty

2011-06-companies-profit-loyalty - Companies may not profit...

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Companies may not profit from offering loyalty programs: study Professor Saeed Zolfhaghari and PhD candidate Amir Gandomi have developed a mathematical model that evaluates the profitability of loylaty programs. A wallet full of loyalty and points cards is a common sight for many people. The results of a new study out of Ryerson University which examines the profitability of loyalty programs indicate that some companies may be better off not offering this type of customer incentive. Saeed Zolfaghari, professor and director of the industrial engineering program at Ryerson University, and PhD candidate Amir Gandomi, co-authors of the study, discovered that despite the high rate of participation in loyalty programs there has been little analytical research to date. As a result, Zolfaghari and Gandomi developed a mathematical model that measures their effectiveness. "Loyalty programs entice people to become, and remain, customers," says Zolfaghari. "Our model
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