How do your customers honestly feel about your brand? Are they just interested in discounts, or do they really believe your brand cares about what they think, buy, and experience when they shop with you? Are there strategic moves your company can make to create a stronger, more lasting relationship with both customer loyalty program members and non-members alike?
Mark Johnson, CEO of Loyalty360, spoke with Denise Holt, SVP and Head of Strategy, Experience & Research at Phaedon on ways to cultivate an emotional brand connection with today’s value-conscious consumers.
“Our core expertise really spans a full spectrum of loyalty strategy and execution,” Holt said. “We provide AI-driven insights from data that help brands understand and act on customer behavior in real time.”
Based on Phaedon’s proprietary research on emotional loyalty, the company has its pulse on the evolving dynamics of customer behavior and the factors that drive meaningful brand connections. These insights help illustrate how brands can move beyond transactional relationships to build true emotional resonance with their customers.
“What we've found is that while transactional loyalty—earn points, get rewards—has its place, it's simply not enough to create the kind of lasting bonds that withstand competitive pressures,” Holt said. “Emotional loyalty is what really separates customers who stick with you from those who chase the next deal.”
Six Key Drivers of Emotional Loyalty
An emotional customer connection, according to Phaedon’s analysis, creates a higher customer lifetime value, better retention rates, increases in spending, and customers who will advocate for your brand. “The beauty of emotional loyalty is it’s both aspirational and measurable,” Holt said.
To forge deeper connections beyond transactions, Phaedon’s research identifies six essential drivers of emotional loyalty—trust, reliability, appreciation, investment, empathy, and shared values—and emphasizes the importance of understanding their unique influence on customer relationships. “When brands activate these drivers effectively, they see measurable impact,” Holt said, “We help brands define what [emotional loyalty] means to their specific customer base, track against those emotional drivers, and continuously optimize to deepen those relationships over time.”
Holt explained how the various drivers work in tandem to build an emotional connection. In the area of trust and reliability, a Red Robin customer who couldn’t tolerate gluten is now a loyal patron of the restaurant because it adheres to strict allergy and intolerance practices and trains its employees to prepare for these instances on a regular basis. A Hampton Inn staff exemplifies empathy when, during a snowstorm, they arranged transportation to a local store for an out-of-town guest who forgot their phone charger. “It’s those smaller moments where we especially see emotional loyalty in action,” Holt said. "This helps to build deeper connection.”
The Path to Emotional Connections
What can brands do right now to activate these drivers and strengthen emotional connections with customers? “Black Friday and Cyber Monday feels like the most transactional moment of the year, but it's really a great opportunity to start building emotional loyalty,” Holt said. “Create a clear value hierarchy that makes your members feel genuinely special, like giving your members early access, 48 to 72 hours before the public, elevated points, or reserved inventory. But the key is to really go beyond discounts.”
Holt suggests offering an extended return window to make customers’ lives easier, virtual styling sessions, or member-only experiences they can share with family or friends. “The holiday season is about finding those special moments with those that you care about, and the more that brands can help enable those interactions, the better.”
Knowing your audience, understanding them, and then segmenting your deal seekers from relationship builders by using data is also key. “Deal seekers need to get a post-purchase communication that’s really celebrating their win,” Holt said. “Relationship builders should get content that deepens connections.” Ideas like offering customers style guides, product education, or community access are all ways to build relationships that extend past a sale.
“The magic really happens when you carry this into the first quarter of next year, and beyond,” Holt said. “Use this moment to launch an onboarding series for new members showing them the benefits that are to come for the year. Or offer non-members retroactive benefits for holiday extras they missed as long as they join the program. This transforms a one-time holiday shopper into an engaged long-term member, and that’s the real win.”
Emotional loyalty is a key differentiator for brands that want to maintain deeper connections and retain their best customers. According to Holt, a brand’s entire marketing strategy should be focused on building relationships instead of just one-offs.
“As we look to 2026, the market uncertainty that we've been navigating through is not going away and, if anything, brands are continuing to face pressure to do more with less. Marketing budgets are going to remain tight, and consumers are increasingly selective about where they spend their constricted discretionary income. In this environment, emotional loyalty isn't just nice to have, it’s a strategic imperative,” Holt said.
As brands compete for revenue, those companies that will survive and thrive, according to Holt, are the ones that are built on that genuine emotional connection and not just the lowest price or transactional incentives.
“Brands that invest in understanding and activating the emotional drivers create those durable bonds that withstand economic pressures and competitive threats,” Holt said.
Brands should determine where the company’s strength is and roadmap out areas to focus on during annual strategic planning. Holt reminds brands not to feel like you need to execute everything at once. Instead, start with a baseline understanding of where the company is strong and where it needs improvement, and then establish a plan for incremental changes that are aligned with higher level goals. “The differentiator in 2026 won’t be the brands with the best discount or the flashiest promotion,” Holt said. “It will be the brands who have built relationships strong enough that customers choose to stay, advocate, and spend, even when cheaper alternatives exist.”
According to Holt, relationships built solely on discounts are fragile, but those built on emotional loyalty are resilient. “Retaining your best customers isn’t optional, it’s critical.”
To read more from Loyalty360 and Phaedon, check out Executive Perspectives: The Power of Emotional Loyalty: How Brands Build Lasting Connections. And look for Phaedon’s new in-depth emotional loyalty research report coming in January.