Loyalty programs are everywhere. What started with the airlines has grown to encompass almost all travel companies, most retailers, restaurants and even insurance, CPG, and cable companies. The marketplace today is flooded with points, perks, and promises.
Loyalty programs have long been at the core of customer engagement. From airline miles to coffee punch cards, brands have relied on rewards to build lasting relationships. But today, many consumers are experiencing something new: loyalty fatigue.
What Is Loyalty Fatigue?
Loyalty fatigue happens when customers stop seeing value in a loyalty program—or in loyalty programs altogether. Instead of feeling rewarded, they feel:
- overwhelmed by too many programs
- frustrated with confusing rules, tiers, and redemption processes
- underwhelmed by generic offers that don’t fit their needs.
Several forces can fuel loyalty fatigue:
- Customers juggle an average of 15 loyalty memberships but are only active in about half of them.
- The value of the program feels diluted or it takes too long to earn a valuable reward.
- ‘Delayed gratification is when customers lose interest if it takes too long to accumulate points and redeem rewards.’1
- In an inflationary environment, customers prioritize immediate savings over long-term rewards.
- One-size-fits-all campaigns don’t resonate. Consumers expect personalization.
Strategies to help keep your loyalty program fresh
Here are strategies forward-thinking brands are using to keep loyalty fresh and meaningful:
1. Shift focus from Points to Personalization
Rewards programs may get customers initially, but personalization keeps them coming back. Use zero-party data, which is data customers willingly share about preferences, to tailor rewards, product recommendations, and experiences.
2. Reward Beyond Transactions
Loyalty is a lot more than rewarding customers for purchasing. In fact, non-purchase loyalty is actually most important. It creates truly loyal customers and maintains margins. Consider rewarding customers for:
- Writing reviews
- Customer longevity within a program
- Creating wishlists
- Engaging with brand content & gamification if applicable
- Attending Member events
- Referring friends
- Sharing feedback or preferences
This type of engagement creates a richer, more emotional bond with your brand.
3. Add Surprise and Delight
Customers love unexpected recognition. Exclusive early access, birthday perks, surprise tier recognition or gifts and personalized picks tailored for the individual can cut through the noise of transactional rewards.
4. Emphasize Experience, Not Just Discounts
Today’s consumers—especially Gen Z—value experiences as much as monetary perks. Think early access to events, VIP communities, or behind-the-scenes access instead of just coupons.
5. Keep It Simple
Overly complex rules drive disengagement. Customers should always know:
- How they earn rewards
- What those rewards are worth
- How to redeem them easily
Clarity builds trust, and trust drives loyalty. (Read our take about The Effectiveness of Simplicity and Transparency in Loyalty Programs, where we go through this in more detail).
The Takeaway
Don’t just reward loyalty. Earn it.
Ultimately, the key to overcoming loyalty fatigue is to create a loyalty program that genuinely adds value to the customer experience and makes customers feel recognized, appreciated, and rewarded for their loyalty. Brands that succeed in doing this will build stronger, more loyal customer relationships and drive long-term growth.
- True Loyal; How to overcome loyalty fatigue
