Marketers must constantly adapt to shifting consumer attitudes and behaviours. In recent years, three key trends have emerged that are shaping the design of loyalty programs.
One trend has been that the buyer journey is now far more self-directed. As consumers have become smarter about getting what they want on their terms, aided by tools like price comparison shopping sites and apps, brands have been trying to play ‘catch up’ to the consumer.
Secondly, spending patterns are shifting due to the post-pandemic cost-of-living crisis, which has boosted ‘conscious consumption.’ According to the 2025 Marigold Consumer Trends Index survey, convenience, product quality, and customer service are rated ahead of price in purchase decision-making. Incredibly, the survey also revealed that 68% of consumers were willing to pay more for a brand they love.
Thirdly, there is a continued reliance on technology in purchase decision-making. Brand loyalties are tested as people navigate between numerous devices, apps, and platforms to suit their shopping needs. It’s no surprise that omnichannel strategies have never been more important.
So, how are brands ‘catching up’ to consumers? Simply put, they are re(de)fining their customer experience.
Creating the ideal customer experience requires a balanced blend of rational and emotional connections.
A rational relationship focuses on tangible, immediate benefits that drive purchase decisions, such as discounts, offers, availability, product trials, pre-sales support, and delivery. In a loyalty program context, this is known as the Transaction Model, which relies on a cycle of buy-earning-redeem. Its limitation is that purely transactional plans are harder to differentiate and are difficult to measure the program’s impact on sales and overall ROI.
The thinking behind this model can be described as “More transactions = more satisfaction.”
An emotional relationship evolves and builds on intangible elements like trust, connection, and expectations. It stems from how a product or service makes customers feel and the recognition they receive from the brand. This is the Experience Model, which more deeply engages customers through gamified content, reviews, referrals, social connections, and money-can’t-buy experiences that foster brand advocacy, create a sense of community, and are vital for retaining high-value customers.
The focus on emotional-based connections has led to the rise of this model, which shifts the thinking to “More interactions = more satisfaction.”
The Experience Model adds gravitas to a loyalty program by rewarding non-transactional engagement. Consumers share their data in exchange for rewards and points through activities like playing games, participating in challenges, taking quizzes and polls, writing reviews and referrals, and making social media connections. These are no-strings-attached, non-transactional interactions with no hidden requirements.
Brands are redefining the customer experience, leading to more effective sales attribution models that connect non-transactional interactions to future purchases. A recent example is the KFC Rewards program in the USA. Over one million members receive personalised offers and extra points-earning opportunities by completing ‘challenges’ – including purchasing specific menu items to increase repeat store visits.
A loyalty program must ultimately increase retention, engagement, and repeat purchases by offering appealing benefits and personalised experiences. In an environment where consumer attitudes and behaviours are constantly shifting, a comprehensive loyalty program will integrate both the Transaction and Experience models, ensuring that rewards are not simply the offer of a future discount.
Customers are loyal to experiences, not simply brands. It’s no coincidence that the most loyal customers favour brands that create the most memorable experiences and pay more for the privilege.
