46% of execs predict their loyalty program will be irrelevant within three years
While nine out of 10 executives say customer loyalty has grown over the past few years, only four out of 10 consumers say the same, according to research published by PwC.
The consulting firm posed questions and gathered responses from more than 5,500 consumers and 400 executives in the United States this past spring to produce its 2025 Customer Experience Survey.
Overall, PwC’s study showed 70 per cent of executives think customer expectations are outpacing their ability to keep up. And don’t count on artificial intelligence (AI) to close the gap: PwC found only 58 per cent of consumers are comfortable with the technology, and 49 per cent cited low-level interactions like tracking their orders as their preferred use case.
Loyalty programs are designed to build a better relationship with customers, but 57 per cent of execs admitted their programs aren’t delivering the expected results. Meanwhile, 52 per cent of consumers said they stopped using a brand because of its poor quality products and services, and 29 per cent cited the overall negative experience they’d had.
“Many loyalty programs are designed for signals customers don’t reliably send,” the report’s authors wrote. “Compared to consumers, execs overestimate such things as customer feedback, brand communications and social media engagement in customers’ brand loyalty. Then companies wonder why perks underperform.”
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Despite the comment above, PwC’s research found consumers and brand fairly aligned on a key definition of loyalty: half of execs said it means consistently choosing a brand over its competitors, and 41 per cent of consumers agreed.
To boost loyalty, PwC found some of the areas customer experience (CX) leaders have been focused might be on the money: 68 per cent of consumers said exclusive rewards could make them loyal, followed by 59 per cent who cited personalized experiences or offers.
The better way to explore this data might be to use PwC’s metaphor of an “experience supply chain.” This is a helpful approach to not only recognizing all the interconnected parts that make up positive CX, but the fact that some parts may be provided or delivered by partners rather than the brand itself.
While we think of the customer journey as a fairly linear progression, PwC found the “discovery” phase of researching products and services is a key influence of purchase decision, as are steps typically bucketed into “consideration” like comparing prices.
PwC recommends brands think more like a behavorial scientist than a marketer when analyzing customer journeys. It’s not bad advice, though most brands lack the skill set necessary to do this (even though they often act like they’re doing it). It could get easier as more of the customer journey is digitized and automated, though it’s worth pointing out that physical experiences like in-store visits remain pivotal in turning prospects into customers.
This ungated research is coupled with actionable advice throughout, and contains some helpful deep-dives into sectors like health care that could assist CX leaders with applying it to their particular organization and context.
