Despite significant research and progress in examining the effects of loyalty programs on consumer behavior and firm performance, it is still unclear the firm value implications of these programs. The main goal of this article is to investigate whether announcements related to the loyalty program introduction affect firm value. In addition, the current research examines the moderating role of program, firm, and market factors in order to present a complete picture. The authors test the hypotheses empirically by conducting an event study of 134 announcements which cover a set of firms in the United States in five industries for 17 years from 2000 to 2016. We find that on average, the introduction of a loyalty program is positively related to firm value. Findings of this study will help managers understand how and under what conditions, they should introduce a loyalty program in order to affect firm value positively.

• Ashkan Faramarzi(HEC Paris, France)
• Mehdi Nezami(University of Illinois at Urbana-Champaign, USA)