Customer loyalty isn’t built overnight. It’s a journey that starts when customers first discover your brand, continues as they use your product and share their experience, and extends to their next purchase. It’s a continuous cycle of care and connection.
But how well do brands really understand their customers? Walking in their shoes, seeing through their eyes, and anticipating their next moves are essential. But is that enough? Does this approach work for every customer? What signals should brands be paying attention to?
This month, we are traveling through time to explore the customer journey. We will explore new approaches and analyze brands that get it right (and those that don’t).
The brands that get it right don’t just react to customer behavior—they predict it. They understand that loyalty isn’t just about what customers buy but why they buy it. Companies that personalize their marketing and loyalty strategies to align with their audience's needs can boost revenue by 10-20% in a single quarter.
The Loyalty Lifecycle: Understanding the Customer Journey
If brands are not in tune with what customers are all about, then they are missing the mark.
And we’re not just talking about the usual “what do they want to buy?” It’s deeper than that. The most successful brands today are those that get into their customers’ heads and know exactly what makes them tick.
When we say personalizing approaches for better customer loyalty, we are talking about ‘personalizing’. Knowing and catering to their unique differences, selling points, and the connection they crave in this big market. Your audience is authentic to you. But even you audience is divided by minor and major differences!
While Boomers may not care about trends or fully understand them, Gen Z wants to use them in a unique way that doesn’t come off as "cringey." Millennials, on the other hand, are all about sustainability but also crave personal, engaging experiences. Get these personas right, and you can create experiences that feel tailor-made for them. Because, spoiler alert, they will be.
How to understand them? Read to find out!
The Loyalty Lifecycle | Understanding Customers
News From Loyalty World
GoPro: The Power of User-Generated Content
GoPro’s success is rooted in seeing the world through its customers’ lenses (literally).
By analyzing user-generated content (UGC), the company has identified customer demographics, professions, and preferences. This deep understanding allowed the company to tailor marketing efforts, enhance product features, and create an authentic community-driven brand.
A key turning point came in September 2020, when GoPro bundled the camera with a one-year subscription at a discounted price. This aggressive bundling strategy saw over 70% of direct purchases include a subscription, driving higher customer retention and lifetime value. Despite lower upfront margins, the lifetime value of these subscribers compensated for the discount, shifting GoPro’s focus from hardware sales to building ongoing customer relationships.
By the end of 2021, GoPro’s subscription base had tripled to 1.6 million, and direct sales contributed over 34% of revenue. This strategic shift helped stabilize financial results, with cash reserves growing to $297 million by 2021. GoPro’s subscription model also led to better financial predictability, enabling the company to invest more.
As of 2023, GoPro’s subscription ecosystem has grown, contributing significantly to its recurring revenue. With software upgrades like AI-powered editing tools in the App, GoPro enhanced customer experience and improved content management.
GoPro, with a perfect understanding of its customer base, directed its shift to what matters.
Case Study: How GoPro’s bet on UGC turned it into a content machine
Spotify: Turning Engagement into Habit
Spotify’s secret weapon? They look at music through their customers’ eyes, seeing it as a tool for self-expression.
For many, music is a way to define who we are. We connect with others who listen to the same genres or artists because we feel that shared taste reflects a part of our identity.
Spotify taps into this emotional connection by offering personalized recommendations, from Spotify Wrapped to mood-based playlists and collaborative features. These tailored experiences don’t just suggest songs—they create a deeper, ongoing relationship with users. The result? Spotify becomes more than a service; it becomes a daily part of life.
By viewing music as a reflection of personal identity, Spotify builds habits, ensuring customers keep coming back. Long-term loyalty is created not just through rewards, but by creating emotional bonds with its users.
Spotify’s Transformative Impact on the Music Industry and Its Innovative Revenue Model
Starbucks: A Lesson in Staying Relevant
Even the biggest brands can stumble when they misread their customers. Starbucks faced backlash in 2024 for failing to align their loyalty strategy with changing consumer values.
As Gen Z and Millennials prioritized ethical consumption, Starbucks’ static approach led to declining engagement. The company’s shift towards more transactional loyalty rewards, such as tracking total dollars spent rather than the quality of the experience, made their program feel less meaningful. Customers began to see Starbucks as a place for a quick, convenient coffee rather than an immersive experience.
The rise of mobile orders and drive-thrus also diminished the in-store, social "third place" vibe that originally set Starbucks apart. Once a beacon of exclusivity, their loyalty program was now just a way to rack up points. Consumers, particularly younger generations, wanted more than just discounts. They craved experiences that matched their values, like ethically sourced products and opportunities to engage with brands on a deeper, more meaningful level.
The takeaway? Customer preferences evolve, and brands must continuously adapt or risk losing relevance.
How Starbucks Devalued Its Own Brand
Loyalty Tip of the Month
Loyalty programs are an experience. And like any great experience, it needs a personality.
Establishing loyalty is about the experience you offer every step of the way. Your program's personality plays a key role in shaping how customers interact with your brand throughout their journey. Is your program exclusive, friendly, or gamified?
Defining your program’s personality helps set the tone for every interaction, from the first touchpoint to the final reward. This personality influences how you communicate, engage, and deliver value to your customers, making them feel more connected and appreciated.
Aligning your program's tone, offers, and messaging with your brand can create a more authentic and cohesive experience that resonates with your customers, encouraging long-term loyalty. Your program's personality should evolve with your customers' journey, ensuring it feels relevant, engaging, and consistent at every stage.
Insight of the Month
55% of customers prefer self-serve channels over speaking to a support representative.
This highlights the growing desire of customers to be in charge of their own customer journey. Today’s consumers want to stay on top of their purchases and have the flexibility to manage their own experience.
Customer experience is no longer a one-way street—it’s a shared responsibility between brands and customers. While brands must provide seamless, personalized experiences, customers also play a key role in shaping their interactions. Giving customers the tools and freedom to take charge builds trust, creates loyalty, and increases overall satisfaction.
When customers feel empowered, they’re more likely to return and advocate for your brand. Allow them to personalize their journey, and you'll create a more meaningful, long-lasting connection that benefits both parties.
Welcome to Your Loyalty Calendar: April Edition!
Our Loyalty Calendar is here to inspire you with fresh ideas to celebrate these special days and strengthen your customer relationships.
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