Loyalty programmes used to be simple: spend money, earn points, redeem rewards. But the rules have changed. Consumer expectations have outpaced the traditional playbook faster than most organisations anticipated, and the gap between what brands offer and what customers actually value continues to widen.
Rethinking loyalty programme strategy is no longer something to push to the next planning cycle; it has become a pressing commercial priority. Brands that recognise this early will shape the next era of customer loyalty. Those that do not risk seeing their programmes fade into the background of an increasingly crowded wallet.
When more programmes mean less loyalty
According to the BCG Loyalty Program Survey 2024, US consumers now belong to an average of over 15 loyalty programmes, up roughly 10% in just two years. Over the same period, engagement dropped by 10% and overall loyalty declined by 20%. The pattern is clear: more programmes, more noise, and less return.
Around 85% of US consumers still rank points and cash back in their top five desired benefits. But that ubiquity has become a liability. A loyalty programme strategy built primarily on points is, at this stage, more likely to blend in than stand out.
A global problem in the making
The picture outside the US looks different, for now:
- United States: Saturated, with engagement and loyalty in measurable decline across grocery, restaurant, and hotel segments.
- Europe: Consumers belong to around nine programmes on average, roughly mirroring where the US stood just a few years ago.
- Asia-Pacific: Consumers lean towards mobile payment ecosystems, partnership benefits, and personalised experiences, with only 55% ranking points among their top five benefits.
The trajectory is telling. Saturation is not unique to the US; it signals what loyalty programme strategies in other markets are likely to face next. Brands with global ambitions need to reassess their loyalty programme strategy now, before similar fatigue sets in.
What younger consumers actually want
Younger consumers are accelerating this pressure. A Deloitte study suggests that around 89% of Gen Z consumers say they are willing to share personal data in exchange for tailored offers. Over 90% of Gen Z and millennials find at least one tech-enabled loyalty feature valuable, compared to 73% of baby boomers.
This willingness to share data comes with a clear expectation: the benefits need to be clearly tangible and contextually relevant. Across age groups, 72% of consumers say a loyalty programme makes them more likely to spend with a brand. The challenge lies in execution.
The case for a paid loyalty programme
One approach gaining traction is the paid loyalty programme. When a consumer actively chooses to pay for a membership tier, it signals a level of intent that a free sign-up rarely matches. These customers typically expect more and engage more in return.
A paid loyalty programme offers three distinct advantages:
- Higher-quality engagement: Paid members are more likely to use their benefits actively, generating richer and more actionable behavioural data.
- Sharper personalisation: A self-selected, higher-intent audience allows for more precise targeting and relevance.
- Clearer value articulation: Brands must define and deliver tangible, differentiated value because members will not renew if the benefits fall short.
First-party data: The infrastructure underneath
Delivering personalised and relevant loyalty benefits at scale depends heavily on first-party data. A loyalty programme without a coherent data strategy risk becoming little more than a discount mechanism. Leading brands treat data collection as an ongoing relationship.
They encourage members to continuously share and update preferences, such as purchase behaviour and communication habits, and use this intelligence to deliver timely, relevant experiences across channels. First-party data is not just a safer alternative to third-party tracking; it underpins how modern loyalty programmes operate and scale.
Omnichannel loyalty is no longer optional
Delivering consistent, data-driven experiences is where omnichannel loyalty becomes operationally critical. Consumers do not think in channels. They move between apps, stores, websites, and service interactions with the expectation of continuity.
Brands that still separate in-store and digital loyalty experiences introduce friction at key moments in the journey. Even small inconsistencies can impact engagement and retention. A connected, omnichannel loyalty approach is no longer a differentiator; it is now a baseline capability.
Making sense of loyalty programme ROI
Measuring loyalty programme ROI remains complex. The core challenge remains attribution: many programmes enrol customers who are already loyal, making it difficult to isolate incremental impact.
Analytical approaches such as pre/post comparisons, A/B testing, and difference-in-difference modelling can help, but each comes with methodological limitations. The priority is to move beyond surface-level metrics, such as membership counts or points issued, and focus on indicators tied to commercial outcomes, including customer lifetime value, purchase frequency, and active redemption rates.
Leading organisations track these consistently and refine their models over time, rather than relying on periodic reviews.
Where this goes next
Brands most likely to lead the next era of loyalty will not succeed by simply layering new features onto existing programmes. Instead, they will rethink the relationship from the ground up, treating loyalty not as a system to manage, but as an experience to continuously earn.
Infosys BPM partners with organisations to design and operationalise loyalty programme strategies that deliver measurable outcomes. Explore our travel and hospitality loyalty solutions to learn how we can help you design and scale high-impact loyalty programmes.
Frequently asked questions
Measuring incremental ROI requires shifting from membership counts to tracking Customer Lifetime Value (CLV) and active redemption rates. Advanced analytical models, including A/B testing and difference-in-difference modelling, are essential to isolate true incremental spend from existing brand affinity, ensuring loyalty investments drive genuine, measurable behavioural shifts rather than just subsidising existing customers.
First-party data acts as the critical infrastructure for hyper-personalisation, moving loyalty beyond generic discount mechanisms. By incentivising members to share granular behavioural preferences, organisations build a resilient data ecosystem that powers contextually relevant experiences. This direct intelligence allows brands to bypass the noise of traditional point-based systems and deliver high-impact, individualised value.
Paid loyalty tiers secure high-intent customers who demonstrate significantly higher engagement and active benefit utilisation. This model provides richer behavioural data and clearer value articulation, as renewal depends on tangible utility. Strategically, it shifts loyalty from a cost centre to a value-added service that generates predictable revenue while enabling sharper, data-driven personalisation.
Omnichannel integration eliminates friction by ensuring continuous data flow between mobile apps, physical properties, and service interactions. For enterprise scalability, a unified customer view is essential to prevent fragmented experiences that erode trust. A connected ecosystem allows for real-time rewards and recognition, which is vital for maintaining brand relevance in an increasingly crowded market.
Global strategies must pivot from point-heavy models to experience-centric frameworks in regions like APAC, where mobile-first ecosystems and partnership benefits are prioritised. Leaders should move away from standardised global templates and instead focus on regional ecosystem integration and non-monetary rewards to combat the engagement decline currently observed in more saturated Western markets.
