The Future of Loyalty is Personal

If loyalty programs work, why are customers less loyal than ever? Every day, customers make dozens of decisions about where to spend their money. They are bombarded with offers, discounts, and rewards programs—yet many of these efforts fail to create lasting loyalty. 

A recent Boston Consulting Group study found that while [loyalty program enrollment is up 10% over the past two years](https://www.bcg.com/publications/2024/loyalty-programs-customer-expectations-growing), actual engagement has declined, with participation rates dropping by 10% and overall brand loyalty decreasing by 20%. This suggests that brands must work harder to create meaningful engagement. Loyalty can no longer be achieved through a passive sign-up; it must be earned through an active, valued relationship.


Yet many brands still cling to outdated loyalty models that prioritize transactions over experiences. This mindset prevents them from delivering the meaningful interactions customers now expect. Customers are no longer satisfied with points alone, they want brands to recognize and anticipate their needs, providing experiences that feel uniquely personal.

This signals a growing tension: customers want relationships, not just rewards. The most successful brands will move beyond transactions and cultivate loyalty through personalized, meaningful engagement.

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For too long, personalization has been treated as a tactic, something to sprinkle into campaigns rather than a guiding principle. In reality, personalization is not a single moment; it’s a system that enables brands to serve customers better at every touchpoint. 

Effective personalization is contextual, grounded in timing, emotion, and need, reflecting what’s happening in a customer’s life, and addressing their emotional or situational state. It is behavioral, responding to what customers do (or don’t do) and the signals they send, rather than relying solely on static profiles. And it is adaptive, evolving alongside the relationship so the experience grows richer and more relevant over time. Built this way, personalization becomes more than a marketing tool—it connects the dots across CRM, lifecycle, loyalty, and service, transforming fragmented efforts into a coordinated, responsive system. 

This is also where AI has the potential to elevate the experience: not by simply automating touchpoints, but by listening, learning, and responding at scale. Used effectively, AI can detect patterns, uncover intent, and respond in real time, turning customer signals into opportunities to serve, not just sell.

From Touchpoint to System: Rethinking Personalization

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Consumer behavior is shifting constantly. And so must we. The brands that win are the ones that meet customers where they are—and where they’re going.

They don’t just recognize you; they adapt to you. They use real-time data to shape the entire experience, not just the marketing message. They create continuity and relevance, designing systems that respond to customer needs in the moment and serve them better over time. And if you do that well, the customer stays.

This is the power of contextual relevance. Loyalty is driven by relevance—and relevance is powered by timing, personalization, and adaptability. Simply offering rewards won’t drive lasting engagement; brands need to seamlessly weave those rewards into the customer journey, making interactions feel natural, intuitive, and anchored in the customer’s current context.

Starbucks has mastered this approach by embedding loyalty into the daily routines of its customers. Rather than positioning rewards as a separate perk, Starbucks Rewards makes earning and redeeming feel like a natural extension of the brand experience. By leveraging real-time data, the program personalizes offers based on purchase history, location, and seasonal habits—encouraging repeat visits in ways that feel effortless rather than transactional. This frictionless integration of loyalty, combined with mobile ordering, exclusive perks, and surprise-and-delight moments, fosters a deeper emotional connection and makes Starbucks a habitual choice rather than just a convenient one.


The Power of Contextual Relevance 

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A global financial services firm recognized that the first 12 months of a customer’s experience were critical to long-term retention. Expanding beyond their previous focus on just the first three months, they partnered with R/GA to develop a strategy fostering deeper engagement. Since many new card members disengage within their first year, we designed a program to nurture product education and habit formation, ensuring customers fully experience their card’s value. By aligning key messages to critical moments—some tied to known friction or celebration points, others triggered by real-time behaviors—we delivered personalized content, proactive education, and well-timed offers, increasing engagement, reinforcing trust, and strengthening brand affinity from the outset.

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Transactional rewards can only take loyalty so far. The next frontier is emotional loyalty: building a relationship where customers feel seen, valued, and connected to a brand’s purpose. Loyalty isn’t about programs, it’s about people. They tend to form deeper, lasting bonds with experiences than with things. Brands that successfully create emotional loyalty become part of how customers define themselves—the alignment between personal values and brand values creates a sense of shared identity that transcends functional benefits. Loyalty grows when brands understand customer needs through real conversation and insight. While data can inform, it’s stories that stir the heart—sparking emotions like joy, trust, or nostalgia that forge lasting bonds with brands. By crafting narratives that resonate on a human level, we can design campaigns that not only capture attention, but also ignite inspiration. Facts may explain, but stories compel.

Lululemon exemplifies this shift by prioritizing engagement over transactions. Instead of relying solely on discounts, its membership program rewards participation with free fitness classes, early access to new product drops, and exclusive events. By encouraging engagement through wellness and community-driven experiences, Lululemon fosters relationships that extend beyond purchases. Whether through guided meditation, in-store yoga, or personal coaching content, the brand ensures that loyalty is about lifestyle, not just sales. This seamless integration of engagement into customers’ daily routines builds lasting emotional connections, turning occasional shoppers into lifelong brand advocates.

Similarly, R/GA developed a hyper-personalized communications approach for a global payments provider, positioning wealth-building as an ongoing journey rather than a series of transactions. Instead of one-size-fits-all communications, we designed a strategy that offers tailored insights aligned with each client’s investing habits, encouraging healthy financial behaviors. By shifting from transactional interactions to relationship-driven engagement, we helped transform the brand’s role from a service provider to a trusted financial partner. This evolution is not only strengthening brand perception, but also ensuring customers feel supported, informed, and empowered.

The future of loyalty will be defined by brands that take specific actions to deepen customer relationships:

**1. Measure loyalty beyond transactions.** Move past financial metrics by tracking engagement, advocacy, and emotional connection through sentiment analysis, surveys, and qualitative insights.
**2. Deliver adaptive experiences.** Use AI-driven personalization to respond to customer behaviors and preferences, providing timely, relevant, and seamless interactions.
**3. Create value-driven engagement.** Move beyond discounts to create meaningful interactions with experiential rewards, personalized content, and exclusive access.
**4. Embed loyalty across the journey.** Ensure loyalty is integrated at every touchpoint, making customers feel recognized and valued from the first interaction.

Customers are demanding more: more relevance, more connection, and more value. Brands that embrace this shift will forge stronger, more profitable customer connections. Those that fail to adapt risk fading into irrelevance.

Now is the time to rethink loyalty—not as a program, but as a core business strategy that fosters meaningful, long-term relationships. You must ask yourself: Will your brand evolve with customer expectations, or will it be left behind?


R/GA, Marketing Agency

The Future of Loyalty is Personal