Playing the Long Game: Behavioral Loyalty Strategies for Retaining Customers in an Era of Change

Effectiveness of Existing Loyalty Strategies Blind Spots Recommendations
10 min


What has changed in people’s behavior in recent years?
Loyalty Programs in E-commerce
Loyalty Programs in Financial Companies
Сomparative Analysis
Utilizing the Characteristics of People’s Behavior
Blind Spots in Loyalty Programs
Main Problems and Recommendations

In times when consumers are overwhelmed with choice and brand loyalty is constantly tested, the issue of customer loyalty becomes increasingly relevant. There is an opinion that attracting a new customer can cost up to five times more than retaining an existing one. Nevertheless, in the era of digital innovation, where over 55% of consumers prefer a digital experience over physical purchases, creating a deep and meaningful connection with the customer becomes a real challenge.

To this complexity is added the amount of stress that people face in the modern world, which significantly affects their decisions and choices. Under the pressure of stress, consumers may seek more convenient, simple, and soothing purchases, which can alter traditional approaches to attracting and retaining customers.

In this context, understanding how behavioral loyalty strategies can be adapted to modern challenges becomes key for enterprises aiming not only to retain their customers but also to transform them into loyal brand advocates.

This is particularly relevant for the e-commerce and financial services sectors, where the pace of change and innovative solutions can easily alienate even the most loyal customers. For example, in the world of e-commerce, where over 75% of online shoppers abandon their cart due to high shipping costs, loyalty strategies that include free shipping can significantly increase customer retention levels.

In the financial sector, where trust and security play a key role, it has been found that more than 70% of customers are willing to share personal data with their bank in order to have a more personalized user experience. This indicates a huge potential for the development of loyalty programs based on individual offers and personalized service.

A significant number of companies already recognize the importance of loyalty programs. According to data, 90% of businesses prioritize improving or expanding their loyalty programs, indicating a broad understanding of the value of investing in customer retention. This focus on loyalty programs underscores the importance of strategies aimed at supporting and strengthening relationships with customers in the modern business environment.

Companies in the fields of e-commerce and financial services implement behavioral loyalty strategies, which exactly?
And what can be improved to not just retain customers, but turn them into brand advocates in these times of constant change?

For a complete picture, let’s consider together what has changed in people’s behavior in recent years.

Changes in the values, desires, and lifestyles of consumers not only reflect the evolution of society but also directly affect the strategies of companies in various industries. But what exactly has changed, and why? New consumer groups, such as millennials and Generation Z, have changed market trends with their approach to purchasing, which is focused on innovation, social responsibility, and the ethical behavior of brands. They prefer products made from environmentally friendly materials and support companies with a clear social mission.

COVID-19 and information overload have impacted people’s psychological state, increasing levels of anxiety and stress, prompting the search for ways to reduce them through purchases and the desire to distract from negative emotions. This creates opportunities for companies to adapt their marketing campaigns to the emotional needs of consumers, offering content that is easy to digest and useful.

Economic instability is making people more cautious with their spending, valuing transparency and advantageous offers. Modern consumers are looking not only for quality products or services but also for a holistic brand interaction experience that includes a personalized approach and a high level of service.

The advancement of technology and the proliferation of the Internet have increased consumer expectations regarding the speed, convenience, and intuitiveness of online shopping, prompting brands to develop omnichannel strategies. The desire for uniqueness and an individual approach compels companies to apply advanced technologies to create a personalized experience for each customer.

The mentioned changes in consumer behavior apply only to a part of the population🗺️, predominantly those who have access to the latest technologies and possess digital literacy. However, one cannot ignore the existence of a technological divide and digital alienation, which are still present in some regions and among certain demographic groups. This alienation can limit opportunities for access to digital products and services, as well as affect the level of interaction with brands.

It can be argued that over time, elements such as service personalization, free shipping, and other customer-oriented practices may become standard requirements for any company seeking to maintain its competitiveness in the market.

Loyalty Programs in E-commerce

Leading companies use a variety of loyalty programs adapted to specific markets. Let’s consider them in a table.

Analyzing the loyalty programs of companies, it can be noted that the following are common:

  • They facilitate the shopping process, often thanks to digital technologies.
  • Programs provide individual offers and rewards based on customer preferences and behavior.
  • They offer special promotions or unique services for program members.
  • They maintain ongoing communication with customers that goes beyond one-time transactions.
  • Loyalty rewards can have a financial nature, encouraging repeat purchases.

Although the exact financial outcomes may vary and not all nuances are always publicly disclosed, trends indicate that these programs are beneficial for increasing customer spending and loyalty, which is important for the long-term profitability and growth of companies.

Not all loyalty programs may be beneficial for the user under certain conditions. For example, Shein may offer discount coupons that seem beneficial, but they often have restrictions such as a minimum purchase amount that is higher than the customer’s budget, or they are only valid for certain categories of goods. This can lead customers to buy more in order to use the coupon, which can result in unnecessary expenses. Is it possible that discounts are used merely to attract customers but actually offer little real value due to high standard prices, or taxes, or other conditions?

Overall, the goals of loyalty programs are to attract new customers and retain existing ones, as well as to increase the company’s profits, and in many cases, they successfully accomplish these tasks.


Customer loyalty strategy is a comprehensive approach that includes many different elements. Considering individual products, such as chatbots or recommendation systems, is not enough.
A loyalty strategy takes into account the entire customer journey – from the 🎬first experience of interaction with the brand to subsequent communication and service. Every stage of this journey can influence customer satisfaction and loyalty.

For example, Starbucks has created not just a chatbot, but a comprehensive loyalty program that includes personalized drink recommendations, special offers for regular visitors, a convenient mobile app, and a pleasant atmosphere in their establishments. All of this together forms a positive customer experience and loyalty to the brand. And other factors should not be underestimated. As they will have no less impact.

You can plan the entire journey down to the details, but the customer may not like the company itself and its principles. The situation will look like going on a perfectly organized Valentine’s Day, but not with a loved one, or the partner will unexpectedly propose to pay more than you expected.

Loyalty Programs in Financial Companies

Analyzing the loyalty programs of various companies, it can be noted that the following are common:

  • Accumulative bonus programs: Customers earn points for certain financial operations, which can then be exchanged for discounts, goods, or services.
  • Cashback: A return of a portion of the money spent by the customer on purchases or other transactions.
  • Privileges for VIP clients: Exclusive conditions and benefits for clients with large turnovers or balances on their accounts.
  • Partner programs: Collaboration with other companies to provide discounts or special terms on their products and services. For example, a loyalty program from a well-known bank may offer bonus points for every credit card transaction, but to exchange these points for discounts or gifts, a large number of points may need to be accumulated, which requires customers to increase their spending. Another program may offer a higher savings rate provided that funds are kept in the account for an extended period, which may be inconvenient for those who require liquidity.

Similarly, not all loyalty programs may be beneficial for the user under certain conditions. And the goals of the programs in attracting new clients and retaining them, engaging them to use the bank’s services are being met.

Сomparative Analysis

When comparing loyalty programs of financial companies and e-commerce, it can be said that they have in common the fact that they stimulate customers to buy more goods or services, provide the opportunity to accumulate points or discounts that can be used for future purchases. However, they have different mechanisms of action and differences in how they work. For example, loyalty programs of financial companies provide the opportunity to receive bonuses for using credit cards, while e-commerce loyalty programs may offer free shipping, early access to sales, and other benefits. In addition, e-commerce loyalty programs can be more personalized and integrated into a broader ecosystem of services, which promotes increased user spending thanks to their flexibility and integration. In any case, loyalty programs are an effective tool for attracting and retaining customers, which helps to reduce customer churn and increase business turnover.

Universal and specific loyalty strategies in the fields of e-commerce and financial services differ in their orientation. Universal strategies, such as accumulating points for each purchase, can be applied in both e-commerce and financial services. Specific strategies, for example, loyalty programs based on a bonus system, can be more effective in certain industries. For example, in e-commerce, such programs may include free shipping, early access to sales, etc., while in financial services, it could be the accumulation of bonuses for using credit cards and the delivery of these cards.


  1. Financial company programs typically offer higher rewards in percentage terms (cashback, miles, etc.) But this is associated with more active use of their financial products specifically.
  2. Retailers offer bonuses, discounts specifically on their goods or services. Therefore, their programs are less “aggressive”, but also less financially beneficial.
  3. Financial company programs are more complex to use, with a greater number of various conditions, rules, and restrictions.
  4. Retailers usually explain the benefits of their loyalty programs and the conditions for receiving rewards more simply.
  5. Despite certain common features, financial loyalty programs are usually much more aggressive and aimed at increasing company profits, rather than exclusively benefiting customers.
  6. Financial companies skillfully exploit basic human needs for status, security, and belonging to a group. This allows them to achieve a higher level of loyalty and customer satisfaction with their programs.
  7. But in the long term, retailers with focused loyalty programs often turn out to be more stable and attractive to customers due to the transparency of conditions and real rewards for loyalty.
  8. There is a clear trend towards the convergence of loyalty programs in both spheres due to the borrowing of successful practices and the desire to maximize customer satisfaction.
  9. In the financial sector, there is a trend towards the consolidation of loyalty programs and the creation of ecosystems that combine banking, insurance, and investment products. This allows for a more comprehensive motivation of clients.
  10. Retailers are increasingly using the capabilities of digital tools for personalizing communication and loyalty offers. This enhances the effectiveness of the programs.
  11. The role of the social component is growing in both financial and retail loyalty programs. Communities, gamification, status levels – effective ways to interact with the audience.
  12. Leaders in both spheres are actively investing in data analysis and scientific methodologies to optimize their loyalty programs and motivational mechanics. This gives them strategic competitive advantages.

Now let’s look at it from the perspective of using human behavior characteristics.


  • Using framing effects and gamification to engage customers. For example, the accumulation of points/bonuses is presented as an exciting game.
  • Appealing to emotions and the motivation to gain pleasure, rather than just rational benefits. The programs evoke positive emotions and motivation.
  • Using effects of attachment and habituation. People become accustomed to certain programs and continue to use them.
  • They exploit basic cognitive biases, such as the endowment effect (unwillingness to lose accumulated bonuses) and hyperbolic discounting (underestimation of long-term costs).
  • They encourage impulsive behavior and excessive consumption through “buy now” promotions. They use the FOMO effect.
  • They resort to dark patterns of design to hide part of the information, complicating the comparison with alternatives.
  • They rely on bounded rationality: people do not optimize their decisions, but act intuitively. For example, choosing one program due to the overall “good” impression.
  • They play on people’s fear of losing their social status. Higher-level programs signal about status.


  • Financial programs often manipulate behavior using complex rules, hidden fees, etc. But overall, they act more aggressively. Retailers are more transparent in their offers.
  • Financial companies successfully appeal to desires for status and recognition (levels in programs). Retailers focus more on satisfying needs.
  • Financial programs often stimulate excessive consumption and indebtedness. E-commerce is limited to a certain niche of goods or group.
  • Financial companies exploit clients much more aggressively. They manipulate people’s money, not just their consumer habits.
  • They promote much riskier financial behavior – leading to indebtedness, encouraging irrational spending for the sake of status.

Yes, both financial companies and retailers play on cognitive biases and bounded rationality. This is a common feature of practically all industries. So, should approach this calmly.

The degree of influence and potential harm differs. The risks of debt and financial problems are much higher than overspending on clothing or unnecessary purchases for customers.

The degree of influence and potential harm differs. The risks of debt and financial problems are much higher than overspending on clothing or unnecessary purchases for customers. Perhaps sometimes this bias is overly exaggerated. Indeed, the financial sector as a whole still contributes to economic growth and the well-being of society. And individual unethical practices are rather exceptions.

Blind Spots in Loyalty Programs

From the perspective of neuroeconomics, blind spots in loyalty programs may include:

Underestimating the emotional connection.
Positive emotional experiences influence customer decisions more than rational advantages. Therefore, elements of emotional connection can be added to the program so that customers want to stay with the company longer. For example, Monobank, which added a cat to its strategy that creates a mood even in the mobile app environment.

Overestimation of instant reward. Most companies use FOMO (Fear of Missing Out) in their programs, which is usually effective. However, research shows that it is also important to understand the value of delayed rewards and their impact on forming long-term loyalty and habits. Therefore, it would be appropriate to add long-term bonuses for customers, especially if the company’s target audience is prone to deeper analysis and values long-term relationships with brands. Recall the classic experiment that explores this topic, “the marshmallow test” by Walter Mischel, which showed that children who were able to delay gratification by not consuming a marshmallow in order to receive a larger reward later were more successful later in life. This indicates that the ability to delay gratification is associated with better life outcomes. Therefore, by creating conditions for forming long-term loyalty, you additionally attract more successful customers.

Underestimation of social comparison. Studies in the field of gamification, which is often used in loyalty programs, confirm that social comparison can increase user motivation and engagement. Leaderboards, levels, and other elements that display user progress can encourage them to participate more actively in the program. Ethically comparing clients’ achievements can greatly increase client engagement.

Insufficient attention to habit formation. Repeated actions that reinforce positive associations with the brand can increase customer loyalty. Paying attention to the trend of rational consumption, if these trends are taken into account, can help customers create useful consumption habits within the company itself, which will provide long-term positive results that are beneficial to both parties.

Ignoring cognitive biases. Underestimating the role of cognitive biases, such as the endowment effect (where people assign more value to things they already own), can result in loyalty programs not utilizing their full potential to influence customer decisions. At the same time, it is both good and bad. Bad – because some products may be unfairly positively evaluated, and good because the company as a whole receives positive feedback

Overestimation of rational choice. Companies are well aware that not all consumers make rational decisions; they are more emotional and spontaneous. On one hand, this increases the chances of dissatisfaction with the purchase and interaction with the company, and on the other, it creates many opportunities to influence the purchase unconsciously. It is worth considering both scenarios with customers, when a client made an emotional purchase and regretted acting spontaneously, and when they made an emotional purchase and do not revisit the situation.

Taking into account these blind spots can help develop more effective and influential loyalty programs that use a deeper understanding of the behavioral and neural dynamics of customer decision-making.


Loyalty programs in both spheres have a common goal – to increase satisfaction and retain customers by stimulating their activity. However, financial companies resort to more aggressive methods of influence and data monetization.

Financial programs offer higher monetary rewards but are characterized by more complex terms and potentially greater risks for customers. Retailers offer smaller bonuses but are simpler to use.

In the long term, more stable loyalty is demonstrated by focused retailer programs with a clear value proposition for customers.

Despite certain ethical reservations, overall, loyalty programs in both spheres positively affect customer satisfaction and market development. The gradual convergence of approaches facilitates the exchange of best practices between industries.

A key trend in both spheres is the personalization of loyalty offers based on customer behavior data and the use of digital tools for pinpoint targeting. This allows for a significant increase in the ROI of programs.

The role of the social component and gamification is increasing to deepen the emotional engagement of customers in loyalty programs of both financial companies and retailers.

Despite some biased attitudes, most leading financial companies are also concerned with corporate social responsibility and sustainable development, which positively affects loyalty programs.

Overall, there is a gradual convergence of approaches to loyalty programs in both spheres with a focus on satisfying the individual needs of each separate customer, which is a positive trend.

Main Problems and Recommendations

Main problems and possible risks of loyalty programs of financial and retail companies that require regulation.

  1. Financial programs are often too complex and opaque for average customers, leading to false expectations and negative feedback.
  2. There are risks of clients incurring unjustified financial expenses to maintain their status in the program, especially in the financial sector.
  3. Sometimes there are questionable practices of monetizing customer data without their informed consent. Requires enhanced data protection and regulation norms.
  4. It is necessary to provide independent mechanisms for assessing the long-term benefit of loyalty programs for consumers, as the direct benefit of companies may not coincide with the interests of customers.
  5. It is advisable to develop special norms for the protection of consumer rights when freezing or canceling loyalty programs to prevent reputational losses for companies.
  6. Ensuring flexible portability of accumulated bonuses and statuses between loyalty programs will strengthen customer trust in such programs overall.
  7. The active application of CIR economy concepts (co-creation of value) in managing loyalty programs will deepen the mutual benefit for both parties.


For e-commerce companies:

  • Customer Segmentation and Individualized Paths: Apply deep segmentation of the customer base to create even more personalized interaction paths based on their previous purchases, behavioral patterns, and prediction of future needs.
  • Emotional Intelligence: Develop marketing campaigns and promotions that utilize emotional intelligence by analyzing the moods and emotional states of customers through their interaction with the brand on social media and other channels.
  • Continuing Interaction After Purchase: Develop after-sales service programs that maintain continuous contact with the customer, offering useful tips, product usage ideas, and special offers that encourage repeat purchases.

For financial companies:

  • Predicting Financial Needs: Use advanced analytical tools to predict future financial needs of customers, offering them solutions and products even before they realize this need.
  • Integrated Financial Solutions: Develop integrated financial solutions that combine lending, savings, investments, and insurance, providing the client with a comprehensive approach to managing personal finances.
  • Personalized Financial Life Plans: Offer clients the development of personalized financial plans that take into account their life goals, age, income level, and other individual factors, enhancing loyalty through a sense of personal approach.

General recommendations:

  • Sustainability and Responsibility: Emphasize the company’s commitment to sustainability and social responsibility, integrating these aspects into loyalty programs that not only attract customers but also contribute to positive social impact.
  • Digital Innovations and Security: Continuously implement digital innovations to enhance the convenience and accessibility of services, while simultaneously ensuring a high level of security and protection of customer data.

Considering these aspects and blind spots will allow e-commerce and financial companies to develop more effective and in-depth loyalty strategies that meet the modern needs and expectations of customers, ensuring their long-term commitment to the brand