The Two Investments Every Loyalty Strategy Needs | Current Forward Insights [Skip to main content](#main-content) [What we do](/what-we-do) [Contact](/contact) [About](/about) [Insights](/insights) [Start your project](/contact) [←Back to Insights](/insights) # The Two Investments Every Loyalty Strategy Needs 3 min readloyaltyresearchstrategyretentionA well-designed loyalty program is one of the most effective tools a brand can build. When the mechanics are right, a single transaction becomes a habit, a habit becomes a routine, and a routine becomes a relationship.But there is a second investment most brands undervalue, and without it, even the best-designed program will eventually plateau. That investment is brand love: the identity-driven connection that makes customers choose you even when they don't have to. Together, these two investments don't just add up. They compound.THE TWO INVESTMENTSIncentive-driven loyalty is driven by programs: points, discounts, and rewards that incentivize purchasing behavior. When designed well, they turn a single transaction into a habit.Identity-driven loyalty is driven by brand love. It's the connection that makes a brand feel irreplaceable: the brand that knows me, reflects my values, and gives me a reason to stay even when someone else is offering the same price.These aren't competing priorities. They're compounding ones. A strong program creates the conditions for brand love to develop, and brand love makes the mechanics more meaningful. The strongest loyalty research explores how to drive both amongst a brands' audiences.LOYALTY IS A BEHAVIORAL REINFORCEMENT MECHANISMHere's a frame that changes how most teams approach program design: rewards aren't gifts. They're behavioral reinforcement mechanisms.Points and perks work because they signal to a customer, consciously or not, that a specific behavior is worth repeating. But most brands reward the behavior that's easiest to track (purchases) rather than the behavior that matters most to long-term growth: referrals, category expansion, or choosing you over a competitor on a day the discount isn't running.Start with the behavior you want. Then design the reward.That reframe adds a layer to the research question. Alongside “what rewards do our customers want?” brands should also be asking “what behavior do we most need to drive, and what would make it feel worth repeating?” Both questions matter.RESEARCH MULTIPLE AUDIENCES TO DEEPEN LOYALTYBefore evolving or building a loyalty program, you need to understand three distinct audiences, and each one requires deliberate research:Your most loyal customers. These are the people already in your corner. Any program evolution must protect and deepen that relationship. Research this group to understand what's working, what they value, and what would make them feel recognized.Customers with untapped potential. These are shoppers who've purchased, shown some affinity, but haven't crossed into true loyalty. Research here reveals what's in the way, and what mechanics or experiences would tip them over.Customers who don't know you yet. These are the people you want to attract who feel no loyalty to your brand today. Understanding what drives their loyalty elsewhere, and what would make your brand worth considering, is what separates a program that grows market share from one that just retains it.A loyalty program built without research across all three of these audiences is a guess. Research is what turns the guess into a strategy.RESEARCH DOESN'T STOP AT INSIGHTLoyalty research needs to connect all the way to revenue. The goal of loyalty research is a set of mechanics that finance can model, operators can build, and customers can feel.That means research teams and finance stakeholders need to be in conversation from the start, not at the end. Research answers the 'what' and the 'why.' Finance turns that into the 'how much' and 'at what cost.' Neither can do their job fully without the other.At Current Forward, we believe research is a critical component of any loyalty and retention strategy.If you'd like to explore how research can help you deepen loyalty and drive desired business results, we'd love to talk. ### Recent Posts [When quantitative research should lead](/insights/when-quantitative-research-should-lead)[Mixed-method research sprint framework](/insights/mixed-method-research-sprint-framework)[The conversations between SXSW sessions](/insights/the-conversations-between-sxsw-sessions) ## Need help turning insights into action? 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