U.S. consumers say brands consistently fall short on the emotional drivers that matter most—revealing hidden weaknesses in loyalty strategies across retail, hospitality, and travel.
MINNEAPOLIS, Feb. 17, 2026 /PRNewswire-PRWeb/ -- New research from Phaedon, a loyalty technology and services provider, finds that many B2C companies may be overestimating the strength of their customer loyalty. As economic pressure and rising costs make customer retention more critical than ever, understanding where loyalty breaks down has become a material business concern—not just a marketing one. While program participation remains high, customers report consistent gaps between the emotional drivers they value and how well brands deliver on them.
Based on a nationally representative U.S. consumer study, the research examined how customers evaluate emotional loyalty and where expectations are being set today. The findings reveal a clear gap: while brands generally perform well on loyalty table stakes such as reliability, data security, and program clarity, they consistently fall short in the areas that greatly influence emotional connection and long-term commitment.
"Brands know emotional connection drives loyalty, but they don't always know how to measure it and apply it to their strategy to really drive retention," said Denise Holt, SVP of Strategy and Research at Phaedon. "Our research reveals that execution gaps are undermining loyalty even among customers who appear most committed—a silent erosion many brands haven't detected."
Across industries, consumers identified emotional drivers such as acting on customer feedback, offering meaningful choice and flexibility, and demonstrating appreciation beyond transactions as highly important—yet consistently rated brand performance lower in these same areas. For example, 83% of dining customers say it's important that brands act on feedback, but only 66% say the dining brands they use most do. In hospitality, 78% of consumers say personalization matters, while just 66% agree brands deliver personalized experiences.
These gaps appear even in industries with mature loyalty programs. In entertainment, 87% of consumers say surprise-and-delight moments are important, yet only 73% feel brands deliver, underscoring the challenge of translating rewards and benefits into emotional resonance.
The research also highlights significant generational differences that further complicate loyalty strategies. While Baby Boomers and Gen X report some of the highest expectations—and the greatest disappointment when brands fall short—Gen Z places outsized importance on values-driven behaviors. Eighty-four percent of Gen Z consumers say it's important that brands treat employees well, yet only 71% believe brands meet that expectation.
"The good news is that these execution gaps are fixable, once you know where to look," Holt said. "Brands that measure and act on emotional loyalty drivers, not just engagement metrics, are the ones who will build relationships that last."
The full Humanizing Loyalty research report includes the complete findings, with detailed industry and generational benchmarks.
Survey Methodology
The research is based on a nationally representative U.S. consumer survey conducted in the first half of 2025. The study includes 1,769 respondents evaluating brands and 1,501 respondents evaluating loyalty programs across five industries: retail, hospitality, transportation, dining, and entertainment. Respondents rated the importance of emotional loyalty attributes and how well the brand or program they use most frequently delivers on those attributes, enabling direct comparison between customer expectations and perceived performance.
About Phaedon
Phaedon is a leading loyalty partner for organizations across travel, hospitality, and retail, helping brands humanize loyalty by transforming customer interactions into meaningful, lasting relationships. Through innovative technology, strategic expertise, and advanced analytics, Phaedon delivers end-to-end loyalty solutions that generate measurable business outcomes. Its award-winning Tally™ platform enables organizations to scale loyalty with precision, deepen customer engagement, and strengthen connection at every stage of the relationship. Trusted by leading and growth-focused brands, Phaedon helps clients turn loyalty into a sustained driver of growth and long-term competitive advantage. Learn more at wearephaedon.com.
Media Contact
Cynthia Stryker, Phaedon, 1 817-879-2858, [email protected], wearephaedon.com
SOURCE Phaedon
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