Will Lavender.
At a recent leadership panel titled ‘Customers Redefined Loyalty. Did Brands Miss It?’, we explored whether loyalty has fundamentally changed.
It has.
But not in the way many assume.
Consumers haven’t redefined loyalty. They’ve redefined their tolerance.
Across Australia today, cost-of-living pressure has changed the psychology of loyalty. Customers are financially cautious; sceptical of corporates; doubtful about back-end service; cognitively overloaded; and quicker to switch than ever before. They are less brand-faithful and more value-faithful.
The old equation was simple:
‘I stay because I’ve accumulated value.’
The new equation is more immediate:
‘I stay because this brand fits my life, right now.
That shift matters.
Loyalty is no longer stored. It’s experienced, continuously.
The Hierarchy Has Flipped
For years, loyalty looked like this:
Financial reward was the hook.
Emotion reinforced behaviour.
Ease was hygiene—necessary, but in the background.
Now the weighting has inverted.
Ease is primary.
Financial value justifies the decision.
Emotion differentiates.
If ease fails, loyalty collapses instantly.
We saw this play out in our own home.
We bought a high-quality refrigerator from a respected brand. It performed beautifully, until the ice maker failed.
What followed wasn’t dramatic. It was friction. And it accumulates.
Call centres with limited product knowledge.
Delays dispatching technicians.
Retailers deflecting responsibility.
Installers unable to explain features properly.
No simple explainer content.
Escalation that ultimately required ombudsman involvement.
The product was replaced.
But the ease was gone.
And with it, our loyalty.
Tess, my wife, summed it up in one sentence:
‘We’re never buying that brand again.’
The mechanical fault didn’t lose us. The operational friction did.
Ease is the new premium.
Loyalty Is Category-Specific, But Always Systemic
Different categories express loyalty differently.
Airlines still rely heavily on financial mechanics: points, tiers, status. But those only work when reliability and redemption remain credible.
Retail loyalty depends on seamless returns, stock visibility and intelligent relevance across channels.
In banking and financial services, the equation is even more personal. Loyalty increasingly hinges on whether an institution understands a customer’s life stage: buying a first home, raising children, building a business, planning retirement; and offers relevant financial assistance at the right time.
Customers don’t want generic product pushes. They want guidance that reflects what they are actually trying to achieve.
If a bank can align its tone, advice and support to that lived context, loyalty deepens. If it can’t, switching feels rational.
In automotive, there is another often overlooked dimension.
Roughly 40% of car purchase decisions are made or heavily influenced by women. Yet many women still describe discomfort in dealership environments—particularly around recognition, respect and technical explanation.
They value being recognised.
They value being heard.
They value strong post-purchase tech support.
If decision-makers misunderstand that experience, they misunderstand loyalty.
This isn’t a marketing problem.
It’s an operational design problem.
Loyalty Cannot Sit Only in Marketing
If loyalty lives in marketing, it becomes promotional.
When loyalty is owned by the organisation, it becomes cultural.
Former Telstra CEO David Thodey understood this. So did Nick Adams, who operationally led Telstra’s large-scale customer check-in program.
It wasn’t a campaign.
It was a systemic shift; proactively contacting customers; identifying dissatisfaction early; and intervening before escalation.
Leadership backed it. Budget followed. The organisation aligned—I recall David Thodey calling customers in his lunch break.
NPS lifted materially, but more importantly, behaviour changed internally.
When the board genuinely cares, the system changes.
And here’s the thing: if loyalty is going to be funded properly, it has to be measured poperly.
Measuring Loyalty vs Managing It
We often confuse measuring satisfaction with managing it.
We’ve all endured a long, frustrating service interaction, only to be asked to complete a survey at the end. That isn’t loyalty management. It’s NPS scorekeeping.
Real loyalty management means identifying dissatisfaction early and designing recovery as a strength.
There is strong evidence that customers whose problems are resolved well can become significantly more loyal than those who never experienced a problem at all. Recovery is not a cost centre. It’s a growth lever.
But boards need commercial clarity.
If loyalty is going to be funded properly, it must be connected to outcomes: retention curves, churn reduction, repeat purchase velocity, lifetime value.
When you connect ease to commercial performance, loyalty stops being a “soft” metric and becomes a strategic growth driver.
That’s when investment makes sense.
AI: Memory, Anticipation, and Coherence
Most AI conversations centre on efficiency.
The more powerful opportunity is relational.
What excites me most about AI is memory.
Historically, organisations can forget customers between touchpoints. Context disappears. Conversations restart. Friction can build.
AI gives us the ability to preserve context, reduce repetition and detect dissatisfaction before it escalates.
If AI means a customer never has to explain their issue twice, that’s loyalty.
If AI enables proactive outreach before a payment fails, a service lapses or frustration compounds, that’s loyalty.
In financial services especially, there is another layer of opportunity.
We can begin to define and operationalise a ‘customer value layer’, articulating what customers are fundamentally trying to achieve at different stages of their financial lives, and ensuring tone, value framing and communication align to that intent.
In other words, AI shouldn’t just optimise messages in the moment.
It should help deliver a coherent, customer-led partnership over time.
That’s a very different ambition.
The opportunity is not hyper-personalisation.
It’s proactive, contextual care, joined up across the system.
The Real Shift
Perhaps loyalty once belonged to marketing.
Today, it belongs to the operating system of the business.
Customers are clear about what they want:
Make my life easier.
Deliver real value.
Treat me fairly.
It’s not complicated, but it does require alignment.
If we achieve that consistently, loyalty follows.
Not because we gamified it.
Because we earned it.
Will Lavender is Chairman, CX Lavender.