How do you create a “Loyalty culture” within your business?

In “How to Keep Hold of Your Customers”, our latest report exploring the subject of shopper loyalty, we explored the challenge of differentiation in an AI-dominated world. In this follow-up blog, Siro Descrovi — dunnhumby Customer Strategy Manager — explains why creating a loyalty culture can help retailers to fight back against that threat.

Trends are important, particularly in retail. When shoppers tell you that they want help making healthier, more sustainable choices, for example, then it probably pays to listen. Fail to do so and you won’t just look out of touch — you’ll risk ceding ground to the retailers that do. This principle applies almost universally, spanning everything from new product development and ranging through to private brand and pricing.

Trends can also be dangerous. Homogenisation is a real issue in retail, particularly in the grocery space. Delivering what customers want is important; delivering the same thing that everyone else is can be a fast track to irrelevance.

Loyalty programmes are no different. To be truly effective, a loyalty programme also needs to stand out. In a BCG study from late last year, for instance, researchers found that — while membership of loyalty programmes has risen since 2022 — consumer engagement has fallen by 10%. And actual loyalty has dwindled 20% over the same period¹.

To me, those numbers speak to the growing need for retailers to ensure that their loyalty programme is more than just a commodity. To be really effective a loyalty programme needs to be relevant. And to be relevant, a loyalty programme needs to be built on a “loyalty culture”.  Retailers should be focused not only in making their loyalty programme work harder — but embedding loyalty into every aspect of their business.

Defining loyalty

Before we go any further, it’s important that I clarify what I mean when talking about “loyalty”. Up until now, I’ve been referring to loyalty in the “Little L” sense — loyalty as in loyalty programmes, run by a dedicated loyalty team, and overseen by a loyalty manager or director. When I say that the “next phase of loyalty will be about culture”, though, I’m talking about the “Big L” kind of loyalty; the fundamental idea of customers staying true to a brand, and a brand staying true to its customers.

This distinction matters. If you want to boost membership and engagement with a loyalty programme, you might look at enhancing your personalisation capabilities or introducing new rewards. If you want to drive loyalty as a whole, on the other hand, you’re going to need to pull on a much broader array of levers. “Big L” loyalty is driven by everything from pricing and promotions through to convenience, store experience, assortment, and brand trust.

That’s where the need for a “loyalty culture” becomes so apparent. The things we’re talking about here — pricing, store experience, and so on — aren’t all going to come under the purview of a loyalty director. They’re organisation-wide concerns, ones that need multiple teams to align if they’re to be improved. Loyalty (the “Big L” kind) is no longer the responsibility of a single team or person, and that fact requires a change in the way that we think about how to build it.

Building bridges

Per BCG, when a loyalty programme struggles it’s usually because it’s disconnected from what customers really want. But I think the reality here is that many loyalty programmes today can’t deliver what customers want. Constrained and isolated, the loyalty function itself just can’t offer what shoppers are looking for.

That can change, but only with a change in approach, too. Loyalty is too important to be on the shoulders of a single department.

That’s why the loyalty leader of the future will need to be more than just a programme owner. They’ll need to be a bridge-builder — not just between departments, but between customers and other departments, too. They’ll need to take insights to their colleagues in finance, marketing, ops, buying, and store teams, and guide them towards decisions that really reflect what shoppers want. They’ll need be an organisation-wide advocate for “Big L” loyalty.

The only way they can do any of this, of course, is with the groundwork already laid. A loyalty culture isn’t just important because it gets people thinking in the right way. It’s important because it provides the framework that loyalty managers need to deliver on customer demands. Beyond points, beyond perks, it creates the possibility that — wherever customers want to go — the retailer can go with them.

Remaining true to what matters

I started this post by talking about trends and differentiation, and that’s because — more than anything else — a loyalty culture is built on both on creativity and an ability to listen. Doing things differently means challenging assumptions, asking the right questions, and ensuring that the entire organisation is focused on the customer. Tomorrow’s loyalty leaders will worry less about what the competition is doing, and more about what’s right for shoppers. Customer-centric — not technology-centric — innovation will be their focus.

This emphasis on creativity and problem solving won’t be unique to loyalty or retail, of course. Those capabilities are becoming core expectations across industry. According to the World Economic Forum’s latest Future of Jobs report, analytical thinking and creativity will soon be the biggest priorities for employers. As automation reduces the value of raw technical execution, the importance of imaginative thinking, emotional intelligence, and cross-silo working will rise.

For the truly forward-thinking, though, this won’t just be about bringing the right skills in. Instead, it will be about structuring the business in a way that lets the owners of those skills thrive, and bring the rest of the business along with them.

The world’s most customer-first companies already link loyalty-related KPIs to their bonus schemes, not just for loyalty managers or team members, but across the organisation as a whole. From store workers to buying teams, everyone in the company has a compelling reason to improve satisfaction and loyalty.

A future in which everyone was incentivised to think deeply about what’s best for customers? Now that could be truly different.