Marketers love to talk about “brand love”. Customers tell a different story: they stay where they are seen and valued as more than a wallet. Loyalty can’t be bought with discounts; it grows out of how a brand is built. Let’s look at what the research says, one expensive mistake by a well-known retailer, a simple experiment at a car wash, and why a single bad experience can wipe out years of goodwill.
What customers themselves say
In its overview of 2026 consumer trends, the agency Razorfish puts it like this: marketers often name “brand love” as the reason for loyalty, but consumers keep pointing to experiences that make them feel “seen, included, and valued beyond the transaction”. On top of that: exclusivity, early access and VIP treatment are now stronger drivers of loyalty than discounts and points (Razorfish).
The agency 5W’s report “The Loyalty Premium 2026” contains a figure that is easy to remember: customers who are emotionally connected to a brand bring up to 306% higher lifetime value than those who are merely satisfied (5W). An honest caveat: it is a synthesis of other people’s studies, and the report doesn’t name the original source of the number. Treat it as a guide, not a law. The conclusion doesn’t change: satisfaction isn’t enough; you need people to feel they’re not “just another transaction” to the brand.
How a brand is really built
A brand is not a logo or a pretty colour palette. Marty Neumeier, author of “The Brand Gap”, defines a brand as a person’s gut feeling about a product, a service or a company. In other words, the brand lives in your customer’s head, not in your brand book. You don’t “make” it on your own; you create the conditions under which it forms in people’s minds the way you want it to.
The brand researcher Kevin Lane Keller describes this process as a pyramid with four steps (his model is known as “brand resonance”):
- Salience. People notice you and think of you when a need arises. Your name, your look and a consistent presence do the work here.
- Meaning. People understand what you do, who it’s for and what you’re like: what level of quality, what mood, what character.
- Response. What customers think about you (whether you’re reliable, whether choosing you is worth it) and what they feel around you.
- Relationship. The top of the pyramid: attachment, willingness to come back, a sense of community.
Look at where discounts sit in this pyramid. They work mostly on the third step, at the level of “is it worth it or not?”. Loyalty lives on the fourth. So however far you cut your prices, you won’t build a relationship with them. Relationships are built by repeated experiences, consistency, and what customers feel every time they deal with you.
The story that cost billions: JCPenney without discounts
In early 2012, JCPenney’s new CEO Ron Johnson, who had previously built the Apple Stores, decided to put an end to “fake prices”: abolish coupons and constant sales and replace them with honest everyday prices. It sounds logical. In practice, as Chief Executive describes it, JCPenney’s shoppers mostly loved the hunt for deals and felt they were no longer the target audience. Sales fell from roughly $17.5 billion to $13 billion, Johnson admitted the mistake, brought back sales and coupons, and was let go 17 months after he was hired.
The reasons for the failure were many, and not everything comes down to discounts. But the story shows the essential point: when discounts shape a habit over years, customers come not for the brand but for the discount. A sale doesn’t build loyalty. It teaches people to wait for the next sale.
The car wash experiment that changed loyalty programmes
In 2006, the marketing researchers Joseph Nunes and Xavier Drèze described the “endowed progress effect”. They handed out 300 loyalty cards at a car wash. Half of the cards had eight empty spaces: collect eight stamps and get a free wash. The other half had ten spaces, two of which were already stamped. The condition was the same: eight paid washes. After nine months, 34% of those who started with a “head start” redeemed the reward, compared with 19% of those who started from zero (Journal of Consumer Research; as reported by Wharton).
Nothing changed except the feeling: “I’m already on my way.” Someone who has been given a head start doesn’t want to lose it. The authors also noticed that the effect is stronger when there is a reason for the “gifted” progress, for example “thank you for being with us”. So a small gesture that costs you almost nothing works better than a discount, because it says: “we’re already on your side.”
Loyalty is fragile
There is a flip side. According to a frequently cited PwC survey, about 32% of customers stop buying from a brand they love after a single bad experience (PwC). Other surveys give other numbers: depending on how the question is phrased, the share ranges from about a fifth to more than half. So take 32% as a guide, not an exact law.
The conclusion is the same either way: one botched conversation, one forgotten email, one curt tone can wipe out years of goodwill. A brand is built slowly and destroyed quickly. That’s why how you react when something goes wrong matters at least as much as how you work when everything goes well.
The café where they remember me
I’ve experienced this myself, as a customer, not as a consultant. I go to a café where they know me by name and, without any explanation, remember which coffee I like. They remember that I had an important event at work yesterday and genuinely ask how it went. That’s not a discount or a stamp card. I pay there exactly what I’d pay anywhere else, but I don’t go anywhere else. That’s the “relationship”, the top of the pyramid.
In a smaller town like Landshut, this works even more strongly: people run into each other on the street, at the market, through mutual acquaintances, and reputation travels by word of mouth faster than any advertising. For local small businesses, every customer contact is part of the brand. That’s why marketing for local businesses doesn’t begin with advertising, but with a question: what does your customer feel when they deal with you?
What a small business can take from this
- Give your regulars early access. The first free slot in your calendar, a novelty a day before the announcement. It feels like belonging to a smaller circle.
- Give a head start, with a reason. Not “10% off”, but “we’ve already ticked off your first step, thank you for being with us”. The reason strengthens the effect.
- Remember. It’s the cheapest gesture. The name, the usual choice, what was going on for them yesterday. A short message that shows you remember the last conversation costs nothing and stays in people’s memory for a long time.
- Share information first with the people who have been with you longest. Whatever will become public later.
- Watch the moments when something goes wrong. Quickly, sincerely, humanly. Often it’s one bad experience, not ten good ones, that decides whether someone stays.
- Measure return, not just reach. Razorfish advises counting retention and advocacy rather than a campaign’s reach. How many customers came back a second time?
That doesn’t mean discounts are always bad. It means they can’t buy what creates attachment: the feeling of being seen.
Your next step
Want to know where there is still room in your offer for that feeling instead of the next discount? Book a 20-minute audit and we’ll find the first step together.
Sources: Razorfish, “5 Consumer Trends Rewriting the Brand Playbook in 2026”; 5W Public Relations, “The Loyalty Premium 2026” (May 2026); Chief Executive, “5 Critical Errors That Triggered Ron Johnson’s Removal at JC Penney” (April 2013); Nunes, J. C., Drèze, X. (2006), “The Endowed Progress Effect: How Artificial Advancement Increases Effort”, Journal of Consumer Research; Wharton Knowledge; PwC, customer experience survey; Neumeier, M., “The Brand Gap”; Keller, K. L., Customer-Based Brand Equity model (“brand resonance”).