From loyalty to relevance: Why personalised rewards matter more than ever for UK banks

UK consumers may feel loyal to their bank, but that loyalty is increasingly conditional.

New research from Cardlytics, based on a nationally representative survey of 4,000 UK adults, shows that while most customers are not actively planning to switch, many are open to reassessing where they bank when the value is clear.

Two thirds of consumers (65%) say they feel loyal to their main bank, and 60% say they are unlikely to switch in the next 12 months. But that stability should not be mistaken for permanence. More than half (57%) have switched their main bank account at some point as an adult, and many now spread their money across more than one provider.

The result is a banking market where retention is no longer just about keeping customers from leaving altogether. It is about staying relevant in more of their everyday financial decisions.

Trust and service still matter, but they are now the baseline

When asked what keeps them with their current bank, UK consumers are most likely to cite good customer service (40%), brand trust and reputation (35%), and the quality of mobile or online banking (32%).

These are the foundations of a strong banking relationship. They help explain why customers stay put, particularly older generations. For example, Baby Boomers are significantly more likely to say customer service is a key reason they stay with their bank (50%).

But these factors are increasingly expected. They are essential to retention, but on their own they may be less effective at creating real competitive advantage.

Unlock the full Cardlytics Banking Index 2026

The shift from passive loyalty to active relevance is changing how the UK banks. To read the full analysis on how financial value triggers action, the impact of personalised rewards on 18 to 34 year olds, and why loyalty is no longer exclusive, download the complete report below.

Get the full insights to discover:

• The Switching Triggers: The specific financial incentives driving 25% of Gen Z to reconsider their bank.
• The Personalisation Opportunity: How tailored rewards can increase retention by up to 55% for key demographics.
• The Visibility Challenge: Why 22% of customers are unaware of the rewards their banks already offer.
• Multi-banking Trends: Why customers are spreading their finances and how to capture a greater share of wallet.

UK Loyalty Movement Report: Retail

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‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors, analysing spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed - customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our UK Loyalty Movement Report, we dive into customer behavior in the Retail category to better understand engagement over time by analyzing more than £245 billion in consumer spend behavior.*

Retail Category Loyal Customers

On average, 64% of a merchant’s customers are not actually loyal. But the loyal segment has a much higher share of wallet (79%) than a not loyal segment (21%).

Top Customers (top 20% of most frequent transactors) show a strong uptick as loyal vs not loyal customers. But the loyal customer segment shows more than 3x higher share of wallet.

Findings

We looked into purchase data across Retail in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior.

Retail Loyalty Movement

Overall, quarter over quarter, 25% of customers tend to remain in their existing segments while 37.2% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment movement

The Tied segment (part of the Not Loyal group) demonstrates the most volatility — with just 7% remaining stable and 29% moving up and 29% moving down into other segments.

Retail Leaky Bucket

Retail brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most stable segments, with 38% and 42% respectively staying in the same category from one
  quarter to the next. This indicates a strong commitment to brand preference — whether for your brand or a competitor's.
• Customers in the Tied segment exhibit the highest level of movement, with just 7% remaining Tied quarter-over-quarter. These shoppers are the most susceptible to influence and represent a key opportunity for brands aiming to tip the scales in their favour.
• Interestingly, Loyal customers still show a 25% lapsed rate, which is comparable to the Tied segment’s 36% lapsed rate. This suggests that attrition among Loyal customers may not be driven by brand disengagement, but rather by natural gaps in purchase cycles — for example, customers who buy apparel less frequently.

Definitions of Customer Segments
Loyal Customers:

• Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers:

• Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
• Prefer: Lower share of wallet and higher rank than other brands in their consideration set
• Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
• New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When brands neglect current customers, they risk losing them and undoing past investment yet the reasons why a customer might “lapse” is different depending upon their loyalty tier. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase
  frequency.
• Regularly update/refine customer segments and adjust reward offers to keep
  them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

* For this report, we've selected the entire retail category in our data, collectively representing over £245bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.

Airlines: Unpacking the State of Customer Loyalty

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Introduction‍

Previously, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors.* We analyzed billions in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our Loyalty Movement Report, we dive into the Airline category to better understand engagement over time by analyzing more than £40B in consumer spend behavior.

Findings:

We looked into purchase data at all Airlines in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior.

Segment Movement

Of the portion of each customer segment that is non-lapsed, those that are loyal to a specific airline show the strongest brand retention - 31% remain loyal quarter over quarter. In contrast, Tied and Prefer customers demonstrate greater variability in behaviour, with only 4% and 12% respectively maintaining their previous preference.

Loyal customers tend to remain consistent in their airline choice, likely driven by the strength of airline loyalty programmes and exclusive incentives. However, Tied and Prefer customers show clear signs of behaviour fluidity, highlighting a key opportunity for targeted campaigns to drive conversion toward brand loyalty.

Lapsed behaviour is high across all segments—65% of previously loyal customers lapsed, and similar rates are observed among Tied (63%) and Prefer (67%) segments. This reflects typical airline purchasing patterns, where customer loyalty can be disrupted by pricing, availability, or external factors, regardless of prior loyalty classification.

Airlines Leaky Bucket 

Airlines are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle is expected based on typical consumer behavior for airline travel quarter over quarter but reinforces need to nurture existing relationships.

Takeaways:

Airline marketers’ inherent focus on nurturing loyal customers is well-know and consumer spend data show it’s working - Loyal customers tend to stay loyal. But huge opportunity exists with customers who are not loyal to any specific airline and could be lured through greater incentives. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

Apparel: Stop Taking Customer Loyalty for Granted

Introduction

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analyzed $160B in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our Loyalty Movement Report, we dive into customer behavior in the Apparel category to better understand engagement over time by analyzing more than $17B in consumer spend behavior.*

Apparel Category Loyal Customers

On average, 61% of a merchant’s customers are not actually loyal. But the loyal segment has a much higher share of wallet (85%) than a not loyal segment (21%).

Top Customers (top 10% of most frequent transactors) show a +6 point uptick as loyal vs not loyal customers. But the loyal customer segment shows more than 3x higher share of wallet.

Findings

We looked into purchase data at all Apparel brands in the US over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior.

Apparel Loyalty Movement

Overall, quarter over quarter, 41% of customers tend to remain in their existing segments while 16% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments. 

Segment Movement

While all segments show purchase behavior movement, the Tied segment (part of Not Loyal customers) shows the most movement - both up (29%)  and down (29%) - into other segments. 

Apparel Leaky Bucket

Apparel brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• ‍Loyal customers and those that Prefer the competition are the most rigid (with 57% and 58% staying the same, respectively). Those customers that are Tied have the greatest propensity for a behavior change (with only 18% staying the same).
• While the most Loyal customers show a 25% lapsed rate at similar levels as Tied, this is most likely not connected to churn vs connected to cadence of shopping behavior (maybe they don’t buy clothes every that frequently).

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When brands neglect current customers, they risk losing them and undoing past investment yet the reasons why a customer might “lapse” is different depending upon their loyalty tier.  Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

* For this report, we've selected the entire Apparel category in our data, collectively representing $17bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
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About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a commerce media platform, powered by our publishers’ first-party purchase data, that makes commerce smarter and more rewarding for everyone. We offer a range of solutions to help advertisers and publishers, including financial institutions, grow and strengthen customer loyalty. With visibility into approximately half of all card-based transactions in the U.S. and a quarter in the U.K., Cardlytics enables advertisers to engage consumers at scale and drive incremental sales through our industry-leading financial media network. Publisher partners can enhance their platforms with relevant and personalized offers that improve the shopping experience for their customers. Cardlytics also offers identity resolution capabilities through Bridg, which helps convert anonymous shoppers into known and reachable customers. Headquartered in Atlanta, Cardlytics has offices in Menlo Park, Los Angeles, Champaign, New York and London. Learn more at www.cardlytics.com or follow us on LinkedIn.

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Airlines: Unpacking the State of Customer Loyalty

Introduction

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors. We analyzed $160B in spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed—customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our Loyalty Movement Report, we dive into the Airline category to better understand engagement over time by the entire more than $58B in consumer spend behavior.*

Airline Category Loyal Customers

On average, 39% of a merchant’s customers are not loyal. Yet the loyal segment shows extreme loyalty when it comes to share of wallet (95%) where as a not loyal segment does not (28%).

Top Customers (top 10% of most frequent transactors) are heavily loyal - 2/3. And that loyal customer segment shows the same extreme loyalty in terms of share of wallet as all customers.

Findings

We looked into purchase data at all Airlines in the US over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior. 

Airline Loyalty Movement

Overall, quarter over quarter, customers tend to stay in their same segment (36%) while there is an equal amount that increase/decrease loyalty (7%) and are either new or lapsed (22% and 26%, respectively). However, when digging into the individual segments, the opportunity becomes more clear among segments that are categorized as non-loyal. 

Segment Movement

Of the ⅔ of each customer segment that is non-lapsed, those that are loyal to a specific airline tend to stay loyal (57%). However, those categorized as “non-loyal” (Tied/Prefer) show significant willingness to to shop around (43% and 46%, respectively).  

Airline Leaky Bucket

Airlines are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle is expected based on typical consumer behavior for airline travel quarter over quarter but reinforces need to nurture existing relationships .

Diving deeper into the individual segments tells us:

• Loyal customers typically do not switch airlines, which is most likely due to airlines robust loyalty programs and incentives. However, customers that are Tied or Prefer have a high propensity for behavior change and show an opportunity for targeted campaigns to influence their behavior.
• Lapsed customers are similar across all segments, which is reflective of typical airline purchasing behavior - regardless of their loyalty categorization.

Definitions of Customer Segments

‍
Loyal Customers
Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers
Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
‍Prefer: Lower share of wallet and higher rank than other brands in their consideration set
‍Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
‍New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Airline marketers’ inherent focus on nurturing loyal customers is well-know and consumer spend data show it’s working - Loyal customers tend to stay loyal. But huge opportunity exists with customers who are not loyal to any specific airline and could be lured through greater incentives. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase frequency.
• Regularly update/refine customer segments and adjust reward offers to keep them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

* For this report, we've selected the entire Airlines category in our data, collectively representing$58bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.
‍‍

About Cardlytics‍

Cardlytics (NASDAQ: CDLX) is a commerce media platform, powered by our publishers’ first-party purchase data, that makes commerce smarter and more rewarding for everyone. We offer a range of solutions to help advertisers and publishers, including financial institutions, grow and strengthen customer loyalty. With visibility into approximately half of all card-based transactions in the U.S. and a quarter in the U.K., Cardlytics enables advertisers to engage consumers at scale and drive incremental sales through our industry-leading financial media network. Publisher partners can enhance their platforms with relevant and personalized offers that improve the shopping experience for their customers. Cardlytics also offers identity resolution capabilities through Bridg, which helps convert anonymous shoppers into known and reachable customers. Headquartered in Atlanta, Cardlytics has offices in Menlo Park, Los Angeles, Champaign, New York and London. Learn more at www.cardlytics.com or follow us on LinkedIn.

Redefining Customer Loyalty

Introduction

Brands of all sizes know that engaging loyal customers is critical to their business, but how do they know which customers are loyal? Most marketers use first party transaction data to assess how often their customers are shopping or how much they are spending in order to define who their loyal customers are. This approach can lead to an inaccurate view of loyalty because it overlooks whether these customers are spending with competing brands.

Cardlytics has access to $4.7Tn in omni-channel annual card spend, powered by the largest financial institutions in the United States. We have sampled this rich dataset to provide a full-category view of spend that sheds insight on what it really means to be brand-loyal, and how marketers can redefine audiences to make informed, strategic decisions.

Read on to explore the full report (or download it here) and reach out today to get a custom brand-level view of your business’ loyal customers in relation to the category.‍

‍Key Takeaways from the Report

Significant potential exists to grow revenue by boosting customer loyalty and increasing their share of wallet.

• 10% of customers are loyal, spending 62% of their budget with the merchant.
• 90% are not loyal, spending only 9% of their budget with the merchant.
• Brands could benefit from 6.9x customer spend by focusing on the 90% of non-loyal customers

Transaction frequency doesn't equate to loyalty.

• Only 50% of a merchant's top shoppers are loyal.
• 48% of a merchant's top shoppers spend 79% of their budget with competitors.

Customer Loyalty & Share of Wallet

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‍Defining Customer Loyalty

‍Cardlytics defines customer loyalty based on a consumer’s preference for a merchant relative to the competition. In this report, we’ve sampled $160Bn of spend across six large categories to determine what percentage of a merchant’s customers are loyal and how much are those customers spending with the competition as compared to customers that are not loyal.

On average, 10% of a merchant’s customers are loyal (ranging from 5-13% depending on the category). Conversely, 90% of a merchant’s customers are not loyal, on average.

These loyal customers have a share of wallet of 62% (meaning 62% of their category spend is with the merchant). Not loyal customers have a share of wallet of only 9%.

¹ Cardlytics applies the principles of the Wallet Allocation Rule to rank existing customers (that spent during the prior and current periods) based on their share of wallet (which is the percentage of a customer’s total spending in a category that goes to a particular merchant) to assess clear first choice based on the relative rank of that merchant. Full methodology included at the end of this report.

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Top Customer Loyalty & Share of Wallet

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Are Frequent Shoppers Loyal?

‍In the absence of competitive spend data, Marketers leverage transaction frequency to define loyalty (e.g., “the customers who shop the most frequently are my loyal customers”). Cardlytics isolated the top customers (most frequent purchasers), by merchant, to assess whether this is an appropriate proxy for loyalty. For this group of top customers, we analyzed what percentage of them are loyal (have a clear first choice for the merchant) and how much are they spending with the competition.

On average, only 52% of a merchant’s top customers are loyal (with a clear first choice for the brand). In other words, roughly half of a brand’s top (most frequent) customers prefer to shop at competitive brands.

While the top customers that are loyal have a share of wallet of 60%, the remaining top-customers have a share of wallet of only 21%, meaning 79% of their spend goes to competitors.

¹ Cardlytics used a 12 month measurement period for Apparel and Big Box (08/01/23 to 07/31/24) and a 6 month period for all other categories (01/31/24 to 07/31/24) when isolating the top-10% most frequent shoppers. Cardlytics measured the share of wallet ranking for all of these top customers with spend in this period (regardless of whether they were newly acquired by the brand in the period or if they were existing shoppers from the prior period).

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What do these insights mean for you?

Supplementing first party transaction data with category-level spending behavior is essential to understanding and defining which customers are loyal (and which customers are not), thereby enabling more informed marketing strategies that deliver growth.

Reach out to Cardlytics to get a custom brand-level view of your business’ loyal customers in relation to the category. For more information, please submit a request.
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About Cardlytics

Cardlytics is the world's largest bank rewards network, powering offers for more than 20 of the top bank partners globally, including the world’s largest retail brands, representing $4.7T in consumer spend. Cardlytics helps brands determine what loyalty really looks like across their customer base to identify headroom for growth, reach customers deterministically, and drive conversions.

1. Loyal customers are existing customers of a merchant with a clear first choice for that merchant (relative to the category), as evidenced by their share of wallet ranking (note: existing customers are those with spend in the current and prior periods⁴).

2. Includes customers that have spent with a merchant but were either newly acquired or lapsed in the current period⁴, evenly split their category spend between multiple merchants, and/or have a clear preference for competitors.

3. Includes the top-10% of a merchant’s customers based on the number of transactions at the merchant in the trailing 6-12 month period

4. Current period for Apparel and Big Box is 08/01/23 to 07/31/24; current period for all other categories is 01/31/24 to 07/31/24

Explore why driving transaction frequency among existing and high-value customers is essential in the pet category.

New from Cardlytics: Our 1st party transaction data suggests that while less and less consumers are spending in the pet specialty retail category every year, those who remain are increasingly valuable for brands to retain. Download the full insight bulletin today!

Since COVID, the Pet specialty retail category has seen impressive growth in spend every year. However, the rate of growth has significantly declined. The leading driver of this slow down is a decline in the volume of Pet shoppers - shopper volume only grew by 1.17% in 2023. There are less category shoppers overall, and less consumers defined as new pet parents.*

Despite fewer shoppers entering the category, existing pet parents are doting on their pets with non-essential purchases.

Of existing pet parents shopping the category in 2023, 9% were considered “doting pet parents” (+2pts vs. 2022) who make non-essential purchases for their pets (e.g. premium natural food).  This category of shoppers spends 2x more than the average pet parent.

What does this mean for you?

Driving transaction frequency among existing and high-value customers is essential to increasing sales long-term, especially when the category competition is fierce. 

‍Download the full insight bulletin, and let’s chat about how Cardlytics can help drive your pet loyalty efforts. Email hello@cardlytics.com to get started.

Loyal customers are your brand's biggest sales opportunity–spending an average of 67% more than comparable transient consumers.

A new era in consumerism is ushering in highly personalized service models and deep, lasting relationships with a loyal customer base. This shift towards relationship marketing emphasizes building a strong customer loyalty program to facilitate that relationship.

Key Takeaways:

• Personalized experiences create brand affinity and drive loyalty. 
• Strong relationships transcend temporary instabilities such as a recession.
• 52% of consumers choose brands based on loyalty programs

What is relationship marketing?

Relationship marketing is a long-term strategy that creates opportunities to nurture customer relationships. For many brands, repeat customers are willing to spend more and happy to keep coming back.

It's still just one piece of the marketing puzzle, but priorities are shifting. Instead a singular focus on new conversions, a relationship marketing strategy invests in retaining the customers that have already converted.

From a return on investment perspective, it's a logical approach.

A relationship marketing strategy might include:

• Obtaining and Listening to Customer Feedback
• Curating Personalized Experiences
• Enhancing Customer Service Delivery
• Establishing a Rewards Program
• Embracing an Omnichannel Approach

Why relationship marketing is important

Consumers increasingly demand deeper commitments from the brands they shop with. According to Salesforce, 73% of customers now value trust when choosing where to shop. Understanding relationship marketing and customer loyalty can help companies connect with their consumers.

Increased Sales Opportunities

Focusing on customer relationships can increase customer loyalty. This benefits the brand in several ways. First, customer acquisition costs go down while sales numbers likely go up. Loyal customers spend more–and more often.

Second, loyal customers stick around. In one survey, 75% of loyalty customers had been with a brand for over a decade. Imagine the purchasing power of an engaged customer over 10 years.

Generating Brand Awareness

Loyal customers are your strongest advocate. A deep-rooted part of our social human nature hinges on modeling behaviors. We're born with the instinct to mimic, look for examples, and adopt modeled behaviors from those around us. We’re also equally inclined to share or model for those around us. 

For brands, this means that happy, loyal customers are eager to share the good news. And interested prospects are willing to hear it turning loyal customers into a perfectly primed engine for boosting brand awareness.

Long-Term Stability

Strong relationships transcend temporary instabilities. A dip in the economy often leads to consumer pullback on spending. When buying resumes, purchase power is fair game. Brand loyalty is the tie that binds bringing familiar faces back to the brands they trust.

Relationship marketing drives loyalty and retention

If repeat business drives sales growth, the hidden potential in loyalty-driven retention is an opportunity many brands have not yet fully realized. As marketers lean into creating customer experiences and cultivating deeper engagement through emotional connection, both brands and consumers benefit from relationship marketing.

Consumers get a positive, personalized experience ripe with satisfaction. Brands see more sales, a better return on ad spend, and growing loyalty that continues to feed an efficient marketing cycle.

Relationship marketing strategies to increase customer loyalty

The key to increasing customer loyalty is in your approach to managing that relationship. Let's look at effective ways to make the most of your relationship marketing strategy.

Customer feedback

Obtaining customer feedback through surveys and using that data to inform business decisions like product development, marketing strategies, customer service models, and supplemental services provides a brand with the best chance of finding and fulfilling customer needs. 

On top of providing genuine solutions, customers feel satisfied when their needs are heard and addressed. Engaging a 360-degree customer feedback model grows brand affinity through deep satisfaction creating loyal customer relationships.

Personalized experiences

Nobody likes to feel like another face in a crowd. We're wired to belong but driven to stand out. As consumers, we want the accessibility of commercial products delivered with personalized service. 

Brands can use intel generated from quality first-party data streams to personalize customer experiences. Doing so creates a sense of familiarity that breeds trust while simultaneously addressing the ego and connecting with customers emotionally to build loyalty.

Great customer service

It sounds simple – deliver great service and win customer loyalty. The problem is that priorities shift, and balls get dropped. While most brands would like to believe they're providing great customer service, reality paints a different picture.

The majority of consumers base purchasing decisions on the level of service they receive. This means providing attentive service from knowledgeable, trained staff. This can increase customer loyalty better than offering a lower price.

Rewards programs

Consumers love incentives. Over half (52%) of consumers say that loyalty programs influence their decisions to shop with a particular brand¹.

A rewards program is a specific type of loyalty program. Rewards increase the perceived value from the customers' point of view, providing a strong anchor for maintaining loyal customers. It's a simple concept, reward your most loyal shoppers for every dollar spent with your brand, and they'll spend more. 

First-party data from Cardlytics can help brands identify loyal customers and customers at risk of leaving based on the share of spend in competitive categories. This data can then help brands personalize rewards based on unique customer relationships. 

Omnichannel approach

An omnichannel approach recognizes that customers engage in a variety of ways. The same consumers who shop in stores will also interact with the brand on social channels. Similarly, shoppers that gravitate toward in-app purchases might also be eager to leave reviews on aggregate sites.

Customers aren't siloed to independent channels, and your marketing strategy shouldn't be either. An omnichannel approach builds trust and loyalty by providing a cohesive brand experience across all touchpoints.

With an omnichannel approach fueled by Cardlytic's first-party data, brands can easily identify new or lapsed customers so that you can deliver personalized re-engagement offers through uniquely personalized messaging and offers.

How Cardlytics Helps Brands Grow Customer Loyalty With Strong Relationship Marketing

The untapped potential in your loyal customer base can be reached through effective relationship marketing. Cardlytics solutions can support a stronger loyalty program by providing unique insights on customer behavior, including the share of wallet spend across competitive brands. Your brand can use this information to provide personalized offers to engage and re-engage customers every step of the way.

Sources:

¹“Shopper Story 2020: The New Consumer Mindset,” Criteo, 2020

Customer loyalty programs are a massive catalyst for building brand loyalty and increasing customer spend.  The question becomes how to construct an effective loyalty program. Should you compare cash back rewards vs brand rewards (like points or miles), or even cash back vs financing options?

Answering these questions  will have a great impact on customer retention and spending rates and impact the robustness and accuracy of your customer data. 

With top search engine providers like Google making the conscious choice to phase out cookies for third-party data collection by 2024, customer loyalty programs are an essential tactic to capture first party consumer data now and into the near future. So what's the strategy moving forward? How does your business optimize its loyalty program to keep customers satisfied without sacrificing access to information?

Key takeaways:

• Consumers prefer the instant gratification of cash back rewards over delayed rewards like miles or points.
• It's easier for brands to personalize messaging using loyalty programs to gather first party consumer data.
• Brands can enhance their targeting without third-party cookies.
• Starting in mid-2024, Google is phasing out support for third-party cookies, with plans to finish the phase-out by late 2024.

Instant gratification: why cash back is king

When evaluating cash back rewards vs delayed rewards, marketing and trends studies ultimately lean toward using cash back strategies for many reasons — the main one being the psychological "instant" gratification obtained from the transaction. Consumers immediately see that money going right back in their pocket when they make a purchase associated with a cash-back rewards program.

That's the opposite effect to other traditional programs such as points or miles, which require a significant amount of time before the benefits can be reaped — delaying the consumer gratification. 

Cash back is also generally easier to manage, understand, and earn from the consumer’s point of view compared to other programs — you spend money, you make money. In fact, 54% of loyalty program memberships are inactive. The number one reason being that it takes too long to earn points or miles for rewards.

The rising importance of loyalty data

Implementing the right elements of a customer loyalty program isn't just critical for revenue purposes but also for the advanced insights acquired through the data collected. Using an enticing loyalty system means you can ensure meaningful performance and behavioral insights are brought in and analyzed, to uncover the most engaged and valuable customers.

This powerful source of first party customer data lets you improve your personalized messaging toward your customers and makes it easy to design individualized promotional offers based on a buyer's behavior and previous purchases. 

There's even the added benefit of improved campaign measurements over time to see which content, deals, and messaging works best for its respective audience compared to others. Collecting this necessary loyalty data provides a better customer experience and a strengthened relationship between consumers and the brands they shop with.

Expand the power of loyalty data with Cardlytics

Brands can strongly enhance their market targeting through Cardlytics’ Purchase Intelligence™ and digital ad platform. Cardlytics, for instance, partners  with financial institutions, such as banks,  and leverages their online, mobile, and email channels to deliver ads based on first party consumer spending insights. 

In conjunction with data collected from loyalty programs, Cardlytics becomes a powerful tool to evaluate where your customers are shopping, when they are shopping, how much they’re spending, if they are brand-loyal, and if there are potential competitive market disruptors in your space. This information can then be used to develop purchase insights and make more informed business decisions.

Give cash back, get loyalty data

Loyalty programs increase customer spending, brand loyalty, and ultimately the total customer relationship value. Additionally, they offer premium data collection capabilities. That said, it's important to create a loyalty program that your customers will love and actually participate in.   

Therefore, you’ll need to diligently compare program structures such as cash back rewards vs points or miles and roll out the right rewards system. While traditional loyalty programs such as points or miles may have worked in the past, consumer behavior now shows that instant gratification in the form of cash back is more popular than ever before, as well as one of the easiest ways for the customer to manage and earn their rewards.  

By utilizing an effective rewards program with a first party data solution like Cardlytics, you can take data utilization to the next level. The platform's collection and analysis process brings data from critical customer channels to improve marketing strategies for your target audiences. Want to learn more about improving your targeting with advanced consumer insights? Contact us today to speak with an expert and learn how to take your data to the next level.