Current loyalty approaches are broken. Brands spend billions on loyalty programs but fail to increase customer engagement.

Our previous research showed that 90% of consumers have a negative perception of loyalty programs. In addition, over half (54%) of loyalty memberships have fallen inactive and over a quarter of consumers (28%) abandon loyalty programs without redeeming any points.

Many of today’s loyalty programs attempt to buy consumer loyalty through monetary rewards. Customers might receive discounts or vouchers, and, in return, organisations expect them to spend more or give up their data. Many organisations run these sorts of programs and achieve what looks like loyalty, at least on the surface.

What does it really mean to be loyal today, though?

To uncover the true drivers of loyalty, we conducted some global, industry-wide research. We broadened our perspective—exploring beyond the mechanical and rational drivers associated with conventional loyalty programs.

We explored loyalty from an emotional perspective to identify the drivers that brands can harness to build meaningful loyalty with consumers.

We surveyed over 9,000 consumers and 500 executives, and we spoke to leading academics in the field. We found that emotions play a far greater role in creating true loyalty than current approaches recognise.

In this report we:

  1. Explore how emotions are the main driver of loyalty
  2. Understand who emotionally engaged consumers are and what motivates them
  3. Assess the size of the prize for organisations with emotionally engaged consumers
  4. Recommend strategies for how organisations can make better emotional connections with consumers.

Let’s delve a little deeper in each of the four sections.

  1. Emotions are the main driver of loyalty

One key reason for consumers abandoning loyalty programs without redeeming points, and businesses having large, inactive customer bases is that many of today’s loyalty programs attempt to buy consumer loyalty through monetary rewards only.

Our research reveals that emotions have the strongest correlation to loyalty over rational factors and brand values. Specifically, honesty and trust were noted as having the greatest influence on loyalty.

However, there does need to be a balancing act with rational benefits. Consumers with high emotional engagement still believe rational factors and brand values are important when they decide on which companies they will bestow their loyalty.

Creating an emotional connection with consumers drives multiple benefits for retailers.

The report found that 82% of consumers with high emotional engagement would always buy the brand they are loyal to when making purchasing decisions (compared to 38% of consumers with low emotional engagement).

In addition, 81% of emotionally connected consumers will not only promote the brand among their family and friends, but they will also spend more too. The report found that 70% of consumers with a high emotional engagement spend up to twice as much with those brands.

  1. Understand who emotionally engaged consumers are and what motivates them

From our research, we identified a subset of consumers with high emotional engagement – as well as a subset of consumers with low emotional engagement – to assess differences between the two groups.

By understanding who emotionally engaged consumers are—and what they need—brands can better tailor their experiences. Our research shows that emotionally engaged consumers:

  • Expect two-way interaction
  • Have higher expectations for brands
  • Seek real-time and varied interaction opportunities
  • Want differentiated shopping experiences
  • Associate specific emotions with brand interactions.
  1. Assess the size of the prize for organizations with emotionally engaged consumers

Seventy percent of emotionally engaged consumers say they spend up to two times or more on brands they are loyal to. In contrast, slightly less than half (49%) of consumers with low emotional engagement say the same.

This data suggests that cultivating emotional connections with consumers could result in a significant lift in basket or transaction size.

Moreover, eight in ten emotionally engaged consumers enjoy giving back to a brand as much as they enjoy receiving from it. This is compared to only 37% of consumers with low emotional engagement.

Just as in human relationships, when consumers become emotionally connected with a brand, their desire to give back is triggered, and the emotionally engaged are twice as likely to give back to the brand.

  1. Recommend strategies for how organisations can make better emotional connections with consumers

Retailers need to change the way they build relationships with consumers, so they are focused on building engagement and mutual trust, rather than being transaction focused.

The report sets out four key components (‘the 4 Rs’) to driving ‘human loyalty’ that retailers should follow to create strong positive emotions, and therefore deeper engagement and loyalty with their consumers:

As competition continues to increase and choice proliferates, brands need to ensure they know their consumers at a more “human level” in order to foster lasting connections. They need to create a contextual view of the consumer and their journeys with their brand to understand their evolving needs and desires.

Brands must then design and execute compelling and engaging experiences that matter, where loyalty is the strategic outcome.

Doing this will help brands to shift a significant portion of their consumer base from having a transactional relationship to one where meaningful experiences ultimately drive emotional engagement and secure sustainable long-term loyalty.

Discover our Loyalty Deciphered report and infographic  to find out how leading brands form strong emotional bonds with consumers.