Do Loyalty Programs Really Engage Customers?
From coffee chains to supermarkets, airlines to mobile apps, many brands offer loyalty programs. Points accumulated with every purchase, special discounts, VIP customer privileges… But do these really work?
While brands invest heavily in loyalty programs, whether these systems truly retain customers is a subject of debate. Some argue that these programs are merely superficial incentives, while others believe they help customers build a deeper connection with the brand.
What is a Loyalty Program?
A loyalty program is a systematic reward mechanism designed to encourage existing customers to maintain their relationship with the brand. These programs typically offer:
• Point accumulation and point-based shopping
• Discounted offers and promotions
• Free products or services
• VIP membership benefits (priority service, early access, etc.)
• Surprises on special occasions such as birthdays and anniversaries
The goal is to prevent customers from turning to other brands and to encourage repeat purchases.
Customer loyalty programs not only offer economic advantages, but also target human psychology. These programs are based on the following psychological triggers:
1. Gamification
Gamification strategies are used to create behavioral habits by giving users goals such as points, badges, and levels. Customers feel like they have “moved one step further” with each purchase.
2. Loss Aversion
The fear of losing accumulated points or opportunities pushes customers to make more purchases. This emotional pressure ensures the continuity of the loyalty program.
3. Sense of Belonging
Customers who participate in the loyalty program feel “chosen” and special. This leads to a deeper connection with the brand.
4. Sunk Cost Effect
After investing time and money in the program, it becomes more difficult for customers to leave the brand. This is because their current accumulation would be “wasted.”
Does it really build loyalty?
Short-term impact: Yes
Numerous studies show that loyalty programs increase customer repeat business in the short term. These programs are particularly appealing and attractive for newly launched brands or products.
Long-Term Effect: Only If Properly Designed
Loyalty programs that only award points but offer a poor customer experience are short-lived. Customers may become opportunistic users who come only for the benefits, rather than being loyal. Therefore, a loyalty program must meet the following conditions:
• Make the user feel valued
• Be simple and easy to use
• Align with the brand’s overall experience quality
Otherwise, you will encounter the “false loyalty” profile, where customers leave as soon as the discount ends.
Why Do Failed Loyalty Programs Not Work?
Not every loyalty program is guaranteed to be successful. Those that fail usually fall into the following pitfalls:
• Complexity: Rules, terms of use, or point values are unclear.
• Insufficient Rewards: Customers put in effort but do not see any meaningful benefits in return.
• Temporary Campaign Perception: It is unclear whether the program is ongoing.
• Poor Customer Experience: No matter how good the program is, loyalty cannot be achieved if customer service is poor.
• Hidden Costs: Surprise costs such as shipping fees or limited usage conditions erode trust.
When properly designed, loyalty programs truly engage customers. However, it should not be forgotten that loyalty is built not only through promotions, but also through experience, trust, and emotion. Customers remain loyal to brands that make them feel valued, respect their time, and understand their needs.
