The Gist
- Loyalty is functional, not emotional. Brands often confuse repetition with love, but most loyalty is built on ease, habit and user experience.
- Programs must reflect behavior, not fantasy. Effective systems reinforce existing routines — they don’t create attachment from scratch.
- Points aren’t the problem — assumptions are. Even high-performing programs succeed when they enhance a strong experience, not because of point structures alone.
Editor’s note: Loyalty isn’t love — it’s habit. In Part 2 of our series on customer loyalty, we move past the critique and into the reconstruction. What does loyalty really look like in a world driven by convenience, frictionless design and functional value? Here, we explore how leading brands earn repeat behavior by aligning with customer realities, not marketing fantasies — and offer a roadmap for what to build instead of broken programs. In Part 1, we covered why traditional points-based programs fail, how brands misinterpret customer behavior, and why most so-called “loyalty” is anything but.
Marketers often describe loyalty as a deep emotional bond, a sign of brand love or personal alignment. But this narrative confuses preference with convenience. What is labeled as loyalty is usually repetition shaped by habit, ease or a lack of better alternatives.
Mark Ritson said that what many marketers interpret as emotional loyalty is often just functional behavior. Bob Hoffman goes further, stating plainly that people are not loyal to brands. They are loyal to what is easy, familiar and efficient. Loyalty, in the way marketers use the word, is not an emotion. It is not a belief. It is not a metric. It is a misreading of predictable behavior.
Even the most celebrated programs like Sephora’s Beauty Insider and Starbucks Rewards do not create allegiance. They integrate into routines, remove friction and reward frequency. Their success is often mistaken for attachment when it is simply the result of good user experience, perceived value and behavioral reinforcement.
Adding tiers, personalization or exclusivity can make a program more effective. But these features do not create loyalty. They shape repeat behavior. That is useful, but it is not emotional commitment, and it should not be treated as such.
The programs that perform well do so because they enhance an already strong product or experience. They follow the brand; they do not lead it. Programs fail when marketers expect mechanics to replace meaning.
Loyalty is not built through feeling. It’s sustained through function, and it’s earned by reducing effort, reinforcing habit and delivering consistency. Anything else is mythology dressed up as marketing strategy.
Related Article: The Emotional Drivers of Customer Experience
Table of Contents
Brand Values Don’t Drive Customer Choices
Marketing discourse often suggests that customers want value alignment, personalization and emotionally resonant brand experiences. Loyalty programs are then repositioned to reflect these assumptions. But consumer behavior tells a different story. What customers say in surveys rarely aligns with what they do. Habits, defaults and perceived value, not shared ethics, drive most decisions.
54% of memberships are inactive, with 95% becoming inactive within 90 days. Gen Z is frequently cited as values-driven, yet their actual purchase patterns mirror those of other cohorts. They return to what is easy, switch for better deals and rarely express consistent brand preference. As both Bob Hoffman and Mark Ritson argue, customers do not form relationships with brands. They form routines. Loyalty language romanticizes what is often just repetition.
Some programs, like Adidas’ adiClub, succeed not because they inspire loyalty but because they reward participation in ways that reduce friction or feel contextually useful. Members earn points for logging workouts or engaging with the app. The brand fits easily into their routine. This isn’t emotional loyalty; it’s convenience-driven behavior dressed in engagement metrics.
Programs that offer early access, simplified service or functional perks may perform well, but not because customers care about the brand. They succeed by aligning with existing behaviors. Marketers must stop designing programs around aspirational narratives of brand love. Loyalty systems only work when they serve the customer’s reality. Anything else is mythology.
Loyalty Programs Fail More Than They Work
Despite near-universal adoption, points-based loyalty programs fail to produce reliable business outcomes. The mechanics reward behavior that would have happened anyway, inflate ROI through self-selection bias and mask disengagement with bloated enrollment counts. These programs are expensive to run, difficult to measure accurately and fundamentally misaligned with how customers actually make decisions. Refinement will not solve this. Replacement is required.
For marketers, abandoning familiar infrastructure feels risky. Many programs have millions of members, years of internal visibility and cross-channel entanglement. But participation is not performance. Enrollment without engagement is noise. Continued investment in programs that no longer deliver incremental value is an operational liability.
Claims of strong ROI rarely withstand scrutiny. While vendors report average returns of 4.8×, fewer than half of brands can confidently measure the true incremental impact
What the Strongest Loyalty Programs Get Right
Starbucks Rewards is frequently cited as a loyalty program success story. The headline numbers support that narrative. As of Q2 2024, Starbucks reported 34.3 million active U.S. Rewards members, who accounted for 59% of domestic store revenue. But the effectiveness of Starbucks Rewards is not rooted in points; it’s rooted in integration.
The program is embedded in the mobile app, which enables frictionless ordering, personalized offers and preloaded payment. It reinforces behaviors that customers already value like speed, convenience and control. The points are incidental. Customers use the program because it makes an already-preferred experience easier to repeat.
Compare this to Coca-Cola’s now-defunct “Coke Zone” in the UK. The program offered points for entering bottle cap codes online, but it failed to sustain engagement. Users found the process tedious, the rewards underwhelming and the experience disconnected from how people actually consume the product. Coke discontinued the program in 2013, and it cited limited impact on behavior and low ROI. The brand redirected resources toward broader brand marketing, recognizing that the program was only subsidizing behavior that had no need for incentive.
Sephora’s Beauty Insider program succeeds for similar reasons. Members represent 80% of total sales. But it’s not the points that drive usage; it’s the layered experience. The program offers early access to products, tailored recommendations and status-based perks that complement the brand’s aspirational positioning. In 2020, Sephora expanded its offering to include point redemption for charitable giving and lifestyle rewards. The redesign aligned the program with customer values, and it improves perceived relevance and satisfaction.
Even in the travel sector, where loyalty programs are widespread, the highest-performing initiatives are service-led. Hilton Honors integrates room selection, digital key access and mobile check-in through its app. Members receive exclusive rates and flexible check-out as functional enhancements to the core experience. Points still exist, but they’re not the main driver. They’re a tool layered onto a seamless customer journey that already works.
The consistent thread across these examples is that the program supports a business model already optimized for repeat interaction. Loyalty is simply the byproduct of a well-executed experience. Programs like these succeed when they enhance value, and they fail when they attempt to manufacture it.
Related Article: The Evolution of Customer Loyalty Programs in an Always-on World
How to Rethink Loyalty From the Ground Up
A 10-step roadmap to replace outdated loyalty mechanics with lasting emotional connection, brand belonging and personalized experiences.
| Step | Action | Description |
|---|---|---|
| Step 1 | Reassess Whether a Loyalty Program Is Necessary | Start by questioning the assumption that your brand needs a loyalty program. Review whether loyalty mechanics are solving a core problem or masking deeper issues like weak differentiation, inconsistent service or commoditized offerings. If emotional loyalty is low, rewards will not fix it. |
| Step 2 | Audit Your Existing Loyalty Program Critically | If a program already exists, analyze its true contribution. Examine enrollment versus activation, reward redemption versus breakage, cost versus incremental revenue and overall customer lifetime value uplift. Apply strict incrementality testing rather than relying on vanity metrics. |
| Step 3 | Eliminate Ineffective Loyalty Structures | Decommission point systems, tiers or mechanics that deliver poor ROI, low engagement or superficial behavior change. High breakage and low redemption may indicate customer apathy. Prioritize what builds relationship equity. |
| Step 4 | Invest in Product and Experience Differentiation | Shift resources into areas that create genuine reasons to return like better products, simpler service, more human interactions and brand experiences that make customers feel seen, not just sold to. |
| Step 5 | Replace Rewards With Recognition | If you retain any loyalty structure, base it on identity and belonging. Recognize factors beyond spend like tenure, advocacy, participation and contribution. Loyalty that reflects customer values (i.e., sustainability, education, access) resonates more than point accrual. |
| Step 6 | Build Community, Not Just Transactions | Use forums, social groups, UGC campaigns and customer-led storytelling to create brand tribes. Community bonds are durable. Loyalty programs often ignore them, yet they hold the key to attitudinal loyalty. |
| Step 7 | Personalize Every Interaction | Use loyalty data to tailor experiences. Show customers they are known. That could mean something like curated recommendations or proactive service based on lifecycle context. |
| Step 8 | Design for Emotional Attachment | Audit whether your brand creates joy, nostalgia, pride or trust. Loyalty emerges when brands become part of identity. Replace the language of incentives with the language of belonging. Customers stay for how you make them feel, not what you give them. |
| Step 9 | Institute Incrementality as a Gatekeeping Metric | If any loyalty initiative continues or is proposed, it must meet strict testing requirements. Establish control groups and require statistically valid lift in behavior attributable to the program. |
| Step 10 | Exit Gracefully, Reinvent Deliberately | If you phase out a legacy program, communicate transparently. Frame the change around customer experience improvements rather than cost-cutting. Offer a clear path forward to achieve better service, more relevance and greater purpose. |
Related Article: Are Brand Communities Your Shortcut to Customer Love?
Loyalty Cannot Be Bought
Points-based loyalty programs persist not because they work but because they’re familiar. They create the appearance of engagement and the comfort of quantifiable metrics. But in reality, they are expensive compensation mechanisms for deeper issues, commoditized products, undifferentiated experiences and a fundamental misunderstanding of how and why customers return.
There is no such thing as loyalty in the emotional sense marketers continue to chase. Customers are not loyal to brands. They are loyal to what is useful, consistent and convenient. When loyalty appears to exist, it is often the result of habit, not belief. Programs that mistake repetition for allegiance misread the data and misallocate resources.
The case against traditional loyalty programs is operational. These systems reward behavior that often masks disengagement with inflated participation counts and diverts attention from investments that actually matter. Real growth comes not from engineering loyalty but from removing the reasons customers might leave.
Brands that accept this reality can build systems that reflect it. Programs that enhance utility, reduce friction and acknowledge the customer’s context will outperform those chasing sentiment that never existed. The focus has shifted from repairing loyalty programs to evaluating their necessity altogether.
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