Discounts Are No Longer Enough to Maintain Customer Loyalty

Customer Loyalty Is Declining – But Not Lost

Customer loyalty has significantly weakened over the past five years. In an environment of rising prices and high price sensitivity, competing solely on the size of discounts is no longer sufficient. Short-term promotions may bring conversions but rarely lead to a long-term relationship with the brand. Research shows that the key to loyalty today is not the transaction but the relationship – built on trust, emotional intelligence, and consistent brand experience. These three factors form the core of a modern strategy that aims to build loyalty not through rewards, but through value.

Trust Is Not a Bonus

Up to 88% of consumers consider lack of trust as a reason why they don’t purchase a product or service from a brand. However, building trust cannot be done through advertising alone – customers expect specific actions. Today, they closely monitor how brands handle personal data, who they collaborate with, and what advertising formats they use.

It turns out that the form of communication has a significant impact on credibility. Video scores highest, trusted by more than 60% of consumers. This places it ahead of banners, sponsored content, and targeted campaigns.

For brands, this means one thing: if they want to not only gain but also maintain trust, they must be transparent, consistent, and approach customer privacy with respect.

Emotions Drive Growth

Emotional connection with a brand creates higher value than the product’s functionality itself. In the survey, customers identified emotions as the source of up to 43% of value, while “product use” itself accounted for only 20%.

Source: eMarketer & Bloomreach

Brands that can respond empathetically, personalise communication, and create positive moments build memory-strong relationships. A simple gesture – such as when a cashier at Trader Joe’s gifted a tired new father with chocolate and flowers – often has a greater impact than any loyalty card.

People don’t remember discounts – they remember experiences. And this is where emotional intelligence comes into play.

Personalisation Is Essential

Three-quarters of marketers actively use personalisation in loyalty programmes, and almost 90% of younger customers explicitly expect it when shopping online. However, the key to effectiveness is not just that you personalise, but how you do it.

Successful brands work with recommendations based on the customer’s actual behaviour, not just assumptions. They communicate through channels the customer prefers and at times when they are ready for interaction. At the same time, they create content that takes into account their values, interests, and purchase history. The result is a connection that builds a real relationship – not just repeated transactions.

Customer Loyalty Is Also Built After Purchase

The customer journey doesn’t end with the purchase – on the contrary, the post-payment phase has a decisive influence on whether the customer returns. Key factors that support loyalty are accessible customer support, free shipping, and motivating discounts on the next purchase.

Today, meeting basic expectations is no longer enough. Reliable delivery, clear communication, and easy returns are the minimum that customers require. However, it is their quality that often determines whether a brand stands out from the competition. If these services are complemented by thoughtful personalised elements – such as an email upon reaching a higher level of the loyalty programme or a personalised SMS with a discount – it creates a solid foundation for customer return and building a long-term relationship.

Loyalty Versus Price: The Dilemma of 2025

In times of economic uncertainty, loyalty becomes a luxury. Nearly half of consumers are switching to cheaper brands. Brands thus find themselves in a dilemma: lower prices and jeopardise their value, or risk losing the customer?

The solution? Invest in trust and emotions. Amazon, Apple, or Nike don’t have a problem with loyalty – not because they’re the cheapest, but because they consistently deliver quality and a consistent experience.

Brands that want to succeed in building loyalty must build on trust and emotional value as a strategic foundation for their growth. Personalisation should no longer be considered an add-on feature but as a key pillar of the customer experience. And finally – focusing only on the purchase funnel is not enough. True loyalty emerges only when a brand works with the entire customer lifecycle, including the post-purchase phase, where the decision about repeat choice is made.