Loyalty didn't disappear. Brands traded it away. | MarTech

"Dashboards filled with activity metrics - enrollments, redemptions, clicks, opens, streaks - all signaling momentum. What they didn't show was whether any of it actually produced incremental, durable value. In many organizations, the hunt for loyalty became performance art. The underlying assumption was simple: if customers are engaged, they must be loyal. But engagement is not loyalty. It's behavior - often rented, sometimes subsidized and frequently reversible the moment incentives disappear."

"From a measurement standpoint, this was the original sin. Loyalty programs were rarely designed around causal impact and were never built to answer complex questions like: Would this customer have stayed anyway? Did this reward change long-term behavior or accelerate a purchase? What happened to margin-adjusted lifetime value? Instead, brands optimized for what was easiest to observe and not what mattered economically."

"That framing is convenient and mostly wrong. Loyalty didn't disappear. Brands diluted it - slowly, deliberately and often unintentionally - by substituting gimmicks for value and mistaking engagement for commitment. That's why Volute Group's prediction that 2026 will be the year loyalty becomes a competitive advantage again feels less like a forecast and more like an inevitability. The market is forcing corrections."

Loyalty remains a recoverable competitive advantage after brands eroded it through gimmicks, perpetual promotions, and confusing engagement with commitment. Programs emphasized visible activity metrics—enrollments, redemptions, clicks—rather than measuring causal impact on durable customer value. Many initiatives delivered rented behavior that dissolved when incentives stopped, while organizations failed to ask whether rewards changed long-term behavior or improved margin-adjusted lifetime value. The result was inflated point issuance and economics that did not justify the tactics. Market pressures and shifting economics are forcing brands to refocus on causal measurement, durable retention, and loyalty strategies that generate real economic value.

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