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Many brands rely on discounts as their go-to lever for driving sales and keeping customers engaged. But is this strategy really building loyalty or just teaching customers to wait for the next deal?
Richard Schenker, Founder & Chief Customer Engagement Officer for Loyal Strategy Consulting, put it plainly in our recent webinar:
“Discounts drive short-term sales. There’s no doubt about it—discounts may spike sales. But the growth is unsustainable. It disappears as soon as the discount ends.”
– Richard Schenker
There will always be a place in the marketer’s toolkit for discounts, but when they become the default, brands lose their ability to differentiate.
Emotional Loyalty: The Real Differentiator
Emotional loyalty is what keeps customers coming back, even when a competitor offers a better price. It’s the reason someone will recommend your brand, defend it online, or go out of their way to choose you over anyone else.
“Emotional loyalty is a deep personal attachment, or a bond that a customer feels towards a brand, a company, or a product. Unlike transactional loyalty, which is driven by discounts, emotional loyalty is rooted in feelings and experiences.”
– Richard Schenker
What does this look like in practice?
- Customers see themselves reflected in your brand’s story
- They feel part of a community
- They experience memorable moments—big or small—that make them feel valued
Building connections with customers drives measurable results. When you invest in experiences, recognize your members, and amplify shared values, you inspire customers to return, recommend, and advocate for your brand.
The Human Science that Fuels Emotional Loyalty
To build emotional loyalty, we need to understand what truly motivates people. Richard Schenker points us to a book written by Paul Lawrence and Nitin Nohria, two Harvard Business School Professors called: “Driven – How Human Nature Shapes Our Choices“.
“In order to get to a strong place of emotional loyalty, we need to unpack how customers actually think about brands.”
– Richard Schenker
The professors advocate that human beings have four biological drives and have coined the term the Four-Drive Model. They stipulate that all human behavior is motivated by these four drives:
- The Drive to Acquire: The desire to collect things—points, rewards, status.
- The Drive to Defend: The instinct to protect what we have—status, benefits, privileges.
- The Drive to Bond: The need to connect with like-minded people and belong.
- The Drive to Learn: The urge to grow personally, learn, and improve ourselves and our community.
“A well-designed loyalty program is one that appeals proportionally to both the members’ transactional and emotional human biological drives. We should not just be appealing to the drive to acquire or the drive to defend (which are more transactionally skewed). We should be appealing to all of those biological drives.”
– Richard Schenker
Here’s how you can put this into practice:
Audit your program
Map your business asset benefits, perks, or rewards to the four drives. Are your benefits equally spread across the four? Are there any gaps? Challenge yourself as to how you might deliver new and innovative emotional loyalty benefits, features and attributes that are distinct to your brand and difficult for competitors to replicate.
Learn from leading brands
- Community: Create spaces for members to connect
- Harley-Davidson builds loyalty with rides, in-store check ins, and events that create connections for members to bond.
- Learning: Offer tutorials, challenges, or exclusive content, education and inspiration
- Sephora Beauty Insider helps members grow with classes and recommendations and the ability to connect with other members in an immersive brand experience.
- Recognition: Celebrate milestones and achievements
- Nike Run Club highlights member progress and celebrates fitness accomplishments. The brand’s program provides motivation and inspiration to create self-betterment.
Start small, scale fast
Test new types of rewards to see what resonates with customers, keeping in mind opportunities to tailor offers to different segments. Continually seek out customer feedback and apply learnings to new campaigns.
Brands that move beyond discounts and invest in emotional loyalty build programs that stand the test of time. These programs foster resilience, differentiation, and sustainable growth—even as customer expectations and market conditions evolve.
Want to dive deeper into these strategies? Watch the full webinar recording here.
For more information on Richard Schenker’s loyalty strategy offerings, learn more here.
If you want to see how Annex Cloud can help your brand build emotional loyalty at scale, connect with our team today.
