Why loyalty programs should move beyond points and perks

I’ve become a heavy user of loyalty programs. I’m enrolled in dozens of them, from grocery stores to pharmacies to airlines to gas stations. They track my purchases for small discounts or an occasional freebie. For the most part, these programs don’t influence my choices. The points pile up and if the programs vanished tomorrow, I doubt I’d miss them. Which begs the question: Why are these commerce strategies called loyalty programs when they’re actually designed to extract maximum value—data, dollars, repeat behavior—for minimal investment? Also read: 15 agency executives leading the charge for personalization through AI and other tech innovations True loyalty requires something more: Feeling seen, a sense of commitment and general appreciation as part of the value exchange. And when brands include these emotional signals into their program model and measurement, the return is significant. According to LoyaltyLion, members of well-designed loyalty programs spend up to 18% more on average annually than non-members. That’s not just a repeat purchase—it’s new revenue streams based on tending to customer relationships. To capture this potential, next-generation loyalty models must evolve—shifting from transactional tactics to data-powered relationship-building strategies. Here’s how brands can reimagine insights, operations, and measurement to cultivate loyalty that feels personal, human, and lasting: Make consumers feel seen Most loyalty programs are standard across consumers and industries, but your best customers have already given you plenty of behavioral data to do better—purchase history, browsing behavior, product preferences and even social sentiment signals. Nike, for example, unifies behavioral data from across its ecosystem—Nike.com, SNKRS, Nike Run Club and Nike Training Club. Through the program, I’ve received exclusive access to product drops, coaching content and limited offers on things I buy already, as well as special offers on new products I haven’t yet purchased. I appreciate this level of hyper-personalization and am willing to buy directly from Nike vs. other retailers to protect this experience. The impact is measurable—Nike loyalty members generate 3x the revenue of non-members, proving that data-driven personalization isn’t just appreciated, it’s profitable. Demonstrate commitment and service Loyalty is a two-way street. If you’re asking customers to commit to your brand, you need to show them that commitment is mutual. Today’s consumers expect more than points and perks—they want to feel that brands are invested in their experience. When customers invest significant time and spend with a brand, they expect brands to leverage their influence and access on behalf of their most loyal followers. Take Nordstrom’s rewards program, for example. It goes beyond discounts, offering exclusive invitations to in-store events, private trips to top designer showrooms and access to fashion experiences unavailable to the general public. These are coveted opportunities that customers are eager to pay for—and they often sell out. More from Ad Age: And while premium perks make happy customers a little bit happier, true loyalty is tested by how brands respond when things go wrong. According to Gartner, companies that fail to deliver a smooth service experience are 4x more likely to drive disloyalty than loyalty. This disconnect is especially visible in industries such as air travel. Brand and rewards marketing incentives can feel warm and inviting, but when a flight is canceled or baggage goes missing, the customer experience often falls apart, and we all hear about it on social media. More: Tracking ad agency account reviews—the latest on brand creative, media and more That’s why companies can’t afford to separate loyalty programs from customer care—brands that treat loyalty as an extension of the overall customer experience are the ones that win. Uber, for instance, offers a compelling example of this integration in action. Through Uber’s rewards program, I don’t just earn points—I receive tangible service enhancements such as priority customer support and flexible cancellation options. Anytime I encounter an issue—whether it’s a delayed driver or a billing error—Uber’s care team, informed by loyalty status, steps in with clear solutions. By aligning loyalty benefits with elevated service response, Uber ensures that I feel recognized and valued—and keeps me coming back. Focus on measuring more than transactions If you’re measuring only spend, you’re missing the full picture. Consider the customer who writes glowing reviews, shares your content and defends your brand on Reddit—yet shops sparingly. LEGO revamped its Insiders Program to allow members to earn rewards for registering sets, sharing builds, participating in community challenges and engaging with content. This engagement model expands the definition of customer value, rewarding emotional investment as well as financial. It’s another example of success in building long-term customer value across a multi-generational fan base. Sometimes, it’s OK to keep it simple Not every brand needs a loyalty program. For some categories, consumers just want quality and convenience. But even here, personalization and data can refine the experience. My local Shell station taps into first-party transaction data to deliver timely fuel discounts and automatically apply loyalty points at the pump. It’s straightforward, efficient and all I really need. Shift loyalty to real relationships As marketers, we must stop conflating repeat behavior with brand loyalty. True allegiance is emotional—it’s built when consumers feel understood, appreciated and empowered. Loyalty 2.0 isn’t just about better perks. It’s about building a system that says: we know you, we value you, and we’re here for the long run. Don’t miss: Join Ad Age at the 2025 Cannes Lions International Festival of Creativity

Why loyalty programs should move beyond points and perks

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