Loyalty is big business, with global market size forecast to be USD 17.38 billion¹ in 2026. Few brands need convincing of its value, since 74% of consumers adapt their spending habits to maximise loyalty programme benefits.²

However, for a brand just embarking on the loyalty journey or looking to significantly evolve an existing loyalty offer, building the business case can seem daunting. How can stakeholders be persuaded to invest in an embryonic concept and convinced of the potential ROI, in order to secure senior sponsorship and significant investment?

At Collinson, we consult on and design programmes globally, ensuring they are well-conceived from the off and constructed to engender lasting loyalty. Our advisory experts know the potential and the pitfalls, with decades of combined experience brought to each and every loyalty challenge. Here, we share some of the components which make for a compelling business case aimed at securing stakeholder support.

Metrics matter – proving profitability

As with all business plans, the metrics matter. This means setting out with ultra clear, quantified and measurable programme objectives which can be monitored ongoing.

Consider the loyalty programme dashboard and design it to truly measure programme performance. Beyond sign-ups, activation levels, retention rates, revenue per customer, purchase frequency, redemption rates, lifetime value and a whole lot more, determine how the business will answer this question: How will the programme demonstrably drive value over and above what we ordinarily enjoy?

Think statistically robust control groups within the programme and other measures to prove the incremental profit forecast. Explore our Value Vault to find out more.

Programme design – key considerations

Many loyalty schemes are set up and operated as cost centres but optimal schemes are actually set up with their own P&L and conceived as profit centres.

This is about designing optimal schemes which will deliver positive returns ongoing. Programme design should consider how investment generates sustainable bottom line value to the business. Our own Loyalty Landscape research indicates that all but the most nascent schemes generate additional revenue, so long periods without payback are not the norm.³

Key considerations here are rewards and cost to serve. How can the business generate rewards which are high perceived value vs. their cost? This can often be achieved by leveraging unique brand assets in combination with partnership rewards. Avoid creating a reward structure which is too rich and then needs to be devalued, de-motivating members as happened with several large schemes in the UK last year. And equally, avoid a reward structure which is affordable but lacks appeal. Build in instant gratification at lower redemption levels to drive initial activation. The value exchange needs to be reciprocally rewarding for both the operator and member and sustainable over time. Orchestrating this finely balanced ‘value exchange’ is a core part of our advisory work as is controlling cost-to-serve from the outset.

Clearly, seamless omnichannel schemes are now the norm as are programmes which utilise data analytics and the latest AI developments to serve personalised and therefore highly relevant offers to the membership base. Data, technical functionality, reward structure, multi-channel interaction and easy redemption are all facets of scheme design worthy of serious consideration.

Senior stakeholders – achieving buy-in

Loyalty really isn’t the domain of just one department and a programme’s sustained survival is often best assured by the support of several senior sponsors in the business. The CMO is certainly key but so is the CTO in an era where technology is central to success. And don’t forget the CFO who should have financial oversight but is often circumvented. (Our research reveals that the finance department oversees financial management for loyalty in only 27% of companies)!³ Essentially, loyalty is a whole company endeavour with C-suite stakeholders key to its success and securing their support when setting up a scheme is crucial.

It’s worth ensuring that the entire leadership team, including these key stakeholders, buys into the business case for the proposed loyalty programme. Providing clear metrics including the all-important incremental profit forecast is crucial to securing support and investment. So too is demonstrating intelligent programme design with a ‘value exchange’ that the brand can sustain over time while building deep, enduring engagement among members.

Differentiation – who dares wins

Loyalty is not just about P&L’s and points! In fact, according to Capgemini, 77% of traditional loyalty programmes fail within their first two years due to over-reliance on basic transactions rather than emotional loyalty.⁴ Developing a programme which engenders true brand loyalty is always our aim, with the loyalty programme sitting at the heart of the brand.

The programme should reflect the brand’s values and its identity as well as leveraging its unique assets. Loyalty and brand, in our view, go hand in hand and when they do, true brand loyalty is the outcome as well as a programme that is clearly differentiated.

Best-in-class schemes offer rewards which go beyond functional redemptions, experiences which make for unforgettable memories and forge emotional connections leading to long-term brand bonding. Think special experiences, unexpected perks and privileges only afforded to members. Recognising this, around one-third of loyalty operators are now designing programmes for emotional connection, using psychological design principles, an opportunity not to be missed.³ Explore our Loyalty Landscape research to find out more.

Differentiation is a key consideration for loyalty design and it’s worth persuading stakeholders of its benefit to the scheme, brand and wider business from the outset.

Loyalty - the wider business wins too

We have observed that loyalty is a company-wide endeavour, requiring the sponsorship of multiple C-suite stakeholders. What we also know is that the loyalty programme works for the wider business too – creating a fruitful symbiosis.

The data generated by loyalty programmes is immense, not only for personalisation within the programme but for deep understanding of the customer base, its preferences and its value. Insight derived from loyalty data can be used right across the business – driving NPD for example and creating whole new customer experiences.

Loyal customers will advocate, providing positive reviews, testimonials and contributing to NPS scores. As a closed user group, they can assist with the disposal of distressed inventory and equally, discreetly test and trial new products and services. The advantages really are too numerous to list but suffice to say, the benefits go well beyond those reflected in the programme P&L.

Conclusion

In conclusion, a well-designed loyalty programme is not only successful at engendering lasting loyalty and producing incremental profit but contributes significantly across the wider business. Paint this ‘big picture’ at the outset so that stakeholders can readily see the case for investment and support the creation of a strategic business asset.

References

¹ Fortune Business Insights, “Loyalty Management Market Size, Share & Forecast 2034”
² Bond Brand Loyalty 2025
³ Collinson Loyalty Landscape research
⁴ Capgemini, “Fixing the Cracks in Customer Loyalty”