Reimagining loyalty programs in the age of MarTech
have come a long way from the traditional 'earn and burn' model, where customers were rewarded with points for repeat purchases and could redeem them for discounts or freebies. While the purpose was to drive repeat engagement, this transactional approach is no longer enough. In today's experience-first economy, fuelled by data and modern
marketing technology
, loyalty has evolved into a powerful engine for emotional connection, personalisation and lifestyle relevance. From copper tokens in the 18th century to frequent flyer miles in the 1980s, loyalty initiatives have always sought to keep customers connected but expectations have dramatically shifted.
The first loyalty programs was introduced in 1981 when American Airlines launched the AAdvantage programs. Customers could earn points based on miles flown, redeemable for flights. The model, simple, transactional, and effective, became the industry benchmark. Over time, brands across sectors embraced the idea, points for purchase, redeemed for discounts or freebies. It worked, but only to a point.
In the age of instant gratification, loyalty has moved far beyond ledger-based rewards. Amazon Prime is a case in point. What began as a shipping benefit evolved into a multifaceted loyalty ecosystem, offering streaming content, exclusive deals, and next-day delivery. It didn't just retain customers, it redefined what they could expect from loyalty programs.
A LinkedIn post from a colleague captured consumer expectations from loyalty programs today:
'If I can pay for nine cups of coffee at a café, I can very well pay for the tenth too. The moment a brand assumes I'm buying nine cups just to get the tenth free is the moment the loyalty starts to lose meaning. Instead, charge me for the tenth, but give me an experience that breaks the routine.'
'Airlines, credit cards, and hotels often get this right. I book economy tickets to my hometown and travel five times a year. There's no chance I'll pay for premium economy or business class. But when you upgrade me, or better yet, let me gift an upgrade to my parents, that's when you truly delight me.'
Consumers no longer perceive value the way they once did. Tangible freebies and discounts are losing their charm, while intangible experiences, those that resonate personally or emotionally, carry far greater meaning. Loyalty today is less about monetary savings and more about creating memorable moments that align with a consumer's lifestyle, values, and aspirations.
'Loyalty tech has evolved from being siloed and transactional to platforms that understand people,' said Dilpreet Singh, head of loyalty, CRM and partnerships at
ITC Hotels
. 'It's no longer about tracking spend. It's about anticipating needs, interpreting intent and building meaningful, long-term relationships.'
He pointed out that the
martech stack
was once fragmented, with limited data consolidation, often relying on basic POS (point of sale) integrations and CRM (
customer relationship management
) systems that tracked history but didn't predict behaviour. 'Personalisation, if any, was rule-based and one-size-fits-all, leading to low engagement and higher point liability,' he said.
'Today's
martech
stack helps brands listen at scale, unifying data to create genuinely personal experiences. It's no longer about rewarding purchases, but about showing customers they're truly seen,' he explained.
KPMG's report 'The Evolution of Loyalty programs' reflected this shift. The study highlighted how customers now seek recognition over rewards and prefer programs that deliver consistent value across experiences. Emotional connection, flexibility, and omnichannel accessibility are fast becoming key performance indicators of successful loyalty frameworks.
India's loyalty programs are following suit with rapid innovation.
Marriott Bonvoy
, one of the country's leading loyalty platforms in hospitality, boasted over 1.3 million members in India alone, part of a global membership base of 228 million. The program's emphasis is on 'moments money can't buy', like exclusive access to celebrity chefs, IPL experiences, and front-row music events.
'If you can drive both perceived and tangible value aligned with what the consumer wants, that's your competitive edge,' said Khushnooma Kapadia, VP marketing at Marriott International India. 'We're not just about stay benefits, we offer curated experiences across entertainment, sports, and music.'
She added that loyalty now played a year-round strategic role, powered by an evolved tech backbone that integrated web, app, WhatsApp, and even co-branded credit cards. 'The rise in digital tech has played a significant role in boosting loyalty programs as well as giving us the tech capability to make sure that everything is a click away. Everything is seamless and very available to the consumer.'
'Modern martech stacks allow us to engage across touchpoints, from booking to post-stay,' said Singh. 'The program becomes a concierge, not a coupon machine.'
He elaborated further, 'Talking specifically about the hospitality industry, one can now track not just room nights, but preferences, intent signals, sentiments, travel context, and even emotional behaviour across touchpoints, from booking to post-stay. As a traditional industry, hospitality has been very strong in the journey from 'Warm Welcome' to 'Fond Farewell', but martech has really helped to fill in the gap beyond this journey, which is enabled by deploying dynamically triggered personalised offerings, content, or experiences at the right time to the right person, making the loyalty programs feel like a concierge and not a coupon machine.'
A significant enabler of modern loyalty strategies is the co-branded credit card. 'These cards are no longer just spend enablers, they're data goldmines,' remarked Singh. 'They offer insight into lifestyle preferences, not just transactions.'
'Instead of targeting 'travellers aged 35–50', we now reach people who value sustainability, dine premium, or travel impulsively,' he added.
Khushnooma noted that Marriott's co-branded credit cards helped bridge the gap between physical and digital touchpoints, enabling loyalty across the entire journey, from travel and shopping to entertainment.
Loyalty programs today are evolving into ecosystems, open, interoperable, and experience-driven. Strategic partnerships with other brands, modular architecture for rewards, and plug-and-play integrations are helping loyalty programs remain relevant to increasingly demanding consumers.
As Singh put it, 'It's a shift from transactional loyalty to experiential affinity.' In today's dynamic landscape, agility and speed to market are critical, and software-as-a-service (SaaS) models have shown what's possible. Singh suggested envisioning a future shaped by something similar, 'LaaS', or
Loyalty as a Service
.
This concept would enable brands to deploy plug-and-play APIs for redemptions and accruals, create modular rewards architectures tailored to varied life stages and personas, and co-create value with partners aligned on shared brand values and customer expectations. Such a model not only reduces point liability but also drives incremental business from partners, delivering both profitability and genuine customer delight.
'Real loyalty is earned when customers feel seen, not sold to,' concluded Singh.
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