Interesting Results
Earning Luxury Rewards
A recent investigation of reward (loyalty) programs found that as the difficultly of earning a reward increases, consumer preferences move away from necessity rewards toward luxury rewards. With higher program requirements, consumers are more likely to prefer luxury rewards and are more likely to join a loyalty program that offers a luxury reward. They also found that when program requirements are held constant but the individual consumer’s effort is greater, the shift in preference toward luxuries is still observed. This effect was stronger among consumers who tend to feel guilty about buying luxuries and among those who earned rewards through their work activities.