The anatomy of Loyalty – How to increase customer value through loyalty programs?

At Balkan eCommerce Summit 2026, Virág Kiss delivered an insightful presentation exploring how loyalty programs are evolving from simple discount mechanisms into strategic business infrastructure designed to drive long-term customer value, retention, and profitability.

Drawing from extensive research conducted by PwC Hungary, including analysis across multiple industries and consumer studies involving more than 3,000 respondents, the session examined:

• What loyalty actually means today
• Why traditional loyalty approaches are becoming outdated
• How customer behavior is changing
• Why personalization and simplicity are critical
• How brands can build stronger long-term customer relationships

The presentation introduced loyalty not as a standalone marketing initiative, but as a complex system made up of interconnected elements – much like the anatomy of a human body.

Loyalty Is No Longer Just a Marketing Tool

Virág opened the session by explaining that one of the biggest misconceptions companies still have is treating loyalty programs purely as:

• Discount mechanisms
• Promotional campaigns
• Point collection systems

However, based on PwC’s research, modern loyalty programs have evolved into much more than that.

Today, loyalty functions as:

• Business logic
• Customer infrastructure
• A profitability engine
• A retention strategy
• A customer intelligence system

Rather than simply rewarding purchases, loyalty programs increasingly help businesses:

• Understand customer behavior
• Segment customer value
• Improve retention
• Drive personalization
• Increase customer lifetime value

The presentation emphasized that loyalty is no longer only a marketing discussion – it is now a strategic business topic.

The “Anatomy” of Loyalty

To better explain how loyalty programs function, Virág introduced the concept behind PwC’s report:
“The Anatomy of Loyalty.”

The framework breaks loyalty programs into different “body systems,” each representing a critical operational or strategic layer.

The Skeleton: Program Logic & Business Foundations

According to the research, the strongest structural element of any loyalty program is its underlying logic.

The presentation emphasized that:

• unclear program mechanics,
• weak value propositions,
• and disconnected systems

often undermine customer engagement before programs can create meaningful loyalty.

Strong loyalty programs are built around:

• clear objectives,
• measurable business value,
• and integrated operational systems.

This is especially important for omnichannel businesses.

Virág explained that modern customers no longer think in terms of:

• online shopping
  or
• offline shopping.

Instead, customers move fluidly between channels depending on their life situations.

As a result, businesses must unify customer data and experiences across:

• physical stores,
• eCommerce,
• apps,
• CRM systems,
• and loyalty platforms.

Without connected systems, companies struggle to understand the full customer journey.

Loyalty Requires Organizational Ownership

One of the major operational challenges highlighted during the session was the lack of dedicated ownership inside many organizations.

Because loyalty intersects with:

• marketing,
• digital,
• CRM,
• customer experience,
• and analytics,

responsibility is often fragmented across departments.

Virág described loyalty as a domain that frequently “falls between chairs.”

This lack of centralized ownership often results in:

• inconsistent execution,
• disconnected customer experiences,
• weak personalization,
• and underperforming loyalty programs.

The presentation emphasized that loyalty must become an integrated strategic function rather than a side project shared between teams.

Simplicity Is the Most Important Factor

One of the clearest findings from PwC’s research was that simplicity remains the single most important factor customers value in loyalty programs.

Customers quickly disengage when:

• rules become complicated,
• rewards are unclear,
• onboarding feels confusing,
• or value is difficult to understand.

This is especially true for younger consumers.

According to the presentation, Generation Z customers are among the most active users of loyalty programs – but they also show some of the highest dropout rates.

Gen Z consumers:

• expect intuitive experiences,
• dislike friction,
• and abandon programs quickly when value is unclear.

As a result, onboarding becomes critically important.

Customers need to understand immediately:

• what the program offers,
• how it works,
• and why it benefits them.

Without fast perceived value, engagement drops rapidly.

Loyalty Programs Behave Differently Across Industries

PwC analyzed:

• 51 loyalty programs
• across 11 industries

and discovered that loyalty behaves very differently depending on:

• purchase frequency,
• customer expectations,
• and category behavior.

The session grouped industries into four major loyalty categories.

Everyday Purchases

Examples:

• Grocery retail
• Frequent shopping categories

These industries rely heavily on:

• habit,
• convenience,
• and recurring interaction.

Loyalty penetration tends to be highest in these categories because customers purchase frequently and can easily perceive value accumulation.

Occasional Purchases

Examples:

• Fashion
• Lifestyle products
• Certain retail categories

Here, loyalty depends more on:

• perceived value,
• emotional connection,
• and experience.

Service-Based Industries

Examples:

• Hospitality
• Subscription services

Loyalty is influenced more strongly by:

• customer experience,
• context,
• and relationship quality.

Banking & Telecom

Examples:

• Financial institutions
• Telecom operators

In these sectors, loyalty often depends less on formal loyalty programs and more on:

• trust,
• reliability,
• and long-term stability.

Customers may remain loyal even without active reward structures simply because switching costs or trust factors are stronger.

Customers Come for Discounts – But Stay for Experience

One of the strongest messages from the presentation focused on the difference between:

• transactional loyalty
  and
• emotional loyalty.

Virág explained this through a memorable analogy:

“Customers come for the meat, but they stay for the gravy.”

Discounts and promotions remain important.
Customers still expect:

• rewards,
• points,
• savings,
• and tangible value.

However, discounts alone are no longer enough to create sustainable loyalty.

Long-term retention increasingly depends on:

• customer experience,
• personalization,
• emotional connection,
• and ease of interaction.

The presentation reinforced that experience is becoming the true differentiator between loyalty programs.

Personalization Is No Longer Optional

PwC’s research identified six different loyalty customer segments, each with:

• different motivations,
• behaviors,
• and expectations.

This makes personalization essential.

Modern loyalty systems should increasingly adapt to:

• customer value,
• shopping behavior,
• purchase frequency,
• and engagement patterns.

Many companies now possess sufficient data to calculate:

• Customer Lifetime Value (CLV)

allowing them to differentiate customer treatment based on long-term business impact.

The session emphasized that treating every customer identically is becoming increasingly ineffective in modern loyalty strategies.

Loyalty Saturation & Program Fatigue

Another important insight from the research was that consumers participate in:

• approximately six loyalty programs on average.

This appears to represent a natural cognitive limit.

Beyond that point:

• customers become overwhelmed,
• engagement decreases,
• and attention fragments.

Virág also introduced PwC’s “Loyalty Index,” which measured active engagement levels.

In Hungary, the loyalty index currently stands at:

• approximately 51%

This suggests that while consumers join many programs, they only actively engage with those delivering:

• clear value,
• convenience,
• and positive experiences.

This creates a major opportunity for brands capable of activating dormant users more effectively.

The “Pathogens” Weakening Loyalty Programs

One of the most practical sections of the session focused on the common problems damaging loyalty program performance.

PwC identified several major “pathogens” that weaken loyalty ecosystems:

• Overly complex mechanics
• Poor UX/UI
• Lack of ownership across teams
• Weak personalization
• Promotional overload
• Low perceived reward value
• Vanity KPIs
• Excessive dependence on expensive software solutions
• Data overload without actionable interpretation
• Poor customer service quality

The presentation emphasized that technology alone cannot create loyalty if the customer experience itself remains frustrating or inconsistent.

Loyalty Is Built Through Daily Value Creation

The session concluded with a simple but powerful idea:
loyalty is not built through massive systems or expensive tools alone.

Instead, loyalty grows through:

• consistent daily value creation,
• friction reduction,
• customer understanding,
• and personalized experiences.

Virág encouraged businesses to ask themselves every day:

• What did we make simpler for customers today?
• What value did we create?
• How did we personalize the experience?

The presentation returned to the “apple” analogy introduced at the beginning:
small, consistent actions create long-term health – both for people and for customer relationships.

As Virág summarized:
“Loyalty is like apples. One apple a day keeps the doctor away.”

Key Takeaways from the Session

The presentation delivered several highly actionable insights for businesses building loyalty strategies:

• Loyalty is now a strategic business function, not just a marketing tool
• Simplicity is the most important factor in program engagement
• Customers increasingly expect personalized experiences
• Omnichannel integration is essential for modern loyalty ecosystems
• Discounts attract customers, but experiences retain them
• Different industries require different loyalty mechanics
• Loyalty programs fail when they become overly complex or disconnected
• Consistent daily value creation drives long-term retention

Perhaps the strongest message from the session was that successful loyalty programs are not built around rewards alone – they are built around understanding customers and continuously making their lives easier.