How to Win Customer Loyalty in Unprecedented Times

Read the full article by Chris Cubba, Chief Revenue Officer at Snipp, as published on Total Retail

CPG brands are losing loyalty at a time when they need it most. In a new era marked by slow economic growth and rising prices, a recent survey of 400 U.S. consumers reveals how tightening budgets are reshaping brand loyalty. As loyalty frays, consumers are driven less by emotional brand attachment and more by value, price, discounts and flexibility.

Shoppers aren’t just tightening their wallets; they’re rethinking what loyalty really means. Loyalty isn’t dead, but traditional programs alone are no longer enough to keep shoppers engaged.

CPGs Can’t Rely on Loyalty Alone

Historically, in times of economic uncertainty and inflation, CPG brands could rely on their loyal customers. Loyal consumers are typically less price sensitive than others, meaning they're likely to stick with a brand even if prices increase. However, things are looking a little different in the current economy. Survey data showed 61.25 percent of shoppers said they are only somewhat likely to stick with their favorite brands if prices increase.

The Perfect Storm

Why are consumers shopping differently now? Jamie Dimon, CEO of JPMorgan, recently defined this economic era as a time of stagflation, where stagnant growth meets high inflation. This rare and complex form of economic uncertainty is a double hit to households, as consumers face shrinking job opportunities and rising prices simultaneously. This, in turn, leads to tightening household budgets and shifting spending priorities.

The uncertainty of tariffs and how they will impact the price of imported goods only adds fuel to the fire. As a result, 63.25 percent of respondents admit their brand preferences have somewhat changed in the past six months due to economic pressures. Today, we're seeing it takes a lot less for consumers to switch brands, with 68.25 percent of consumers saying continued price hikes would cause them to stop buying from brands they’ve used for a long time.

The New Age of Loyalty

Today, consumers are more flexible, strategic and brand-agnostic than ever before. They’re less likely to be swayed by branding, and more likely to be influenced by price and promotional value. However, loyalty isn’t dead; it’s evolving. Brands that adapt to consumer priorities can still win over customers who are looking for more than familiarity.

Successful loyalty strategies in 2025 will lean heavily on immediate, tangible value:

1. Update Loyalty Programs: Consumers want meaningful rewards from their favorite brands; however, many loyalty programs are dated and don’t offer real value. Consumers want more than just points to feel recognized and appreciated for their purchases. For example, surprise-and-delight rewards, like unexpected gifts and special recognition, deliver exceptionally higher value than basic points.
2. Spend Money, Get Money: Consumers value tangible financial benefits, especially in times of economic uncertainty. They want to feel like their hard-earned money is going toward something, rather than just lining the pockets of large corporations. To build loyalty, brands should offer cash-back rewards and cash giveaways rather than standard points or perks. A significant 85.75 percent of consumers say cashback or discounts would keep them coming back.
3. Freebies: Reward frequent purchases with free items or offer the chance to try new products for free. Paying a little more for a product isn’t as bad when there are additional perks included. Free products drive engagement and conversions; studies show freebies can increase purchase intent by 20 percent to 30 percent.
4. Personalization and Recognition: Shoppers are choosing a good deal over tailored messages; however, 26 percent still expect some level of personalization. Tailored experiences build connections. To strike a balance between deals and personalization, brands should offer personalized discounts based on past purchases, benchmarks or milestones.

The Future of Loyalty is Practical, Not Emotional

Brands can do everything in their power to keep prices down, but often price increases are inevitable. The best approach is transparency; brands should be transparent if and why prices increase. When brands are perceived as genuine, loyalty typically increases.

In 2025, loyalty isn’t earned through tradition or emotion. It’s earned transaction by transaction. Brands that win will be those that see loyalty not as a program, but as a value exchange.