It’s a long-held belief that when it comes to loyalty, what people give is what people expect to receive. This is especially relevant for the consumer-brand relationship.
Consumers are extremely savvy, and not easily swayed. They carefully decide when to buy, and when not to. Consumer loyalty cannot be negotiated; it must be nurtured. But how can brands effectively do so?
“Top-performing brands are relentlessly customer-focused — they don’t assume what customers want; they listen, observe, and adapt,” says Shamba Schmidt, VP of Sales Consulting at Epsilon. “By aligning actions with customer sentiment, they build deeper satisfaction and lasting loyalty.”
Recently released Epsilon research, Fostering affinity through smarter loyalty programs, sheds light on consumer habits, behaviors and attitudes toward loyalty programs. The research shows that consumers take notice when loyalty programs know them more holistically, and that when a brand gets loyalty right, customers feel far more affinity and loyalty than brands that don't.
For the average consumer, joining loyalty programs is a no-brainer. We found that 40% of respondents belong to 4-7 loyalty programs, and 59% use their loyalty programs 1-3 times in a typical week.
And why wouldn’t they? Loyalty programs promise exclusive rewards, unique discounts and personalized offers. But many brands often overlook the critical role of active engagement in ensuring long-term success.
Baseline rewards and discounts aren't enough to keep customers satiated. In fact, customers are four times more likely to leave a service interaction disloyal than loyal. While the reasons for this may vary, the consequences often hold long-term ramifications.
“The data from our study showed that 45% of the people who had something positive to say about a company told fewer than three other people,” says Rick DeLisi, principle executive advisor at Gartner. “However, 48% of people who had a negative experience told more than ten people.”
This disconnect often happens because consumers and brands have different definitions of "loyalty." When consumers have a negative experience, it’s perceived as a sign that the brand doesn’t care. This isn’t necessarily the case. According to PwC's Customer Loyalty Executive Survey, companies measure loyalty more broadly than consumers do. Their study revealed that executives underestimate how much the quality of their offerings foster customer loyalty—estimating it at just 23%.
Brands think the existence of a loyalty program fosters loyalty all on its own, when in reality, programs that effectively reach and satisfy customers require a deeper understanding of who the customers are and what, exactly, they want.
Data-fueled technology can help brands bridge the gap. Deloitte reports that 51% of high-growth brands are deploying first-party data in delivering personalized content via dynamic creative optimization.
Brands that take a data-driven approach to their loyalty marketing can have more meaningful interactions that reflect demonstrated appreciation for their customers' patronage.
Leveraging consumer data can reveal trends, preferences and opportunities that can turn missed opportunities into rewarding experiences that enhance customer engagement and increase retention.
"Brands need to have a firm strategy that appeals to their customers on a personal level," Schmidt says. "Brands unknowingly undermine the very loyalty they want to nurture if their interactions don't demonstrate their customer understanding."
An article on brand loyalty by Growave, a company that helps e-commerce brands build lasting customer relationships, put it simply: "Brand loyalty occurs when a customer consistently chooses the same brand over others, even in the presence of more affordable options. This is because brand loyalty is fundamentally rooted in perception.”
Customers often perceive personalized experiences as a sign that the brand understands them and values their business. Eighty percent of consumer respondents in our report said they like it when brands personalize communications with them based on their loyalty program interactions and status.
Personalization can turn simple interactions into meaningful recognition. This increases customer retention, improves higher lifetime value and builds stronger emotional connections.
Adidas, the multinational athletic sportswear and footwear retailer, recognizes that personalized experiences cultivate deeper customer loyalty. By tapping into real-time behaviors and preferences—both online and in-person—they can offer exclusive one-of-a-kind benefits that feel unique and tailored to each individual.
“Whenever they land on their touchpoint of choice, we’re outputting relevance to them. That relevance can be variable in terms of what rewards we’re offering, what kind of access we’re giving, and what kind of content we’re displaying to them,” says Thomas Kirk, global loyalty strategy director of Adidas, in a Total Retail Talks episode. He goes on to explain the critical role personalization plays in creating memorable experiences. “It’s really how we recognize behavior in the correct manner and serve up the best type of message at that moment in time.”
Providing customized experiences in this way is what turns loyal customers into vocal fans of the brand. Seventy-four percent of consumer respondents from our survey said that as a loyalty program participant, they recommend the brand to others.
To deliver personalized, relevant experiences and rewards that cultivate deeper customer engagement, brands need to reframe their perceptions around loyalty programs. These data-rich environments provide direct feedback to the brand about what their customers actually want.
“Too often, loyalty programs fall into a ‘set it and forget it’ mindset, missing the opportunity to tap into the rich data at their fingertips,” says Schmidt. “Success isn’t just about collecting information—it’s about using it to strengthen the customer experience and deliver what customers truly want.”
This approach fuels a wide range of tactics: personalized rewards, tiered programs, price-based benefits, experiential incentives and gamification, to name a few.
It also gives brands a direct feedback loop. Stronger data provides stronger measurement and key metrics. This can happen by partnering with smarter technology that offers various levers to gauge emotional loyalty, identify repeat behaviors, sentiment of customer feedback and brand engagement patterns.
Tractor Supply Company set out to drive stronger customer engagement and affinity by digging into their customer loyalty data. As one of the largest rural lifestyle retailers in the US, Tractor Supply Company partnered with Epsilon to gain a clear view of their customers and redesign their loyalty program to speak to their customers’ needs.
Their aim was to grow a stronger relationship with their customer by optimizing their data to ensure a more balanced and rewarding value exchange for each individual patron. By looking at their customer data, they started analyzing what was truly effective: Were they offering the right rewards at the right thresholds? Where were areas that needed improvement?
Harnessing data and insights produced better outcomes and led to an increase in their loyalty program retention rate of more than 75% and $11B+ in supported sales.
“It’s really important to understand ‘the why,’” says Neil Tenzer, VP of Customer Loyalty, Insights & Engagement at Tractor Supply Company. “That’s actually the fun part—to spend time rolling around in the data, spend time in stores, and say, okay if this is the way these numbers are moving, why is that happening? What does that customer journey look like? Why are people joining? What motivates them to join and, in those rare instances where they do leave, why?”
To build loyalty, brands need to provide genuine value with each interaction—and that begins with knowing what customers care about most. Epsilon Loyalty turns rich insights into full-view loyalty, helping you scale your strategy as your customer relationships grow.
“It’s important for brands to listen to their customers, acknowledge their loyalty and create ongoing conversations. This is not only foundational to advocacy, but it’s how authentic experiences are created,” Schmidt says. “But brand affinity isn’t created overnight. It takes consistent marketing effort that’s focused on aligning with what your customers value, which is what we work with brands to deliver.”
Nurturing loyalty requires real insight into what drives behavior and creates emotional connection. To strengthen your approach to customer loyalty, you can start with our latest consumer research report.
