Loyalty programs are designed to create a mutually beneficial relationship where brands get repeat business and in return, customers get rewarded. Yet despite billions invested globally in loyalty technology, rewards, and ongoing program management, many programs are quietly failing at the very thing they were designed to do—put customers first. As a result, customers ignore most loyalty programs.

The uncomfortable truth is this too many loyalty programs are built around what’s easiest for the brand, not what’s meaningful for the customer. The result? Most loyalty programs are boring. This leads to disengaged members, unredeemed rewards, declining participation, and a growing perception that “loyalty” is just another marketing tactic rather than a genuine relationship.

Let’s explore where brands are getting it wrong, and why customers are noticing.

Lack of personalisation

“Personalised” has become one of the most overused terms in loyalty marketing, with many brands believing they are delivering to personalisation by using first names in emails, executing location-based push notifications or promoting blanket “recommended offers” to members. However what this often translates to is irrelevant rewards and repeated offers that go unused.

Too often brands are choosing to treat all of their members the same rather than delivering an experience that is personalised to their wants and needs. Over time, members start to disengage because they feel like the program isn’t designed for them.

Real personalisation needs to go beyond surface-level tactics by:

• Reflecting actual member preferences
• Adapting offers based on past behaviour
• Acknowledging channel, timing or content preferences
• Using zero-party data members have provided

A key focus of a loyalty program should be creating a strong value exchange where members are rewarded for providing their data with the additional promise of delivering more personalised communications, rewards and overall experience.

Rewards with no meaningful value

When designing a loyalty program, the single most important factor is value. A loyalty program can tick every other box but if it fails to deliver meaningful and relevant value to the member, then the program will fail to maintain engagement and attract new customers.

Many programs fall into the same trap of offering:

• Low value discounts
• Rewards that take too long to earn
• Low-value currency earn (e.g., points) with unclear redemption pathways
• Rewards that are not aligned to the brand and are therefore irrelevant to the member
• Member benefits that are not clearly communicated

From a member’s perspective the effort rarely feels worth the return.

In addition to this, a key sign of a program with no meaningful value is one that fails to build on the emotional connection with members. Loyalty isn’t built on points or discounts alone, it is built on how an experience makes someone feel. When rewards are hard to understand, hard to redeem or lack relevance, members can quickly identify that the program exists to benefit the brand, not the member.

Value doesn’t always mean expensive. It can mean providing something that is relevant, timely, easy to access and aligned with what the member actually wants.

No structured member lifecycle strategy

One of the most fundamental flaws in loyalty programs is the absence of a clearly defined member lifecycle.

Many brands still communicate with loyalty members as if they’re all in the same place. Sending identical messages, offers, and rewards regardless of whether someone joined yesterday or has been a top customer for ten years.

Why this fails members:

• New members need onboarding, education, and early wins
• Active members need reinforcement, progression, and recognition
• High-value members expect exclusivity and appreciation
• Lapsing members need relevance and re-engagement
• Dormant members need a reason to care again

Without lifecycle recognition, brands miss critical moments where loyalty is either built—or lost. A welcome offer sent six months too late, or a generic discount sent to a VIP, signals one thing clearly: “We don’t really know you.”

True customer-centric loyalty programs meet members where they are, not where the brand’s campaign calendar happens to be.

Purely focusing on transactions, ignoring engagement

One of the most common loyalty blind spots is a brand’s obsession with spend, with many programs focusing purely on rewarding purchases, frequency and basket size alone. Whilst it is important to ensure the program is being used to drive incremental spend, it cannot be the only factor of a loyalty program.

Many loyalty programs only “wake up” when a purchase happens. Between transactions, customers hear nothing, or receive generic promotions unrelated to their loyalty status. This creates long stretches of silence where the relationship goes cold.

Brands miss opportunities to educate customers on how to earn or use rewards, celebrate milestones or anniversaries, encourage non-purchase engagement and build emotional connection beyond buying

An effective way to maintain engagement between purchases is by rewarding non-transactional behaviours. For example:

• Completing their profile
• Attending events
• Downloading the brand’s app
• Following socials
• Browsing content
• Playing digital games
• Referring friend

When these behaviours go unrecognised, members receive a clear message, “We only care about you when you spend money.”

Loyalty programs should be consistently recognising these types of relationship-building behaviours, particularly for brands with a lower purchase frequency to ensure their brand stays top of mind.

Set-and-forget mentality

Brands will invest a significant amount of time and money into designing a loyalty program for their customers. What many brands fail to do is consistently evolve the program to meet the changing needs of their members.

If a loyalty program feels dated, rigid, or disconnected from the broader brand experience, customers will often mentally opt out, even if they stay enrolled.

In an era where nearly every brand out there has a loyalty program, failing to evolve the program will have a significant impact on acquisition, engagement and retention.

It’s crucial that brands have a clear pathway to evolution with a detailed roadmap that outlines what rewards, experiences, and additional program elements will be added to keep the program fresh and interesting. In addition to this brands must continuously audit the program, measuring the performance using pre-defined KPI’s to asses what is and isn’t working effectively.

Let’s put customers back at the centre of loyalty

To summarise, a truly customer-centric loyalty program is one that:

• Recognises where each member is in their lifecycle and executes communications and offers accordingly
• Delivers genuine personalisation
• Provides meaningful, and relevant value that engages the member
• Rewards engagement, not just spend
• Is transparent, flexible and easy to use
• Builds emotional connections
• Evolves alongside customer expectations

Loyalty should feel like a relationship, not a spreadsheet.

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