Ninety Australian brand leaders gathered in Melbourne to challenge how the industry thinks about loyalty. The argument: most programs reward transactions, not attachment, and a better discount pulls those customers away. Real loyalty is preference you earn, not points you buy.
A discount that dresses up as loyalty is just a price cut you pay every month and call a strategy.
The Thoughtful Agency gathered 90 of Australia's brand founders, leaders and technology people in Melbourne last week to pull apart a word the industry overuses and underthinks. Loyalty. The event, Thoughtful Minds Melbourne, put the argument on the table that most loyalty programs are not loyalty at all. They are discounts with a membership card.
The distinction matters. A points scheme buys repeat transactions. It does not buy attachment. The moment a competitor offers a better discount, the "loyal" customer moves, because the relationship was transactional the whole time. Real loyalty is what keeps a customer when a rival is cheaper, and very few programs are built to create that.
The reframe is from rewarding transactions to earning preference. Preference comes from the experience, the product and the relationship, not the points balance. It is slower to build and far harder to copy, which is exactly why it is worth more. A gathering of this size, focused on one word, is a sign the industry knows the old playbook has run out of road.
Why it matters
Retention is the cheapest growth a business has, and most Australian businesses treat it as an afterthought behind acquisition. If your loyalty strategy is a discount by another name, you are training customers to expect a lower price, not to prefer you. That erodes margin and builds nothing durable. When money is tight, the businesses that keep customers on preference, not price, are the ones that hold their margin.
Australian brand leaders who gathered in Melbourne to challenge how the industry thinks about loyalty. Source: Campaign Brief.
The businesses winning retention are not the ones with the biggest points scheme. They are the ones customers actually want to come back to.
What to do about it
Loyalty is not a card in a wallet. It is a customer who would still choose you when someone else is cheaper. Build for that, and the retention follows.