Loyalty programme performance in the value era

Key takeaways:

1. Loyalty programme performance should be judged by commercial impact, not participation alone.
2. Most loyalty scheme underperformance stems from friction rather than weak incentives.
3. AI is reshaping how loyalty programmes prove their value.

Loyalty is in its value era.

Every industry has its eras. Taylor Swift has built an empire out of reinventing hers. Loyalty is going through something similar – not a costume change, but a shift in maturity.

For years, loyalty programmes were positioned primarily as retention tools. Points, tiers and promotional mechanics were designed to encourage repeat purchase, and success was judged by how often customers returned. That framing no longer reflects the commercial pressures retailers face today.

As acquisition becomes more expensive and paid media less predictable, brands are reassessing where sustainable growth truly comes from. Increasingly, it comes from existing customers. Recent global research reinforces this shift. Antavo’s latest Global Customer Loyalty Report shows that more marketing budget is now directed toward existing customers, rather than acquisition.

Describing this as a ‘value era’ reflects a real change in expectations. Loyalty programme performance should no longer be measured by sign-ups or redemptions alone. It should be judged by whether it creates meaningful value for customers and sustainable revenue for the retailer.

We recently interviewed Antavo’s Co-Founder and Chief Strategy Officer Zsuzsa Kecsmar on Antavo’s Global Customer Loyalty Report 2026 – here are the headlines:

Friction limits the impact of loyalty programmes.

Participation in loyalty programmes remains high, so loyalty itself is not the problem. The issue lies in how programmes are experienced day to day.

Customers frequently describe operational frustrations that weaken engagement over time. These include:

• Rewards that take too long to earn
• Benefits that are unclear or poorly explained
• Points expiring earlier than expected
• Recognition that feels inconsistent

Each issue may appear small in isolation. Together, they reduce perceived value. When rewards feel distant or complicated, customers disengage gradually rather than abruptly. They stop checking balances, delay redemption or simply lose interest.

Improving loyalty programme performance often starts with removing these friction points. Making rewards easier to understand and quicker to reach can have more impact than increasing incentive levels. Performance weakens not because loyalty is outdated, but because unnecessary complexity slows momentum.

Points issued do not equal performance.

Loyalty programmes frequently create tension between marketing and finance teams. From a financial perspective, issued points represent future cost, and growing balances can appear risky. That concern is valid, particularly in uncertain economic conditions.

However, points that are never redeemed do not signal strength. If customers accumulate value without acting on it, the programme is not meaningfully influencing behaviour. Redemption provides a clearer indication of loyalty programme performance because it demonstrates that rewards are motivating action.

When performance is assessed through repeat behaviour, redemption and sustained revenue growth rather than issued balances alone, the evaluation becomes more accurate. Loyalty should be accountable, but accountability should reflect customer behaviour rather than accounting entries.

Performance improves when programmes evolve.

Many organisations still treat loyalty as a large-scale launch designed to run unchanged. In practice, strong loyalty programme performance is rarely static. It develops over time.

Successful programmes start with a clear proposition and refine it gradually. They observe how customers respond and adjust thresholds, rewards and communication accordingly. If making changes is slow or technically complex, performance declines because the programme cannot adapt.

Customer expectations evolve quickly, and loyalty programmes must do the same. Flexibility is central to maintaining relevance. Programmes that evolve in response to behaviour sustain performance more effectively than those that remain fixed.

AI is helping improve loyalty programme performance.

AI is increasingly embedded in how loyalty programmes are managed. Its value lies in improving responsiveness rather than replacing human judgement. Behavioural patterns can be identified sooner, and emerging friction can be addressed before it affects engagement at scale.

The benefit is not automation for its own sake. It’s better timing and clearer visibility. AI shortens the distance between insight and action, allowing teams to refine programmes continuously.

In competitive retail environments, faster learning translates into stronger loyalty programme performance over time.

Long-term performance depends on experience.

Despite advances in data and automation, loyalty remains emotional. Customers do not consistently return because they’ve optimised reward calculations. They return because the overall experience feels worthwhile and dependable.

Incentives influence short-term behaviour, but long-term loyalty programme performance depends on sustained preference. When programmes reinforce positive interactions rather than relying solely on mechanics, customers become less sensitive to price and more inclined to return.

That transition from transaction to experience defines loyalty in the value era.

Loyalty performance is under greater scrutiny.

Expectations around loyalty have increased. Investment continues, but so does the pressure to prove results. Participation numbers and redemptions are no longer sufficient indicators of success.

The strongest loyalty programmes typically:

• Remove friction throughout the customer journey
• Make value visible early and consistently
• Adapt based on real customer behaviour
• Measure success through revenue growth

When loyalty is judged by whether it drives repeat behaviour and profitable growth, it becomes a core commercial lever rather than a supporting tactic.

At HyperFinity, we help retailers improve loyalty programme performance by building the intelligence that turns customer behaviour into action. Want to explore what that looks like? Get in touch.