Are emotional loyalty strategies more effective than transactional approaches?

One in three customers in APAC join loyalty programs to build lasting connections.

Retailers may now retire the red signs promoting discounts and point-based rewards. Whilst initially effective, these tactics have saturated the marketplace with similar loyalty programmes, ultimately making consumers more likely to switch brands and undermining long-term loyalty. This shift from transactional to emotional strategies now dominates, focusing on building deeper connections with customers.

According to Euromonitor International’s Voice of the Consumer: Loyalty Survey, over half of Asia Pacific consumers are members of more than one loyalty programme, complicating the redemption and management of accrued rewards.

This trend underscores consumer preferences for maximising benefits across various daily spending categories and the challenge companies face in managing points liability, a potential drain on profitability in transaction-focused loyalty models.

Conversely, a growing trend towards emotional loyalty strategies offers a potential solution, promising enhanced customer retention through deeper and non-monetary connections.