Loyalty Programs Are Losing Relevance as Customers Demand More Than Points, Warns Info-Tech Research Group

Customer expectations are shifting, and engagement with traditional loyalty programs continues to decline. Many organizations still struggle to align loyalty initiatives with measurable business outcomes. According to new insights from Info-Tech Research Group, fragmented ownership, siloed data, and unclear ROI are limiting loyalty performance. The firm's newly published blueprint, Modernize Your Loyalty Program Through a Digital Strategy, provides a structured approach to help CIOs align loyalty strategy, technology, and data to deliver relevant, scalable customer experiences.

Arlington, Va., Feb. 4, 2026 /PRNewswire/ - Loyalty programs are no longer failing because they lack features, but because they no longer feel valuable. As consumers become more selective about where they spend, many organizations are discovering that traditional points-based models do not generate sustained engagement, measurable growth, or differentiated customer experiences. A new blueprint from Info-Tech Research Group, Modernize Your Loyalty Program Through a Digital Strategy, details a structured approach for CIOs and business leaders to modernize loyalty programs by coordinating business priorities with the technology and data required to support them.

Engagement gaps are widening across traditional loyalty programs as consumers pull away from offerings that feel generic or irrelevant. Findings cited in Info-Tech's blueprint indicate that participation remains inconsistent and that perceived irrelevance is a growing driver of brand abandonment. Taken together, these dynamics are forcing organizations to rethink loyalty through experience-driven value and stronger brand connection, particularly among younger generations.

"Loyalty modernization requires more than a platform upgrade. It requires cross-functional alignment on what loyalty is meant to achieve and how the organization will measure it," says Donnafay MacDonald, research director at Info-Tech Research Group. "CIOs sit at the intersection of data, systems, and the places where customers actually interact with the business. When IT and the business co-own the loyalty journey, technology becomes a driver of outcomes, and organizations can move from isolated initiatives to a scalable loyalty ecosystem that customers actually value."

Loyalty Modernization is Increasingly a CIO Problem

As loyalty programs become more data-driven, personalized, and integrated across digital and physical channels, responsibility for their success is increasingly shifting to IT leadership. CIOs are often asked to enable advanced loyalty capabilities while navigating fragmented ownership, legacy infrastructure, and unclear success metrics. Without shared accountability and alignment across business and technology teams, loyalty initiatives frequently stall before delivering measurable value.

Info-Tech's blueprint identifies four core challenges that commonly stall loyalty modernization efforts:

• Lack of alignment: Business goals for growth, retention, and personalization are often unclear or inconsistent, leaving IT without a stable definition of success.
• Fragmented ROI: Loyalty impact is hard to isolate across departments, making it difficult to defend investment decisions or prioritize improvements.
• Integration complexity: Advanced loyalty programs depend on integrated customer data across POS, e-commerce, CRM, and marketing systems, yet legacy infrastructure often limits agility and interoperability.
• Balancing personalization with privacy: Loyalty programs require sensitive customer data, which raises governance and compliance requirements as privacy expectations and regulations evolve.

Info-Tech's Framework to Modernize Loyalty Through Digital Strategy

To address these challenges, Info-Tech's Modernize Your Loyalty Program Through a Digital Strategy blueprint outlines a decision-oriented framework that helps CIOs and business leaders align priorities, clarify ownership, and translate loyalty ambitions into execution through the following three-phase methodology.

Discover and Align: CIOs and business leaders work together to define loyalty goals, surface key pain points, validate customer personas, and map current-state journeys. This phase establishes a shared understanding of what success looks like and where friction exists across systems, teams, and customer touchpoints.

Evaluate and Prioritize: Cross-functional teams assess emerging loyalty trends and digital opportunities, identify initiatives with the greatest potential impact, and prioritize them based on feasibility, effort, and expected outcomes. IT leaders play a central role in evaluating data readiness, integration complexity, and delivery constraints.

Transform and Commit: IT and business owners break prioritized opportunities into executable initiatives, align on ownership and success metrics, and build a phased roadmap that balances quick wins with longer-term transformation. This phase focuses on moving from planning to delivery with clear accountability and timelines.

The blueprint emphasizes that modern loyalty programs are increasingly defined by expectations for relevance, recognition, and personalization. As consumers enroll in more programs but engage with fewer of them, organizations must move beyond transactional incentives and toward experiences and value exchanges that feel intentional and meaningful.

Info-Tech's resource also highlights how leading brands are embedding loyalty throughout the full customer experience by integrating data across channels and leveraging digital capabilities to deliver value that customers recognize immediately. These approaches help organizations strengthen engagement, improve retention, and more directly link loyalty investments to business outcomes.

For exclusive and timely commentary from Info-Tech's experts, including Donnafay MacDonald, and full access to the Modernize Your Loyalty Program Through a Digital Strategy blueprint, please contact [email protected].

About Info-Tech Research Group 

Info-Tech Research Group is one of the world's leading and fastest-growing research and advisory firms, serving over 30,000 IT, HR, and marketing professionals around the globe. As a trusted product and service leader, the company delivers unbiased, highly relevant research and industry-leading advisory support to help leaders make strategic, timely, and well-informed decisions. For nearly 30 years, Info-Tech has partnered closely with teams to provide everything they need, from actionable tools to expert guidance, ensuring they deliver measurable results for their organizations.

To learn more about Info-Tech's HR research and advisory services, visit McLean & Company, and for data-driven software buying insights and vendor evaluations, visit the firm's SoftwareReviews platform.

Media professionals can register for unrestricted access to research across IT, HR, and software, and hundreds of industry analysts through the firm's Media Insiders program. To gain access, contact [email protected].  

For information about Info-Tech Research Group or to access the latest research, visit infotech.com and connect via LinkedIn and X.

SOURCE Info-Tech Research Group