How to Create a Loyalty Campaign That Works: From Motivation to Emotional Engagement

Loyalty programs are considered one of the most crucial tools for retaining customers and increasing sales. Businesses invest significant resources in developing these programs because customer loyalty holds immense value for retailers.

Supermarkets, pharmacies, online stores, and even restaurants strive to boost customer loyalty, as loyal consumers are more likely to return, make repeat purchases, and provide recommendations. Research shows that the loyalty market in the U.S. has an annual growth rate of 10–11%. As a result, it is predicted that the market size will reach $42 billion by 2028.

In the U.S. and Europe, loyalty programs have long been a standard part of the consumer experience. For instance, 90% of Americans participate in at least one loyalty program. For brands, it’s not just a way to increase sales but also an opportunity to build long-term, trust-based relationships with customers.

Many Europeans also support loyalty programs: 55% consider them an excellent way to reward customers, and 42% believe every brand should have such a program. One in three joins a loyalty program whenever it’s offered.

However, not all programs succeed. Why do some programs keep customers coming back while others remain unnoticed? Daria Bakhmatova , Commercial Director at Art Nation Loyalty, and Iryna Gromova , CMO at Art Nation Loyalty, will discuss the key factors for success and common mistakes companies make.

Key Factors – Network Commitment and Staff Motivation

One of the critical success factors of any loyalty campaign is a deep understanding of its target audience. Campaigns designed with customers’ needs and interests in mind are more likely to engage participants. For example, a campaign aimed at young people will be more effective if it utilizes digital tools and social media.

But that’s not the most important part…

"First and foremost, the success of a campaign depends on the retailer's willingness to run it. This involves all levels, from top management to cashiers. If even one link in this chain fails, the campaign is doomed to fail," notes Daria Bakhmatova. She emphasizes that every participant in the process - from executives to cashiers - must be highly motivated. In a loyalty campaign, each link has its specific goal: top management aims to differentiate the network from competitors, middle managers focus on meeting KPIs, but cashiers play the decisive role in engaging customers.

In many countries, trends are moving towards process automation, minimizing the human factor. However, even in such systems, staff who genuinely interact with customers remain indispensable. "The success of a loyalty campaign depends 99% on cashiers, especially in systems where they are directly involved. If they lack motivation, for instance, due to the absence of competitive elements or financial rewards, the campaign is likely to fail," Bakhmatova notes. Retailers address this issue in various ways, but one thing is clear: if staff are not interested in promoting the campaign, even the best-designed effort will not achieve its goals.

Pricing, timing, and product positioning are also critical factors. For example, running campaigns during periods of low sales, such as January or June-July, may not yield the desired results.

Partnerships and Coalitions: The Key to Effectiveness

Partnerships with suppliers are an essential element for achieving success in loyalty campaigns. "Suppliers gain additional sales and brand recognition, while the retailer gets a successful campaign," explains Daria. She adds that for smaller retailers unable to provide a large stock of goods independently, coalitions can be an excellent solution. By joining forces, multiple networks can conduct large-scale campaigns and reap the benefits.

An example of this was the Goose Pryzolov campaign, one of the project's highlights being the creation of a coalition of 2,500 stores from Ukrainian retail chains. This approach allowed the campaign to scale and reach the widest possible audience.

The Importance of Emotional Connection in Loyalty Programs

An emotional connection with customers is the foundation of a successful loyalty program. A product must not only meet the basic expectations of consumers but also create additional value that goes beyond material benefits. As Art Nation Loyalty’s CMO Iryna Gromova notes, “The value of an offer in the eyes of the consumer must exceed the benefit provided by the product.” This could include emotions derived from supporting charitable initiatives, backing meaningful projects, feeling a sense of belonging to a community, or even simple gestures like personalized wishes on a receipt. These elements foster a strong emotional response because they represent “a very human and personalized form of communication.”

Additionally, a successful loyalty campaign should be supported by a story that resonates with the audience. “A product alone can be found in many places,” Iryna emphasizes. “It’s important to create a concept that aligns with cultural and social contexts and tells a story that interests consumers right now. A campaign should speak the language of its audience, using current trends and events to stand out among competitors.”

In this context, licensed brands are particularly effective as they already have an established emotional connection with their audience. “A brand serves as a marker that people seek to reinforce their identity,” says Iryna. In such collaborations, it’s crucial to choose partners whose values align with those of the retailer, as this helps build a deeper connection with customers. She points out that characters from cartoons and video games hold significant potential, especially among millennials and Gen Z, who maintain their love for childhood heroes and continue to purchase products featuring them, staying true to themselves.

“These brands are excellent options for family promotions and collaborations because they boast a substantial audience of adult fans. The profits from working with this group of fans are what sustain evergreen brands,” concludes Iryna.

Thus, the success of a loyalty program depends on several factors: a deep understanding of customer needs, the right timing for the campaign and rewards, as well as creating an emotional connection or involving licensed brands. It is clear that businesses that invest time and resources in thorough planning and creative solutions can achieve tremendous gains in the form of loyal customers and increased sales.

In today’s era of digitalization and gadgets, the market is evolving rapidly. Businesses must adapt to the transformation of loyalty campaigns. Art Nation Loyalty specializes in developing gamified campaigns that align with modern times and meet the needs of both customers and businesses. We help design loyalty programs that integrate mobile apps, personalization, and phygital approaches, ensuring their relevance and effectiveness.

When a program is developed with modern trends and the real needs of consumers in mind, it becomes a powerful tool not only for retaining customers but also for building an emotional connection with the brand. Such solutions can help companies stand out in the market and secure long-term success.