Which of the following statements about loyalty programs is false?

Question

BlackTom AI · Accepted Answer

Question restatement: Which of the following statements about loyalty programs is false?

Options:
 a. Loyalty programs work when there is a high frequency of repeat purchases.
 b. Loyalty programs work when there is little personalisation.
 c. The purpose of loyalty programs is to reward past behaviour.
 d. The purpose of loyalty programs is to influence future behaviour.

Analysis of each option:

Option a:
- This statement claims loyalty programs are effective when customers make purchases frequently. In many loyalty programs, the value comes from encouraging ongoing, repeat transactions; customers who buy more often provide more opportunities to earn rewards, which strengthens retention. Therefore, this is typically considered a true condition for success of loyalty schemes.

Option b:
- This option says loyalty programs work when there is little personalisation. While many programs perform well with generic, broad-based rewards, the literature and practice often show that some personalization enhances engagement and relevance. However, it is not universally false to have limited personalization in certain simple or mass-market programs, so this can be context-dependent. In some cases, a straightforward, non-personalized program can still drive loyalty, particularly for price-driven or convenience-focused contexts. Thus, this statement can be viewed as conditionally true, depending on program design and market.

Option c:
- This statement asserts that the purpose of loyalty programs is to reward past behaviour. Loyalty programs typically reward past actions (previous purchases) with points, discounts, or perks. However, if the overarching claim is that the sole or primary purpose is only to reward past behaviour, that may be overly narrow, since many programs also aim to influence future behaviour (drive future purchases, steer brand choices, etc.). In some curricula, this framing is considered too limited, which can render it false in that context.

Option d:
- This statement claims the purpose of loyalty programs is to influence future behaviour. This is a common and central aim: by offering rewards, brands seek to shape future purchasing decisions and loyalty trajectories. This is generally regarded as true.

Conclusion:
- The statement chosen as false (c) hinges on the interpretation that loyalty programs do more than merely reward past behaviour; they are also designed to influence future purchasing. Thus, while option c centers on past behaviour, the broader purpose often includes shaping future actions, making this option incorrect in many practice/theory perspectives. The other options describe behaviors or outcomes that are consistent with how loyalty programs operate in typical contexts, though with nuance as noted for option b.

INFS5602-Digital Capabilities for Bus - T3/2025

Which of the following statements about loyalty programs is false?

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