Leigh Caldwell
The past five years have been seismic for all consumer industries. The pandemic, followed by an economic downturn, has challenged the traditional idea of brand loyalty. According to a McKinsey report last year, loyalty is fading across all demographics. To help brands adapt, we’ve created a new guide, The Psychology of the Loyalty Scheme, offering insights into how loyalty can still be built in a shifting market.
Supply chain disruptions during the pandemic forced product switching, and the subsequent cost-of-living crisis has created an environment where consumers are more willing to try alternatives. This trend spans markets, regions, and demographics, but is especially pronounced where the middle class is being squeezed. In these areas, a cultural narrative of frugality is overtaking previous considerations like sustainability, which had been gaining ground before 2020.
In our conversations with brands, we see a clear shift: budgets are being funnelled toward loyalty and customer experience initiatives. Loyalty program members can drive more than three times the revenue of non-members, but in today’s economy, loyalty is harder to earn. Our own proprietary research shows that seven psychological motivators make loyalty programs work—and only one is based on material rewards like discounts. The others, more powerful and cost-effective, tap into deeper psychological needs.
Download The Psychology of the Loyalty Scheme to ensure your loyalty strategies deliver maximum revenue with minimum investment.
