Creating customer value and cultivating customer relationships has never been more important—or complex. With rising consumer expectations and constantly evolving business models, it’s essential for brands to demonstrate their value across every touchpoint.
This is especially important for loyalty marketers. In our recent research on consumer loyalty, 81% of survey respondents stated that they participate in loyalty programs because they offer products and services that suit their needs.
As a brand, you need to deliver quality products, services and experiences that your customers value. And in exchange, consumers deliver value to you through purchases and word-of-mouth recommendations.
But how can loyalty program managers elevate their programs beyond traditional tactics and form strategies that nurture real, emotional connections? In this blog, we’ll examine the fundamentals of customer loyalty—from understanding your customers to using AI-enabled technologies to drive better outcomes.
Customer value isn’t just a metric—it’s the foundation of long-term loyalty. Savvy loyalty marketers recognize it as being more than how much a customer spends—it’s a two-way value exchange. You want customers to engage with you, and you also need to give them a reason to keep coming back for more. This often means you need to take ongoing steps to nurture loyalty—kicking it up a notch from your typical transactional loyalty program.
Value is what turns interest into action. When brands can deliver value, they turn satisfied customers into life-long advocates.
It may sound challenging and expensive—but it doesn’t have to be.
What’s at the heart of every strong loyalty program is the ability to create touching experiences that offer relevant connections. Loyalty programs are a direct expression of how much a brand values its customers.
They can be leveraged to truly deliver what customers want. Before that happens, marketers need to know them in a deep, meaningful way.
Brands that get this right aren’t just increasing revenue growth; they’re growing something deeper:
These three types of connections lie at the heart of great brand experiences. Leveraging them will enable you to create long-lasting customer relationships by becoming a natural part of what people buy, how they live and what they love.
This is where data comes in.
Every customer interaction—whether online, in-app or in-store—generates valuable data. Data is the powerful key that unlocks customer behavior and provides a holistic view—enabling seamless, tailored communication that puts you one step ahead of your customers’ rising expectations—and leads to smarter loyalty and increased growth.
An advanced loyalty technology, powered by , collects fragmented data points from different channels. It cleanses and unifies them, enhancing your customer data—resulting in effective, targeted end-to-end customer experiences that foster loyal advocates—brand fans who feel seen, understood and genuinely connected.
Smarter customer insight tools enable you to listen to feedback, analyze behavioral patterns and tailor your responses to shifting customer needs and expectations, based on real-time insights. This feedback loop helps you move from guessing what people want, to knowing what they care about and offering it.
If someone always buys skincare products every few months, quality loyalty data will show it. You can send them a timely notification or send early access emails to build anticipation—turning intent into action.
Having insight alone isn’t the goal—it’s the tool you use to build what really matters—experiences that resonate.
Our research also revealed more than half of survey respondents sign up for a loyalty program when presented the opportunity. Sign-ups provide insight into customer intent. But, too often, that’s where the journey ends.
Real loyalty is created through ongoing experiences that offer value at every touchpoint throughout the buyer’s lifecycle.
The most comprehensive approach to loyalty considers how to add value throughout the entire customer journey—using personalization, and other customer retention strategies—to make the experience as relevant and engaging as possible. Whether through email, SMS, app or in-store, personalized communications and tailored rewards boost engagement and deepen loyalty.
Dunkin’ is a great example of a quick-service restaurant that has built loyalty by establishing a seamless process. Once customers have downloaded the app, they can choose to continue signing up for the rewards program or order as a guest.
Dunkin’ encourages ongoing engagement throughout the customer journey with:
Strategic loyalty programs do more than offer rewards and perks to their customers—they give them a reason to come back, engage and advocate for the brand.
Loyalty marketers are often required to do more with less—building programs with limited budgets and strained resources. This can make it challenging to achieve real results. Brands that focus on efficiency and strategic allocation can still make an impact.
Smart spending starts with knowing what works. Investing in the right loyalty technology can deliver proven results—offering audience segmentation and real-time performance measurement that can reduce waste in ad spend. By reallocating budget dollars to the channels that your customers prefer, you can increase conversions and improve ROI.
Sharing content with your customers—whether intended as valuable, educational or inspirational—positions your brand as a trusted authority that people can look to for what matters to them, which is essential to building customer loyalty. Well-distributed content—via owned, shared and earned channels—exhibiting how your product or service solves a problem, can drive lasting engagement without breaking the bank.
Momentum around AI is building. Our recent report, The state of AI in marketing, revealed that 94% of marketers across industries are using AI to prepare or execute marketing. In that same report, 82% said they are working with a marketing vendor or partner that claims to leverage AI.
Loyalty program managers can no longer afford to ignore the power of AI. As consumer preferences, habits and expectations grow more sophisticated, leveraging AI-enabled technology will amplify your marketing by providing valuable insights that forecast behavior, churn risk and lifetime value.
Consumer expectations shift and evolve rapidly. Fueling your loyalty strategy with AI-powered insights, enables:
More than just a tool, AI is a strategic partner—helping brands deepen relationships, drive sustainable growth and turn every interaction into an opportunity for lasting customer retention.
According to an IDC Retail Insights’ Global Retail Survey, 2024: Findings and Implications, published November 2024, despite the fact that AI and generative AI (GenAI) could be leveraged for better customer experience and efficiency, objectives that top retailers prioritize, identifying AI and GenAI opportunities is not one of the top priorities for retailers¹.
However, if brands want to enhance speed to market without sacrificing personalization, GenAI should not be discounted. It is a powerful tool brands can leverage to produce tailored content at scale faster, more efficiently—and in real time.
Now, more than ever, it’s important for loyalty marketers to include ongoing evaluation tactics to test and refine their efforts, reinforcing the long-term effectiveness of their strategies and boosting ROI.
The best way to increase the performance of your loyalty program is to set clear KPI’s that align with your business goals. By paying attention to what contributes to consumer’s emotional connection to your brand and measuring those emotional ties against metrics, like Net Promoter Score (NPS) and Customer Satisfaction Score (CSAT), can guide your loyalty strategies.
An advanced customer interaction management software can provide a full view of your loyalty program, leveraging KPIs that reveal the health of your efforts and form the foundation of your performance benchmarks.
Improving loyalty starts with understanding the path the conversion. Optimizing CX, relevant, person-level communications and tailored incentives can remove friction and increase meaningful consumer-brand interactions.
Beyond basic metrics, advanced analytics can help you uncover deeper trends and predictive behaviors. These insights allow you to refine customer segments, personalizing content and offers in real time, with greater precision.
Building lasting customer relationships require a shift in mindset that moves beyond the transactional interactions to engaging experiences. Every interaction is an opportunity to generate goodwill, and all marketers can create customer value through moments that touch on the emotional and rational sides of loyalty.
Feel out what is best for you, your brand, and the situational context around how you normally engage with your customers. Investing in the right technology, like Epsilon PeopleCloud Loyalty, can help loyalty marketers listen better, respond faster, and personalize at scale. Now is the time to be intentional in establishing a solid foundation for deeper trust, stronger engagement and ultimately, customers who frequently return and rave about your brand.
This article was originally published on September 22, 2023, and has since been updated.
¹Source: IDC Retail Insights’ Global Retail Survey, 2024: Findings and Implications, Doc # US51558623, published November 2024
