Comparing Loyalty Program Tiering Strategies: An investigation from the gaming industry

Loyalty programs are popular marketing strategies developed for the purpose of attracting, maintaining, and enhancing customer relationships. Due to the explosive worldwide growth of, and increased competition within, the casino industry has compelled contemporary casino marketers to rely more heavily on loyalty programs to increase guest allegiance and the frequency of repeat visits from their customers. Despite the widespread usage of loyalty programs across various gaming businesses in Las Vegas, its effectiveness has not quite been validated. The purpose of this study is to examine customers’ behavioral loyalty within the Las Vegas gaming industry and examine the effectiveness of a specific loyalty program using secondary data obtained from a Las Vegas casino hotel. Specifically, this study segmented loyalty program members to investigate the effectiveness of a casino loyalty program’s tiering strategy on members’ purchase behavior. Further, this study employed Recency-Frequency-Monetary (RFM) analysis to examine two different types of tiering strategies