Do Loyalty Programmes Still Work in 2026?
TL;DR: Loyalty programmes still work — but only when they create genuine attachment or useful data, not when they simply hand discounts to customers who would have bought anyway. In a world where everyone has a points scheme, differentiation and real value are what separate the schemes that pay off.
The paradox of the points card
Loyalty programmes are now so universal they've become table stakes rather than a differentiator. When every competitor offers points, a programme stops being a reason to choose you and becomes a cost of doing business.
Worse, many schemes mainly reward behaviour that would have happened anyway — subsidising your most loyal customers with discounts they didn't need, while doing little to change the behaviour of everyone else.
What makes a programme actually work
The effective ones do one of two things well. Either they create genuine emotional attachment — status, recognition, a sense of belonging that money alone doesn't buy — or they generate first-party data valuable enough to justify the rewards you give away.
The best combine both: a supermarket scheme that funds personalised offers and a retail-media business, or a brand community where the perk is access and identity, not just money off. Discount-only schemes are the weakest, because they compete purely on price — a race no one wins.
Before you launch (or keep) one
Ask what behaviour you're actually trying to change: more frequent visits, bigger baskets, lapsed customers returning, or richer data. A programme with no behavioural goal is just a margin giveaway with an app.
Then measure incrementality, not enrolment. Sign-ups feel like success but prove nothing; the only number that matters is whether members behave more profitably than they would have without the scheme.
The Marketing Minute read
Loyalty isn't dead, but the lazy version is. A points card bolted on to compete with rivals usually just erodes margin while customers collect from everyone, loyal to none.
If you run or plan a programme, make it earn its keep: tie it to a behaviour worth changing, build in recognition or data value beyond the discount, and judge it on incremental profit. Otherwise you're paying people to do what they'd do for free.
Quick FAQ
Do loyalty programmes still work?
Yes, but only when they build genuine attachment or generate valuable first-party data. Discount-only schemes that reward behaviour customers would repeat anyway tend to erode margin without building real loyalty.
How do you measure a loyalty programme's success?
By incrementality — whether members behave more profitably than they would have without the scheme — not by enrolment numbers, which feel like success but prove nothing.
When every rival has a points card, a loyalty programme stops being a reason to choose you and becomes a cost of doing business. The lazy version just pays loyal customers a discount they didn't need. Make it earn its keep — attachment or data — or you're funding behaviour you'd have got for free. — Daniel Nikolla, Founder of Merx Marketing
A loyalty scheme only works when it changes behaviour or generates valuable data — judge it on incremental profit, not sign-ups, or it's just a discount with an app.
Does your loyalty programme change what customers do — or just reward what they'd have done anyway?
If you would like to know more about this topic, please contact us on danieln@merxmarketing.co.uk
Sources: Marketing Minute analysis.
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Written by Daniel Nikolla, Founder of Merx Marketing Ltd and Marketing Minute
