Customer rewards have been reviled in the business press as cheap promotional devices, short-term fads, giving something for nothing. Yet they’ve been around for more than a decade, and more companies, not fewer, are jumping on the bandwagon. From airlines offering frequent flier deals to telecommunications companies lowering their fees to get more volume, organizations are spending millions of dollars developing and implementing rewards programs.
A version of this article appeared in the May–June 1995 issue of Harvard Business Review.