What we cover
Nearly every retailer in every category has their own loyalty program. And if you ask one how it’s performing, they’ll probably give it high marks. Membership is growing. The design looks great.
And yet, the bottom-line impact isn't usually where they need it to be. Visits don’t climb the way they should, based on the time and money invested in the program. Spend per customer barely budges.
Consumers are more enthusiastic about loyalty than ever — 86% say rewards are important to them. But enthusiasm and action aren't the same. The average loyalty member now holds memberships in three or four competing programs within the same retail category, a number that has surged over the past two years. In grocery, competing membership is up 47% since 2023. In fuel, it's up 26%.
When every retailer offers a comparable loyalty program, none truly differentiates. Enrollment keeps climbing, but the behavior that actually drives profit — incremental visits, increased spend, genuine commitment — holds steady.
This is the loyalty plateau.
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What is the loyalty plateau, and why are most retailers in it?
The loyalty plateau refers to the stage of program maturity where sign-ups increase, but the bottom-line impact is weaker than expected. It's the result of two factors colliding: undifferentiated programs and an oversaturated market.
Our latest report, Escaping the loyalty plateau, is based on survey responses from more than 12,000 consumers and retailers. It introduces a four-stage framework for measuring loyalty program maturity, from the first movers who captured early advantage to the gold standard of everyday value that defines category leaders. Understanding which stage you're in is the first step toward addressing the loyalty plateau in which many programs stagnate.
The report also establishes a proprietary loyalty influence score that measures whether a consumer actually changes their behavior in response to a program. Across all three retail categories we examined, programs graded out moderately impactful, at best. Perhaps the sharpest finding of all: across every category, the behavior that programs influence least is increased spending.
What you’ll find in this report
- A framework for the four stages of loyalty maturity. From AAdvantage to Amazon Prime, we trace how loyalty programs evolve and where most programs stall. The framework provides an honest benchmark for assessing where your program stands.
- A proprietary loyalty influence score. We built a score that measures whether consumers actually change their behavior in response to a loyalty program — what it moves and what it doesn’t. The results reveal the gap between what retailers expect from loyalty and what they’re actually getting.
- Four consumer profiles — and what they mean for your program. Not all of your members are equally movable. We segment consumers based on brand affinity and price sensitivity to reveal who is most likely to join your program, who is most likely to be influenced by it, and why those two groups aren’t always the same.
- A clear path forward. We outline what it takes to break out of the loyalty plateau and reach differentiated value. Retailers who combine loyalty with an external marketplace cut month-one consumer churn by more than 30 percentage points.
Loyalty was built to reward devotion. But in today’s market, devotion isn’t a foregone conclusion. It comes from having the right program, offered to the right consumers, in the right way. The retailers who understand that are the ones pulling ahead.
Read Upside’s newest report, Escaping the loyalty plateau, to learn how to be one of them.
