This is an interesting look at the premium credit card space. It's a special flavor of the self-reinforcing feedback loop of loyalty programs, with a splash of signaling mechanisms on both sides.

Net result: stronger relationships → stronger revenue.

For anyone who thinks that customer loyalty isn't a Big Deal (maybe you're focused on small discounts from your local supermarket) I invite you to look into the major airlines' programs.

Some airlines make more money on loyalty than they make from, y'know, flying people around ...

(Pinging Amarita Natt, Ph.D. here -- she's an expert on all things loyalty programs and could explain this far better than I could.)