As brands prepare for 2026, loyalty is no longer just a program. It is a reflection of overall customer strategy, operational readiness, and how well brands understand and respond to evolving expectations.
We sat down with Sydney Shapiro, one of our Customer Engagement Strategy Account Managers to talk about what assumptions aged the fastest, what is actually working today, and how brands should rethink strategies to increase customer loyalty moving forward.
One of the fastest-aging assumptions from 2025 was that AI and personalization would quickly fix loyalty challenges on their own. In practice, brands that struggled with data hygiene, identity resolution, and operational ownership saw very limited impact.
The brands that succeeded treated AI and personalization as accelerators, not replacements, for strategy. If the underlying customer strategy was unclear or the data foundation was weak, AI simply exposed those gaps faster.
Another assumption that aged quickly was the idea that deeper discounting would sustain loyalty in a value-conscious market. While consumers remain price aware, loyalty programs built primarily on offers often trained customers to wait for promotions, putting pressure on margins and long-term value.
Brands that focused on recognition, relevance, and experience performed far more sustainably than those chasing short-term conversion.
We are seeing more brands blend free loyalty programs with paid memberships and subscriptions as part of broader strategies to increase customer loyalty. When designed well, this convergence creates predictable revenue, clearer segmentation, and stronger long-term engagement.
The biggest benefit comes when premium tiers deliver experiential value, such as exclusivity, convenience, service, or access, rather than just better discounts.
The challenge is clarity. Many brands struggle to define distinct value across free loyalty, paid membership, and subscription tiers. This can lead to benefit overlap, customer confusion, and internal complexity.
Our role is to help brands clearly define the value exchange at each level, map lifecycle journeys across channels, and align benefits to customer behaviors rather than spend alone. Measurement and governance are critical to ensure these models drive incremental value rather than cannibalization.
The most effective loyalty programs today move beyond transactional rewards and focus on recognition and relevance. Brands that build a true sense of belonging do so by acknowledging customer identity, behaviors, and milestones, not just purchase history.
This often shows up through recognition-based perks, status tied to engagement rather than spend, early access, and personalized moments across channels. These efforts are most effective when loyalty is treated as part of the broader customer strategy, not a siloed initiative.
We are also seeing strong performance when community participation, such as referrals, reviews, content engagement, or events, is treated as value creation. Loyalty becomes less about earning points and more about feeling understood and included.
Partnerships that reinforce customer identity and lifestyle will see the strongest growth in 2026. Lifestyle, wellness, and experience-based partnerships are especially compelling when they extend loyalty value beyond a single brand interaction.
From a loyalty perspective, the most successful partnerships feel natural to the customer and support long-term retention and lifetime value. Brands are becoming more selective, focusing on fewer, more meaningful partnerships instead of broad promotional networks that deliver short-term lift but limited loyalty impact.
Some of the biggest red flags include unclear data ownership or consent, misaligned customer value propositions, and operational complexity that creates friction in the customer experience.
We also see risk when partnerships are pursued without a clear measurement framework. If success metrics are not established upfront, brands can overestimate impact while underestimating cost, liability, or long-term effort.
Strong partnerships should support the overall customer strategy, not introduce confusion or friction for the customer.
The most significant gaps are rarely about technology itself. They are usually rooted in poor data quality, fragmented systems, unclear ownership, and weak governance.
Many teams have access to advanced AI and personalization tools, but lack repeatable workflows for testing, learning, and scaling responsibly. Without clean, connected customer data and defined processes, even the best tools fail to deliver meaningful value.
One common misconception is that AI can replace strategy. In reality, AI and personalization are most effective when applied to clearly defined use cases, such as churn risk identification or next-best-action recommendations, supported by strong segmentation and measurement.
Another misconception is that more personalization is always better. We advise brands to focus on meaningful personalization that prioritizes relevance and timing rather than excessive complexity that overwhelms teams and customers alike.
Brands earn deeper data by being transparent and intentional about the value exchange. We help clients design progressive data capture strategies tied to meaningful moments in the customer journey, clearly communicate how data improves the experience, and give customers control over their preferences.
Trust is built through consistency across channels and ensuring data use aligns with customer expectations, not just compliance requirements. This approach is foundational to long-term strategies to increase customer loyalty.
A modern loyalty ecosystem is defined by capabilities rather than a single platform. These include a unified customer profile, real-time segmentation, and the ability to orchestrate journeys across channels using consistent logic.
Equally important are governance, visibility into reward liability, and measurement tied directly to customer value. Leading brands prioritize interoperability so their loyalty approach can evolve as tools, channels, and customer expectations change.
That loyalty is primarily about points and discounts.
In 2026, loyalty should be viewed as a relationship strategy built on recognition, relevance, and trust. Programs that focus solely on transactions may deliver short-term gains, but they often undermine long-term value.
Brands that align loyalty with customer strategy and apply AI and personalization responsibly will be best positioned to build loyalty that actually lasts.
Building long-term loyalty requires more than programs and tools. Baesman helps brands design and execute strategies to increase customer loyalty through AI and personalization, optimized loyalty programs, and a cohesive customer strategy. Partner with us to turn engagement into lasting relationships.