Points, discounts and cashbacks still form the bedrock of many loyalty schemes today and are often cited as preferred rewards by members. We know this, it’s an industry norm. However, a staggering 82% of customers say they will spend more with brands that make them feel appreciated.¹

The language here is interesting, indicating a shift from the rational to the emotional. Functional transactions and rewards may be real but how do they make customers feel?

Over three quarters of loyalty programmes based on transactional behaviours alone fail within two years, according to Capgemini research.² It is easy to defect to competitors offering similar or better ‘cash equivalents’ if the exchange is a perfunctory one, lacking in depth, meaning or true reciprocity. Such exchanges are the equivalent of dates that never turned into a real relationship.

Most customers are looking for more. In fact, ‘70% expect a two-way relationship with… emotional factors driving brand loyalty’ and ‘60% of consumers use emotional language such as ‘love’, ‘happy’ or ‘adore’, according to Deloitte.³ Successful schemes go beyond the functional, creating relationships, experiences and emotional connections which drive brand bonding and long-lasting loyalty.

Balancing the benefits - hard rewards and fuzzy feelings

This is not to say that loyalty programmes should be built entirely around emotion – there’s a balance and the classic bedrock of points or their equivalent, layered and interspersed with events and experiences which create the ‘feelgood’ factor is often optimal.

Starbucks and others do this successfully with gamification, premium brands achieve it with exclusivity (think VIP previews and elite access) while others deploy a raft of initiatives from random acts of kindness though to celebrating customer milestones and awarding special perks above and beyond the core programme. Even airline loyalty schemes’ tiers hit the mark emotionally, creating visible ‘status’ hierarchies both within the scheme and vs. non-members. Bragging rights and feelings of privilege are afforded by tiers and this recognition is arguably just as important as the functional benefits conferred upon the loyal frequent flyer.

While customers and members may declare a preference for ‘cash equivalent’ rewards, it’s worth remembering a giant stat from Professor Emeritus Gerald Zaltman of Harvard Business School: ‘95% of our purchase decision-making takes place in the sub-conscious mind’.⁴

As neuromarketing expert Douglas Van Praet sets out: ‘We don’t even think our way to logical solutions. We feel our way to reason. Our emotions are the substrate, the base layer of neural circuitry underpinning even rational deliberation. Emotions don't hinder decisions. They constitute the foundations on which they're made!’⁵

Psychology by design: engineering emotional loyalty

With psychology becoming an increasingly important aspect of loyalty programmes, our 2025 Loyalty Landscape research probed several aspects of emotional loyalty for the first time.⁶

Our report revealed that operators are starting to structure schemes with psychological intent in mind. Across the UK, social proof (47%) and reciprocity (45%) are the most widely embedded behavioural principles in loyalty design. Scarcity (41%) and loss aversion (30%) are also used. European loyalty programmes integrate social proof and reciprocity, just like the UK, but to an even greater extent. This reflects a more deliberate approach to emotional engagement: European programmes increasingly aim to make loyalty felt, not just rewarded.⁶

What’s more, UK brands are actively experimenting with behavioural levers to strengthen engagement, with random acts of value or surprises (29%) emerging as the most effective approach.⁶

Only 10% of UK brands report not having tested behavioural mechanics, underscoring that most are moving beyond transactional design toward more motivational engagement strategies that build lasting customer attachment. Behavioural experiments are widely embraced across Europe, with social or peer-driven incentives (39%) identified as the most effective way to enhance programme performance. It’s clear that schemes in both the UK and Europe are increasingly grounded in behavioural science and engagement psychology.⁶

Emotional loyalty is embedded in UK programmes, though not always by deliberate design. While 24% of brands intentionally design for it, a larger 45% aim to balance emotional and rational drivers equally. Another 28% see emotional loyalty as an outcome rather than a design principle, suggesting untapped potential for brands to build more intentional emotional frameworks.⁶

When asked how emotional loyalty is viewed within their UK organisations, 49% say it’s given equal weight to rational loyalty and 34% actively invest in it. Psychology in loyalty is increasingly recognised and yet still presents an opportunity for differentiation and competitive edge.⁶

Conclusion

Customers are seeking reciprocal relationships rather than a series of functional transactions and emotion plays a huge part in decision-making. Programme members want to feel appreciated, valued, recognised and rewarded in return for their loyalty. Brands leading in this space will design intentionally for emotional connection, building deeper relationships and lasting loyalty in the relentless battle for hearts and minds.

References

¹ Forrester’s Customer Experience Benchmark Survey, 2024
² Capgemini’s Fixing the Cracks in Customer Loyalty
³ Deloitte’s Exploring the Value of Emotion Drive Engagement Study
⁴ How Customers Think: Essential Insights into the Mind of the Market, Harvard Business School Professor Emeritus Gerald Zaltman
⁵ Unconscious Branding, Douglas Van Praet
⁶ Collinson’s Loyalty Landscape research 2025