The uncomfortable truth: One loyalty program we came across was costing over 500K a year… rewarding customers for behaviour that would have happened anyway.

We recently looked at a fast food brand’s loyalty setup.

On paper, it looked solid: Tiers, points, rewards. Still, it wasn’t delivering for the business.

During the kick-off meeting, the Head of Digital said: “We keep investing 500K per year in it, but we have no idea what it is actually delivering.”

Our investigation found that customers didn’t understand their points. Movement through the program was limited. The people reaching higher tiers were often not the ones the business wanted to influence. Some were already frequent buyers; others only used discounts.

The program kept running while the margin leaked away.

We see this pattern often. A program launches because it feels necessary, then the focus shifts to mechanics: Points. Rewards. Tiers.

More gets added over time, but one question stays unanswered: Which customer behavior are we trying to create?

Without that clarity, a loyalty program rewards existing behavior instead of driving new value. In this case, we shifted to a few simple principles:

• Make the desired behavior explicit. Not “engagement,” but a concrete second purchase within 30 days.
• Reward early behavior. Give people a reason to step in, not just to stay.
• Keep it simple. If customers need to think, they won’t act.

Within 3 months, repeat purchases increased by 15%. Activation of new members reached 60%, and discount dependency dropped by 12%. New groups became commercially more valuable.

A lot of loyalty programs are active. Just a few actually make an impact on bottom line growth.