Transactional VS Emotional Customer Loyalty

Shep Hyken
3 min readMay 30, 2023

How Brands Can Find a Balance Between Incentives and Emotional Connection

Shep Hyken interviews Mark Ross-Smith a.k.a Mr. Loyalty and the CEO and Co-Founder of Loyalty Data Co, the parent company of He talks about the roles of transactional and emotional incentives and how brands must learn to balance the two to build long-term customer loyalty.

Top Takeaways:

  • Loyalty programs are used in different industries to attract new customers and retain existing ones. They typically involve incentives for spending money on a brand through points, perks, upgrades, or free products. Loyalty programs have now evolved to include enhancing the customer experience.
  • In the recent Achieving Customer Amazement study, 69% of customers say loyalty programs are important to them. That’s almost seven out of ten customers who appreciate a good loyalty program.
  • True loyalty programs are not just about points and perks; that is more about marketing. True loyalty is when a customer chooses to do business with you even when they have other options, regardless of the rewards.
  • A successful loyalty program is not designed for everyone. It should work really well for a certain group of customers and reasonably well for a slightly larger one.
  • There are two ways to get people more invested in a brand. First is the transactional way, such as getting customers to subscribe to a product. Then there is the emotional way which is getting people to connect with your brand through personalized engagement and positive experiences.
  • Transactional incentives and emotional engagement have their roles in creating loyalty. Brands must learn to find a balance between the two to build long-term customer loyalty.
  • Some brands use the five love languages to tap into the emotional side of their customers — Words of affirmation (“You’re one of our most important customers.”), Quality time (Spending time to ask them about their day or their experience), gifts, acts of service, and physical touch (a handshake or a gentle tap on the shoulder when appropriate).
  • Plus, Mark shares the interesting ways airlines and customers benefit from loyalty programs. Tune in!


“When customers are emotionally invested in a brand, they tend to spend more money, engage more, tell their friends, and are more accepting when things go wrong.”

“Be a customer of your own product. Learn the challenging situations that your customers face throughout their experience. Being a customer of your business is fantastic training for learning how to improve the customer experience and the loyalty experience.”

“True loyalty is a two-way street. The customer shows brand love through transacting and being loyal even when they have other options. The brand rewards their loyal customers through incentives and providing them with a great experience.”


Mark Ross-Smith, a.k.a Mr. Loyalty and the CEO and Co-Founder of Loyalty Data Co, the parent company of, a loyalty platform that helps individual consumers and corporate clients get equivalent value status with a competing airline and hotel.

Shep Hyken is a customer service and experience expert, New York Times bestselling author, award-winning keynote speaker, and host of Amazing Business Radio.

This episode of Amazing Business Radio with Shep Hyken answers the following questions and more:

  1. What is a loyalty program?
  2. What is a successful loyalty program?
  3. What is the difference between transactional and emotional loyalty?
  4. How do brands leverage the five love languages to create customer loyalty?
  5. How does an emotional connection impact customer spending?

Originally published at on May 30, 2023



Shep Hyken

Shep Hyken, customer service expert, business speaker and New York Times bestselling author, helps companies deliver AMAZING customer service and experiences!