What Today’s Loyalty Programs Get Right—and Where They’re Still Falling Short
Loyalty isn’t what it used to be—and that’s not necessarily a bad thing. Recent research from SAP and Emarsys reveals a major shift: 57% of U.S. consumers no longer show true loyalty to consumer product brands. That’s more than half the market essentially saying, “We’re not committed. Give us a reason to be.”
And it’s not just a trend—it’s a warning shot. The traditional structure of loyalty programs, built mostly around points, discounts, and purchases, is losing relevance. These once-effective tactics now feel transparent, even manipulative. Customers are asking sharper questions: What’s in it for me? Do I actually feel valued—or just managed?
As Meghann York, Global Head of Product Marketing at SAP CX, put it:
“Customers are kind of like, ‘So you’re just honestly getting me to buy more of your stuff… what’s really in it for me?’”
It’s a blunt truth. But one worth paying attention to.
Loyalty Is Evolving—Fast
The SAP research shows that value-based loyalty—when customers stick with brands that align with their values—is on the rise. Meanwhile, inherited loyalty (shopping where your family did) and silent loyalty (sticking around without much thought) are in decline.
Consumers, especially younger ones, are no longer passive. They’re aligning their spending with brands that reflect who they are—or who they want to be. Sustainability, inclusivity, social good, ethical sourcing—these aren’t just buzzwords. They’re the new loyalty currencies.
For brands, this means the old playbook doesn’t work anymore. Points-for-purchases isn’t enough. It might even be counterproductive if customers feel manipulated rather than appreciated.
The Loyalty Gap: Feeling Valued vs. Feeling Targeted
Only 17% of consumers feel genuinely valued by the brands they buy from. That’s the headline stat—and it’s damning.
This gap between how brands think they’re performing and how customers feel is the real loyalty problem. Marketers have access to powerful tools—personalization engines, real-time data, AI, customer journey maps—but if they’re used to drive sales instead of build trust, the result is just more noise.
And the customer knows it.
What Gen Z Is Teaching Everyone About Loyalty
Much of the shift is being driven by Gen Z, a generation that grew up with unlimited access to brands, products, and information. They can spot insincerity instantly—and they act fast.
The research highlights what breaks loyalty with Gen Z:
- Mishandling personal data (27%)
- Overwhelming marketing messages (27%)
- Charging for returns (26%)
- Ignoring loyal customers (18%)
- Generic experiences with no personalization (14%)
These aren’t just annoyances—they’re loyalty deal-breakers.
On the flip side, here’s what earns loyalty:
- A useful, engaging brand app (43%)
- Memorable experiences (27%)
- A strong, relatable social media presence (23%)
- Smart use of AI to enhance shopping (22%)
- Working with credible influencers (17%)
These are not just tactics—they’re signals that a brand “gets it.” They show that the brand is interested in adding to the customer’s life, not just extracting value from it.
Loyalty Is No Longer Just a Program—It’s a Strategy
One of the biggest shifts underway is how we define “loyalty” in the first place.
It’s no longer about rewards cards or email points statements. It’s about the quality of the relationship between the customer and the brand. Loyalty is becoming less transactional and more relational.
That means personalization needs to level up. It’s not enough to recommend products. It’s about using what you know (ethically and transparently) to enhance the experience, remove friction, and show that the brand is actually listening. As York notes,
“It’s about ensuring that you are getting information from your customers and using it very wisely—in a way that benefits them.”
Trust is now part of the loyalty equation.
What This Means for Brands Moving Forward
If loyalty is the outcome, then experience is the driver.
Loyalty programs that work today:
- Respect customer data and use it responsibly.
- Reward behavior beyond purchases—advocacy, feedback, social engagement.
- Connect with values, not just wallets.
- Scale personalization, but never at the expense of relevance or privacy.
- Invest in digital experiences—apps, content, channels—that customers actually want to use.
In short, the brands winning at loyalty aren’t the ones pushing harder. They’re the ones listening better.
Loyalty, in this era, is earned. And for brands willing to put in the work, the payoff—longer relationships, higher lifetime value, and true advocacy—is well worth it.
