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Home > Business > Rewarding loyalty to create brand advocates

Rewarding loyalty to create brand advocates

Published by Gbaf News

Posted on September 19, 2018

4 min read

Last updated: January 21, 2026

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Karen Wheeler, Vice President and Country Manager UK, at Affinion

It’s a well-known fact that while attracting new business is important, the most successful firms are those that are able to retain customers and build on this base to maintain profitable growth.

With markets saturated and an abundance of choice available to consumers, businesses are having to find new ways to reward their loyal customers.

It was therefore, a surprise to read in a recent Which? report that customers who stick with the same home insurance provider year on year get charged, on average, £75 more than new customers. When customers discover a disparity in prices, they can become disillusioned and switch to rival providers. Instead of rewarding loyal customers, these insurers are penalising them and subsequently turning them away.

Of course, it is not only insurers who have faced criticism for failing to reward their loyal customers. When all kinds of businesses – including mobile and broadband providers – offer significant discounts to new accounts, existing customers inevitably become alienated. This approach is also very expensive, as Lee Resources has shown, attracting new customers costs businesses up to five times as much as retaining existing ones. With aggregators increasingly being used to make the process of buying insurance simple and more transparent, switching is rife. Insurers, therefore, must try harder than ever to retain customers.

The importance of a connection

Customer Thermometer found that the primary reason customers connect with a brand is that it shows it cares about them. When this connection is made, businesses will see the benefit as customers become loyal and therefore much less price-sensitive, demonstrating the difference that brand advocacy can make. Our ‘Connected Customer’ research shows that a long-term customer relationship happens when companies become a genuinely meaningful part of a customer’s everyday life.

Businesses are no longer just providers of policies or products – they must offer benefits and services that stretch from the functional into the enjoyable. If they can create loyalty programmes that offer products, services, rewards and experiences that make a genuine positive difference to their customers’ life, they can be extremely successful in creating brand advocates.

Loyalty programmes cannot, however, simply be transactional. If it becomes apparent that rewards and deals are only available once customers regularly purchase products, the idea of a special, personalised experience will not endure. When it comes to consumer spending, a ‘favours for favours’ mentality is not sustainable and while customers may be initially engaged, this will soon wear off.

Making it personal

These days, for loyalty programmes to be effective, they must be hyper-personalised – a ‘one-size fits all’ approach will no longer work. With customer approval, businesses can now access vast amounts of data, from multiple touch points, giving them unprecedented insight into their customers’ behaviour, wants and needs.

Whereas it may have once been enough to send your customer a birthday message, it’s now possible to know their favourite sports teams, where they like to go on holiday or how active they are on social media. With this information, businesses can offer rewards and experiences that are genuinely built for them. Offers including cyber protection products, relevant store discounts and priority restaurant reservations give brands a highly personalised experience and will help drive advocacy.

Challenger bank Monzo is a good example of how the personalisation game has changed. It analyses its customers’ transaction data and is therefore able to offer financial advice based on their regular spending habits. If a customer’s energy bill has changed, they can suggest moving to a new supplier or find other ways to save money, for example. It’s this kind of value-added service that insurers could take inspiration from, transforming the customer experience and elevating how they are perceived.

With customer expectations forever rising and disruptors continuing to have a transformative effect on the insurance industry, there are a number of challenges that insurers will face in the future when it comes to customer engagement. Existing customers will increasingly expect value added to their services and aggregators are making it easy for them to switch if they find a better offer, so insurers must identify ways to enhance what they offer to customers who stay with them. In the face of this challenge, insurers must look to the rapid pace of technological change and find innovative ways to reward their customers and add value to their service.