The Loyalty Lie

Why Most Programs Fail—and What Actually Drives Repeat Purchase

Forget points and perks. If your brand vanished tomorrow, would your customers even notice?

A few months ago, I sat in a brand strategy meeting for a well-known retail brand. Sales were soft, repeat purchase was dropping, and customer churn was up.

The solution from the team?

A new tiered loyalty program with points, exclusive discounts, and early access to sales.

I asked one simple question:

“Would you feel loyal to a brand because they gave you 200 points?”

The room went silent.

We’ve been sold a lie in marketing: that “loyalty” can be bought.

But true loyalty isn’t transactional—it’s emotional. And that’s exactly why most loyalty programs don’t work.

Loyalty Isn’t a Program. It’s a Feeling.

Let’s bust the myth right away.

Loyalty programs are wildly overestimated in their ability to create loyal customers. According to the 2023 Bond Loyalty Report, while 78% of consumers are enrolled in at least one loyalty program, only 22% say these programs are a key reason they stick with a brand.

Translation?

Customers don’t stay because of the program. They stay in spite of it.

Worse, most programs are indistinguishable from each other. Points, perks, VIP tiers, birthday discounts. These are features, not feelings.

The truth is, people don’t become loyal to a brand for what it gives them. They become loyal for how it makes them feel.

Loyalty is about identity. Not incentives.

Why Loyalty Is Really About Identity

Think about the brands you’re truly loyal to. The ones you talk about unprompted. The ones you’d defend to your friends.

Chances are, it’s not because of a punch card.

It’s because those brands help you express something true about yourself. Your values. Your aspirations. Your sense of style. Your humor.

They affirm your identity.

A 2020 Harvard Business Review study confirmed this: when brands reinforce customers’ self-image, they build deeper, longer-lasting loyalty. Identity-driven loyalty correlates with higher spend, stronger word-of-mouth, and lower churn.

So why are so many marketers still obsessed with points?

Because it’s easy to measure.

But here’s the truth: what’s measurable isn’t always meaningful.

Let’s look at some brands doing this the right way.