Crafting loyalty programs to deepen connections between brands and customers

By Renata Freund

Most loyalty programs don’t fail because customers don’t sign up. They fail because customers quickly disengage. The game isn’t won at the time of enrollment; it’s won in continued engagement.

The brands that see a positive ROI from their loyalty programs are the ones that keep attention over time, turning a transaction into a relationship.

The key? Motivation × Ability × Prompt = Active Engagement.

When you don’t deliver to one of these elements, you won’t cut through the market. Here’s how they work and how you can leverage them to win when building your loyalty program from the ground up.

1. Motivation: They have to want it

At its core, motivation is about why your customers engage. And not all incentives are created equal.

There’s no universal formula for success. No one benefit structure is inherently better than another. The data proves that the “best” reward structures are those that fit most organically and intuitively with your brand, your customer journey, and how customers shop the category. Points structures might work for some; exclusive experiences or gifts might make more sense for others.
Overdeliver on value. The brands that outperform in loyalty don’t just meet expectations, they exceed them. Value can be financial, emotional or experiential, but ultimately what matters is that it feels generous and triggers the law of reciprocity – essentially creating a natural desire for customers to give value back to the brand.
Make it a reward, not a transaction. The top-performing loyalty programs are just that – rewards. The way we cognitively process rewards depends on how they’re framed. It needs to feel like a gift or a thank you, not a transaction. For example, cognitively, a voucher feels like a gift; a discount feels like a deal. Even when the value is identical, the brain codes them differently and gifts build stronger emotional connections.

While most of the market focuses on driving motivation, curating and refining program benefits to boost membership, for the vast majority of programs, the real shortfall in sustaining engagement lies in Ability and Prompt

2. Ability: Make it easy

Even the most motivated customer won’t engage if it’s too hard. Where most brands with high membership and low engagement are falling short is in the friction they create, making it difficult for customers to easily and seamlessly use and benefit from their program.

When customers can’t connect, earn, or redeem with minimal effort, engagement drops quickly. Ability is about reducing friction at every touchpoint – making participation so effortless it feels natural.

Top tips for success:

Keep thresholds attainable. If your entry tier requires too much spend or effort, you’ll lose momentum before you even begin. Quick wins drive early engagement and early engagement drives habit.
Respect your buying cycle. If you operate in a low-frequency category (think accommodation, automotive, or furniture), don’t try to force unnatural engagement. In these categories, the goal shouldn’t be to make customers buy more often; that’s a very difficult behaviour change to influence. The goal should be to ensure they choose you when they’re in the market again.
Reduce friction, don’t inflate benefits. When participation drops, many brands default to adding more rewards. But often, the problem isn’t incentive, it’s effort. Simplify. Make earning and redeeming a seamless part of the experience. The easier it is, the faster it becomes habitual and engagement is sustained into the long term.

Common pitfalls to avoid:

Multi-step sign-up processes. Requiring customers to pick up a card in-store and then complete registration online is a surefire way to lose them. Each extra step creates drop-off and massive attrition.
Difficulty linking at checkout. Don’t limit how customers can connect their accounts. Allow multiple identifiers such as mobile number, email or digital cards in their wallet, so they can link in whatever way feels most natural and accessible. When customers miss out on points or benefits even once or twice, they often disengage from the program for good.
Failure to integrate systems. Having separate user logins or standalone loyalty program steps creates friction and confusion. Customers shouldn’t have to remember multiple accounts or manually connect their purchases to their rewards. The smarter and more seamless the integration, the higher the engagement and the stronger the program’s ROI.

3. Prompt: remind, remind, remind (and tell them why to care)

Even motivated and capable customers need a nudge. The aim should be to prompt at each relevant engagement moment at the very least, every single time they check out.

Customers want and expect to be reminded about the loyalty program. Without these consistent nudges, they interpret the absence of communication as a signal that the program isn’t important to the brand and therefore, shouldn’t be important to them either.

Your sales assistants failing to ask for a customer’s loyalty ID at checkout means lost benefit accumulation, frustration and disengagement. It happens fast and can occur after just one or two missed transactions.

Design meaningful nudges. The best prompts don’t just remind, they reignite. “You’re close to your next reward” fuels momentum. Every message should inspire and remind the customer why the program matters, what the benefits are, and why they should continue to care.

The takeaway

If you’re building a loyalty program and focusing on success through sign-ups alone, you’re tracking the wrong metric. Driving ROI through loyalty programs isn’t about enrolment, it’s about ongoing engagement.

The question to ask isn’t “How many people joined?” but rather: