The following blog references the recent Forrester report, titled “Use Personalization to Activate Loyalty Program Value”. To access the full report, go here.
Loyalty programs have long been a key strategy for businesses aiming to retain customers and encourage repeat engagement. Customers who participate in these programs tend to stay loyal longer and make more frequent purchases. However, with just about every brand running some sort of loyalty program, it’s becoming increasingly important for businesses to differentiate their programs to stand out.
One way brands set their loyalty programs apart is through personalization. In fact, 54% of US online adults say that receiving personalized offers or exclusive deals is a key factor in their decision to join loyalty programs.1
Types of loyalty program personalization
Personalization in loyalty programs can take a few different forms, and is broken down by the type of value the loyalty member receives:
Economic value
Loyalty programs often focus on financial incentives. By personalizing offers based on a customer’s spending habits or preferences, businesses make the financial benefits of the program more relevant. Targeting discounts or rewards that align with an individual’s budget can attract cost-conscious customers, particularly during uncertain economic times.
Functional value
Customers appreciate recommendations that reduce decision-making fatigue. Personalizing suggestions based on past behavior or preferences allows businesses to streamline the shopping experience. Tailored product recommendations or rewards encourage impulse buys and motivate customers to engage with the program more frequently.
Experimental value
Personalizing online and in-store experiences makes loyalty programs more seamless and integrated. Customizing digital interfaces, such as personalized dashboards or tailored navigation, helps customers easily track rewards and find offers that resonate with them. This type of personalization fosters a stronger connection between customers and brands, encouraging continued engagement with the program.
Symbolic value
Customers want to feel acknowledged and valued. Personalizing status or offering exclusive rewards signals recognition of loyalty in a meaningful way. Creating symbolic gestures, such as tiered membership levels or surprise bonuses, helps strengthen the emotional connection between the customer and the brand. Authenticity in these gestures is essential to making customers feel genuinely appreciated.
Continue reading
Want to continue reading? Access the Forrester report to learn best practices for building effective, personalized loyalty programs. In the report, you will find information on:
- Personalized Reward Structures – Tailoring rewards based on customer behavior, preferences, and past interactions increases perceived value.
- Data-Driven Segmentation – Leveraging zero- and first-party data to create dynamic customer segments that improve engagement.
- Real-Time & Contextual Offers – Using AI to deliver timely and relevant rewards that encourage repeat purchases and advocacy.
- Loyalty as a Customer Experience Strategy – Integrating loyalty programs with the entire CX ecosystem, not just transactional touchpoints.
- Behavioral and Emotional Triggers – Moving beyond transactional incentives by incorporating experiential rewards, gamification, and social proof.
1: Source: Forrester, Use Personalization To Activate Loyalty Program Value, Jessica Liu, Cole Walsh, Mary Pilecki with Emily Collins, Anna Hoskins, Christine Turley, 25 September 2024.
