Customer loyalty programs are now a core part of modern marketing.

The loyalty management market is valued at over $10 billion.

Yet many brands still build programs on outdated assumptions.

These loyalty myths lead to:

• Poor engagement
• Wasted budget
• Customer frustration
• Missed growth opportunities

Retention matters more than ever.

A small improvement in retention can drive major profit gains.

At the same time, acquisition costs continue rising.

In this environment, loyalty mistakes are expensive.

As Chris Galloway explains:

“Loyalty programs only work when they are built around clear business goals and real customer motivation.”
— Chris Galloway, EVP Strategy & Design, Brandmovers

This guide breaks down 10 of the most damaging myths.

Each one can weaken your program if left unchallenged.

The Hidden Cost of Loyalty Misconceptions

Loyalty myths persist for a reason.

Many marketers rely on:

• Outdated models
• Oversimplified customer behaviour
• The wrong success metrics

The customer landscape has changed.

Programs are no longer just “points for purchases.”

Customers now expect:

• Personalisation
• Omnichannel experiences
• Meaningful rewards
• Trust and transparency

When brands apply old thinking, they build programs that fail.

The cost is not just money.

It is also lost its competitive advantage.

Myth #1: Loyalty Programs Don’t Generate Measurable ROI

This is one of the most dangerous myths.

Well-designed loyalty programs do generate measurable returns.

ROI shows up in several ways:

• Increased spend
• Higher retention
• Lower acquisition costs
• Better customer data

The key is tracking impact correctly.

As Chris Galloway notes:

“The best loyalty programs create value on both sides — customers feel rewarded, and brands see measurable behavioural change.”
— Chris Galloway, EVP Strategy & Design, Brandmovers

How to measure loyalty ROI

Track outcomes beyond enrollment:

• Incremental revenue vs non-members
• Customer lifetime value changes
• Repeat purchase frequency
• Cross-category buying

Myth #2: Only Big Brands Can Afford Loyalty Programs

This is no longer true.

Technology has made loyalty accessible.

Smaller brands can launch effective programs using:

• SaaS loyalty platforms
• Modular features
• Scalable pricing

Budget-friendly loyalty approaches

• Start with simple rewards
• Focus on recognition, not discounts
• Use existing customer data
• Add complexity only when needed

Small programs often outperform large ones because they can move faster.

Myth #3: Points and Discounts Are the Only Rewards That Work

Modern customers want more than discounts.

Many value:

• Experiences
• Status
• Access
• Ethical alignment

Reward innovation options

• VIP support
• Early product access
• Exclusive events
• Charitable impact rewards
• Personalised services

Reward variety keeps engagement high.

Myth #4: Loyalty Programs Should Focus Only on Heavy Spenders

Loyalty is not just for top customers.

Light and occasional buyers often have the most growth potential.

Broad participation supports:

• Market share expansion
• Long-term customer development
• Better behavioural insight

Strong loyalty programs create pathways

• Entry tier for new members
• Growth tier for repeat buyers
• VIP tier for high-value customers

Myth #5: Simple Point Systems Are Outdated

Point systems still work.

Many consumers prefer them because they are easy to understand.

The issue is not points.

The issue is poorly designed points.

Modern point programs include:

• Tier multipliers
• Bonus categories
• Surprise rewards
• Points for engagement actions

Simplicity remains powerful when paired with relevance.

Myth #6: Loyalty Programs Are Only for Retail

Loyalty works across industries.

Programs now support:

• SaaS adoption
• B2B partnerships
• Service retention
• Healthcare engagement

The mechanics change.

The principle stays the same.

Loyalty encourages valuable behaviours.

Brandmovers Case Study: B2B Loyalty Driving Relationship Growth

Brandmovers has delivered loyalty programs beyond retail.

One example is a relationship-focused program designed to support enterprise partner engagement.

Case Study: Building Customer Relationships and Growth with Enterprise B2B Loyalty
Client: Enterprise B2B Organisation
Result: Education-led loyalty strengthens long-term partner performance
URL: https://www.brandmovers.com/building-customer-relationships-and-growth-with-enterprise-b2b-loyalty

Myth #7: Launching a Loyalty Program Is Quick and Easy

Loyalty programs require planning.

Rushed launches often fail.

Key pre-launch needs

• Clear objectives
• Platform integration
• Legal compliance
• Staff training
• Customer communication

Smart brands pilot first.

They test before scaling.

Myth #8: Success Is Measured by Enrollment Numbers

Enrollment is not success.

Engagement is success.

A large inactive membership base provides no value.

Better loyalty KPIs

• Active participation rate
• Redemption frequency
• Spend lift over time
• Retention improvement
• CLV growth

Focus on behavioural change, not vanity metrics.

Myth #9: Generic Programs Work as Well as Personalised Ones

Customers now expect personalisation.

Generic loyalty feels transactional.

Personalised loyalty feels like recognition.

Personalisation improves:

• Offer relevance
• Engagement rates
• Emotional connection
• Retention

As Chris Galloway highlights:

“Personalisation is no longer optional. Loyalty only becomes meaningful when customers feel seen and valued.”
— Chris Galloway, EVP Strategy & Design, Brandmovers

Myth #10: Privacy Concerns Make Loyalty Data Too Risky

Privacy matters.

But trust-building data practices strengthen loyalty.

Customers will share data when:

• Consent is clear
• Value is obvious
• Control is provided

Privacy-forward loyalty strategies

• Transparent opt-in
• Minimal data collection
• Strong security
• Easy preference management

Ethical loyalty is becoming a competitive advantage.

Brandmovers Case Study: Loyalty and Engagement Through Incentive Design (DiGiorno)

Brandmovers has also shown how promotional loyalty mechanics can drive measurable impact.

A seasonal engagement campaign for DiGiorno combined interactive rewards with sustained participation.

Result: Increased retail sales and engagement throughout National Pizza Month
Proof Point: Multi-touch engagement model supporting narrative sales lift

Case Study: Sweepstakes With Interactive Gameboard Increased Retail Sales For DiGiorno
Client: DiGiorno
URL: https://www.brandmovers.com/31-days-of-digiorno-case-study

Quick Takeaways: Loyalty Program Truths

• Loyalty ROI is measurable when tracked properly
• Small brands can run highly effective programs
• Rewards should include experiences, not just discounts
• Inclusive programs drive more growth than exclusive ones
• Points still work when designed well
• Loyalty applies beyond retail
• Launch success requires planning and testing
• Engagement matters more than enrollment
• Personalisation drives emotional loyalty
• Privacy leadership builds trust

Taking Action: What to Do Next

Start by reviewing your current program.

Ask:

• Are we measuring the right outcomes?
• Are rewards meaningful beyond price?
• Do customers feel recognised?
• Are we building trust through transparency?

Loyalty is not a tactic.

It is a long-term capability.

Brands that abandon outdated myths will win the next decade of retention.

About Brandmovers

Brandmovers helps brands design loyalty and engagement programs that drive measurable retention, growth, and customer value.

From points-based ecosystems to personalised loyalty strategy, Brandmovers builds programs that combine behavioural insight with scalable technology.

Request a demo to see how Brandmovers can help you create a loyalty program that delivers real ROI and long-term customer commitment.