He is loyal. This loyalty is worth more to American than the benefits that they have to give Arthur to keep his loyalty. It is a win-win situation. American, and other successful database marketers are managing their customers. They have learned that customer management is more profitable than product management.
Lets provide another example.
While discounting can be effective in building sales, few mass marketers are able to see what it is doing to the loyalty of the customer base. The above diagram offers a picture of what is going on. As the discounting continues, regular customers learn that they are chumps if they pay full price. They learn to think about the product in terms of it's price, rather than it's usefulness. If the discounting ends at some point, the company may find itself with a massive drop in sales.