Customer loyalty hasn’t disappeared, but it has become more situational. Consumers are participating in more programs while committing deeply to fewer, forcing brands to rethink how loyalty is structured and delivered.
In this Q&A, Beth McCoy, CEO of CORA Loyalty, explains how brands can design programs that align with episodic behavior, recalibrate value without eroding trust, and move beyond one-size-fits-all rewards toward more flexible, modular loyalty models.
State of Customer Loyalty & Market Environment
Loyalty360: Looking back at 2025, which emerging consumer behaviours or market conditions have had the greatest influence on how loyalty strategies have been designed or evolved this year?
Beth McCoy: Research and surveys consistently point to fragmented or portfolio loyalty rather than a decline in interest in loyalty itself. Customers belong to more programs but actively engage with fewer, making faster and more situational decisions. Every program wants to be “the one,” but with so many choices, constant messaging, and the hangover from post-COVID shopping around in a high-inflation era, consumers have become loyal in shorter, more episodic bursts.
At the same time, modern loyalty technology makes it easier to run an always-on loyalty program while also adding short-term offers to spark engagement. This has pushed loyalty strategies away from exclusivity and toward winning specific moments, occasions, or categories of spend. Programs are increasingly designed to accept behavioural fluidity rather than fight it. Examples include short-run token-collection promotions layered onto always-on grocery loyalty programs, as well as “spend and get” offers used to move credit cards to top of wallet.
Loyalty360: Many marketers cite a “loyalty value compression” trend where customers expect more value while margins shrink. How are you helping companies navigate this tension?
Beth McCoy: Evidence suggests this is less about rising expectations and more about perceived value erosion. Customers anchor on historical value while brands optimize economics, creating psychological loss aversion. Successful programs address this by explicitly re-pricing expectations through clearer reward narratives, giving members choice in how they are rewarded, and using non-linear earn structures rather than simply adding more value. By contrast, unsuccessful programs often attempt to hide the value erosion inside complex new rules.
Loyalty Strategy & Program Design
Loyalty360: As more companies change the way they administer their existing loyalty programs, what signals would indicate to you that a loyalty program needs an overhaul rather than incremental change?
Beth McCoy: Beyond declining engagement and redemption, structural warning signs include an increasing reliance on blanket bonus campaigns, rewards liability growing faster than member value, and internal teams bypassing the loyalty program to run short-term promotions. To be clear, short-run promotions that fit cleanly into the overall loyalty architecture are healthy. The issue arises when marketing teams work around the program entirely, replacing core value with disconnected bonus mechanics that require highly bespoke rules, custom technology work, and heavy communications. These are signals that the program is no longer fit for purpose, rather than simply under-optimized.
Loyalty360: What strategic shifts differentiate brands that successfully modernize their loyalty models from those that struggle to evolve?
Beth McCoy: Successful brands decouple value creation from discounting, treat loyalty currency as infrastructure rather than the product itself, and design programs to support partner-funded value. Examples such as WestJet illustrate a shift from program-centric to ecosystem-centric loyalty, expanding choice and perceived value without a proportional increase in cost.
Differentiation, Value & Experience
Loyalty360: With so many programs offering similar reward constructs, what program elements are creating true differentiation?
Beth McCoy: According to our Harris Poll data, consumers still expect a baseline level of rewards in line with general market offerings, and it will be difficult for brands to meaningfully roll back from that expectation. True differentiation is therefore less about reward mechanics and more about how quickly a program can detect changes in customer behavior and respond, the level of redemption confidence it creates (i.e., trust that rewards can be redeemed at any time, at fair value), and the emotional signals it delivers such as recognition, progress, and clarity around status.
Academic research shows that emotional certainty and commitment - knowing where you stand and what you are working toward - are stronger predictors of long-term loyalty than rational value alone. As a result, successful programs avoid obfuscating rules, ensure earning is predictable so members trust rewards will hold value until redemption, consistently highlight progress, and create moments of surprise.
Data, AI & Personalization
Loyalty360: As AI continues to build momentum, what loyalty-specific AI use cases are moving from experimentation to standard operating practice?
Beth McCoy: It is now widely accepted that AI is embedded in loyalty platform development, ranging from rapid prototyping through to full code development. AI is also being applied across loyalty analytics, including predictive reward funding, next-best-action decisioning, and natural-language performance summaries for non-technical teams.
In customer service, AI is primarily augmenting human agents with faster access to member data rather than replacing them, improving both resolution quality and speed. As with AI more broadly, customer service use cases remain subject to hallucination risk, so care is still needed in how and where these tools are applied. AI is also increasingly used to personalize messaging across all marketing communications, with loyalty programs benefiting from, and aligning to, this broader trend.
Measurement & ROI
Loyalty360: Beyond traditional KPIs, what metrics are proving most predictive of long-term loyalty program health?
Beth McCoy: Beyond traditional KPIs, the strongest signals of long-term loyalty health are about the quality of value delivered and whether customer behaviour actually sticks, not just short-term campaign lift. These include incremental margin per member, reward efficiency (perceived versus delivered value), and the durability of behavior once incentives are removed.
Short-term tactics remain essential, but their success is best judged by whether they create repeat behavior without ongoing subsidy. Research increasingly shows that isolated uplift is a weak signal unless paired with measures of retention, habit formation, and learning velocity.
Loyalty360: As boards and CFOs demand clearer ROI, what evidence-based methods are being used to justify investment in loyalty modernization?
Beth McCoy: Stronger ROI cases rely on controlled holdout testing, tracking lifetime value movement rather than averages, and improved liability management through smarter earn and redemption timing. The conversation is increasingly shifting from individual program ROI to portfolio-level loyalty economics.
What’s Next
Loyalty360: What early signals suggest where loyalty is heading in the next 2–3 years, beyond personalization and gamification?
Beth McCoy: Early signals suggest loyalty is moving toward being embedded directly into payments and checkout experiences, with fewer points-first propositions and more unbundling of benefits. Independent analysts increasingly describe this as “modular loyalty,” where members define what loyalty means to them. At the same time, the pressure to fund rewards and ongoing value compression points to more partnerships, more enterprise-wide programs beyond just credit cards, and perhaps even a resurgence of coalitions or coalition-like programs.
Loyalty360: What advice would you give brands who feel their loyalty strategy is falling behind but aren’t sure where to begin in trying to improve their loyalty efforts?
Beth McCoy: Most brands need diagnosis before reinvention. The most effective starting points are auditing value leakage before adding new rewards, fixing redemption confidence before driving acquisition, and aligning loyalty economics with margin rather than growth. This reframes modernization as risk reduction rather than mere experimentation.