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• Dirichlet model
• Hofmeyr model
• RED Matrix model
• Enis-Paul Index model
• Retention Rate model
• Reichheld Loyalty Effect model

Models for Loyalty

Loyalty marketing does not differ from other marketing techniques in requiring the disciplines of research, measurement and budgeting and controls. It is arguable that it requires them more to justify the considerable resource commitments to operate these programmes profitably.

As loyalty schemes become more popular in the service and business-to-business sectors, it is likely that other models than those developed for use in the FMCG area will be required. Services generally impose higher switching costs on consumers and for the business consumer the quality and reliability of supply are of paramount importance.

The 'science' of loyalty measurement and modelling is still developing but some of the approaches listed in the models outlined below will give insights that may prove useful in evaluation of your own loyalty schemes. The listing is not intended to be comprehensive but rather a cross section of some of the most widely used loyalty models.