Capillary acquires US-based Brierley+Partners    Read more >

Capillary named a Leader in SPARK Matrix™: Customer Loyalty Solutions, Q2 2024 Report     Read more >



Building Brand Loyalty: Ultimate Guide in an age of Hyper-Personalization.

Brand Loyalty as a product presents unique opportunities which make for a ripe Artificial Intelligence (AI) and Machine Learning (ML) functionality.


Aishwarya Raman

4 Min Read

November 03, 2018

Brand Loyalty as a product presents unique opportunities which make for a ripe Artificial Intelligence (AI) and Machine Learning (ML) functionality.


Building brand loyalty is a multidimensional phenomenon. Many businesses and research professionals consider Customer Satisfaction and Brand Loyalty as their primary marketing goal. Bringing in new consumers is a give-in target for any business, the challenge lies in finding innovative ways to retain existing consumers. A truly satisfied consumer presents the brand an opportunity to build a long-term relationship, and in time will aid in yielding long-term profits.


Now, we know what you’re thinking – it is not just about the money a business makes. Loyalty also involves keeping customers happy, adapting to their changing needs, and keeping up with technology and innovation. It is imperative to dive deep into purchase patterns and user behaviour to be able to deliver a wholesome satisfying experience.


With the big sharks already swimming deep in the market, how can marketers make their product stand out, surprise and delight the customers and deliver a return on investment? Simple – Data and the use of Artificial Intelligence (AI). Brand Loyalty programs can be custom developed so that members are engaged and loyalty delivers positive results for their company.


In this article, we will be talking about:


1. The Importance of Building Brand Loyalty
2. Ways to Create an Effective Loyalty Program
3. Hacks to ace your Loyalty Program Management
4. Loyalty programs through Smartphones, and its benefits.
5. Latest trends in Customer Loyalty programs


The Importance of Building Brand Loyalty


Let’s start with the basics.

There will always be competition – never forget that. Selling your product in a market where there is competition is no child’s play. You want your product to stand out, you want it to be consumed by every individual who possibly requires it, and you want to reach out to those who aren’t aware of its existence, yet.  When consumers commit to a brand, always assume they have done their research and that they ‘chose’ you instead of your competitor.


Businesses use creative marketing strategies to build a sense of attachment between the consumers and the brand – in this case, companies build loyalty a.k.a. reward programs, brand ambassadors, trials and free samples. It is important to keep in mind that however lucrative your offers and services may be, you need to at all times keep up with the consumers changing needs and mindset. You may have been able to retain them for say 6 months, but customers are like cats – it only takes something flashy to distract them. So if you fall back on keeping up with the changing trends, technology, and innovation – you will be at the end of the line before you know it!  


Building brand loyalty is a win-win – and it all depends on how you choose to place your product in the market.


Need a few examples to understand why building brand loyalty is imperative? Read on.


Ways to Create an Effective Loyalty Program


77% of customer brand loyalty programs fail in the first two years.  The primary reason is the lack of sync between customer perception and the company objective. 73% of customers feel that the company should be loyal to them and 66% of marketing executives from the company feel that customers should be loyal to them. Only 25% of loyalty programs reward customers for some form of engagement with them. 85% of companies are always in search of ways to reward customers beyond promotions and discounts. Take the case of Amazon Prime. For a yearly subscription, customers can get access to free shipping, exclusive content and more.


Some examples of the brand loyalty programs that have been very successful are :


  • Swarm Perks
  • American Express Plenti
  • REI Co-op
  • TOMS One for One
  • Amazon Prime
  • Virgin Atlantic Flying Club and
  • Sephora Beauty Insider and VIB


Want an in-depth insight into the types and effectiveness of customer and brand loyalty programs? Read on. 


Hacks to Ace your Loyalty Program Management


Loyalty programs are nothing new, but this does not mean that they are going out of fashion anytime soon.  Based on the research conducted by the group Colloquy, there are 2.65 billion brand loyalty program memberships in the U.S. alone. On average, US households are involved in 21.9 loyalty programs, yet only actively participate in 9.5 of them. There are about $48 billion allocated toward loyalty programs each year, in the form of discounts, free rewards or special promotions.  Out of these, only two-thirds of the amount is ever redeemed by customers. That might sound great from a company perspective, but it is indicative of poor loyalty program management and worse, bad customer engagement. A loyalty program that is well designed can boost customer satisfaction and repeat business.


Given below is a comprehensive loyalty checklist developed by a top Ogilvy & Mather strategist, Michael Szego. Do note that there is nothing called a perfect brand loyalty program, even if you follow the below list, to the T.  You need to keep evolving and changing with the market and your customer. In fact, you need to be a few steps ahead of them, in order to make your loyalty program management a success. Here are four things you need to keep in mind while developing an effective brand loyalty program:


Simplicity = Make my life simple, don’t confuse me with too much information

Benevolence = Understand my issue and take my side in finding a resolution

Trust = Doing what’s right, honouring promises and protecting customers privacy

Transparency = Rates and fees are crystal clear and comparisons are available

To read more on the if’s and but’s to creating an effective loyalty program, read on. 


Loyalty Programs through smartphones and its benefits


The use of mobiles has changed the name of the game for loyalty programs; especially when it comes to creating more ROI. Nowadays, brand loyalty amongst customers is on the decline due to intense competition and a plethora of choices. While loyalty programs are a great way to increase brand loyalty, most brands still treat their rewards program as an excuse to get an email address instead of adding value to the customer. But when a business gets their mobile loyalty program right, they get a 13.3 million-user-strong success story like Starbucks.


We’re sure you would have heard the old adage – ‘It’s is easier to get an old customer to come back than to ask a new customer to transact with you’. This is a retention strategy that every marketer worth his salt knows. This high acquisition cost is the primary factor why brands need to build relationships with existing customers and reward them


Here are a few benefits of inclining your loyalty strategy to be mobile-centered:


> Convenience – anytime & anywhere access. Real-time updates on offers and discounts.


> Staying ahead of the competition – having the leverage of being able to communicate via mobile phones, keeps things instant. Say your customer was looking up a product that your competitor sold as well, but your message with the discount reached him on time, and that turned him in your favour.


>  Reduced Operational Costs –  Offers can be changed instantaneously and sent to all users within seconds. The time spent is less and it works out to be economical than paper-based loyalty programs.


Want a detailed write-up + examples on the benefits of mobile brand loyalty programs? Read on. 


Latest trends in customer loyalty programs:



Customer loyalty is changing constantly.  Customers are increasingly demanding to be seen and heard as individuals, with specific needs and requirements.  Using AI in loyalty programs can solve a whole lot of issues and concerns that plague the existing system.


How is AI used in these programs?  


It is the only way to reach out to huge numbers of customers that run into thousands and millions.  It is the best way to capture an individual’s need, intentions or preferences, in real-time. Each individual’s data is captured, thereby putting together a collective database that delivers information which goes far beyond numbers.  Technology like speech recognition, dialogue management, natural language processing etc. are used to create intelligent assistants. These intelligent assistants can interact easily and naturally with human beings and can help them with accessing information and completing tasks.


For example, AI can help power Virtual Assistants who can monitor specific customer behavior and reward them for it.  This in-turn inspires loyalty in customers and all this can be done without the intervention of human beings.


Another good feature of the integration of AI is that it offers security against cyber-crimes, fraud, and theft.  AI systems can also augment employee performances, which frees them from mundane tasks so that they can focus on important areas that maximize customer experience.


Want to know more about the latest trends in AI-powered brand loyalty programs? Read on. 


Have anything you would like to share with us?


Or any questions?


Leave a comment below and we’ll get right back to you ?



People also ask   


1.What are the benefits of personalization in building brand loyalty?

Personalization helps businesses tailor their offerings to individual customer preferences, leading to increased customer satisfaction, repeat purchases, and stronger brand loyalty.


2.How can businesses implement personalized marketing strategies effectively?

Businesses can use customer data and advanced analytics to create targeted marketing campaigns, personalized email content, and customized product recommendations to enhance customer engagement and loyalty.


3.What tools are available for personalizing customer experiences?

Tools like CRM systems, AI-powered marketing platforms, and data analytics software can help businesses personalize customer interactions and drive brand loyalty.


4.Why is personalization important in customer retention strategies?

Personalization makes customers feel valued and understood, which enhances their overall experience and increases their likelihood of staying loyal to the brand.


5.How does personalized marketing impact customer lifetime value?

Personalized marketing increases customer satisfaction and loyalty, leading to higher customer lifetime value through repeat purchases and long-term brand relationships.



Aishwarya Raman

Product Marketing-Content at Capillary Technologies

Aauthor Name

Aishwarya Raman

Product Marketing-Content at Capillary Technologies

Similar Articles

Have an A-level Engagement Model? Think Again.

by Azmeen Ansar

March 14, 2018 | 4 Min Read

In the previous post of our Think Again Series we covered th

Have a best in class Analytics platform? Think Again.

by Azmeen Ansar

March 14, 2018 | 4 Min Read

In the previous post of our Think Again Series we covered th

Think you know your customers up close and personally? Think Again.

by Azmeen Ansar

March 14, 2018 | 4 Min Read

In the previous post of our Think Again Series we covered th

Contact Us

Get the best loyalty &
customer engagement platform out there!
  • Design industry shaping loyalty programs
  • Integrate easily and go live quicker
  • Deliver hyper-personalized consumer experiences
Request A Call
    [shield-notbot-nonce] => 9f260e77c5
    [wp-wpml_current_language] => en