FMCG marketers talk about loyalty with a quiet sense of ownership. Our loyal buyers, our top tier, our most valuable consumers. It’s a nice way of thinking, it feels reassuring, stable. But is it a reflection of reality?

The reality is consumers don’t belong to brands in any meaningful way. They drift in and out, sometimes predictably, usually not. They treat loyalty less like a contract and more like somewhere they visit when it suits.

We’ve seen an uplift in briefs around loyalty; brands are increasingly turning to it as a growth strategy. But thinking about consumer loyalty as a contract or as a static state of play is getting in the way of success.

A better way to think about loyalty is to imagine it as a city.

Not everyone lives there. Not everyone visits every day. Some people pass through once and never again. Others visit frequently, but irregularly. The city does not survive because of a fixed population; it thrives because enough people decide it is worth returning to often enough.

If loyalty is a place people visit, then most loyalty strategies are misdirected. They optimise for permanence in a system defined by fluctuation.

Five principles for how loyalty really works

1. Commuters matter more than you think

Most loyalty programmes are designed around the ‘top loyalty band’, the heaviest buyers. They get the most attention and most loyalty modelling is based around them.

But cities do not thrive on residents alone. They are massively dependent on commuters who contribute volume and economic value without appearing fully ‘loyal’ in the traditional sense.

These lighter and lower-frequency buyers are often dismissed as marginal. Despite representing a disproportionate share of revenue and being easier to nudge and bring back to the brand. But they are routinely under-invested in because they fail to meet the arbitrary threshold of loyalty.

McDonald’s bucks this trend by building for occasional visitors. Its app is designed to pull these people back in with simple, timely prompts. The brand accepts loyalty is fleeting, engineering frequency across a wide base.

2. Neighbourhoods are always changing

Segments and tiers feel stable, but up close they are just like neighbourhoods – constantly changing. People move up and down depending on dozens of factors outside of a brand’s control. Today’s heavy buyer is tomorrow’s occasional purchaser. The written-off lapsed user quietly reappears. Treating loyalty as a fixed status is like assuming someone will live on the same street just because they did last year.

Netflix accepts this reality and turns it into advantage. Instead of locking users into rigid tiers, it continuously adapts recommendations, content drops and pricing structures to bring people back when attention drifts.

3. Behaviours matter more than labels

Tiers, segments and scores make our reporting easier, but in reality, they are abstraction and tell us very little.

If we accept loyalty is like a city, then behaviour is the map. Behaviour tells you where to invest, where there’s friction, where intervention is needed.

Amazon is a best-in-class for capitalising on behaviour with its data-driven personalisation. Recommendations, subscriptions and replenishment prompts are all based on real behaviours, not arbitrary labels.

4. Empty attractions do not build loyalty

Brands lean on incentives and rewards as the primary levers of loyalty, but the data continuously shows redemption is low.

Cities don’t thrive on coupons – they thrive on choice, relevance, and moments that feel designed for the visitor.

When loyalty programmes focus too heavily on incremental gains, they end up building empty museums – technically impressive, but emotionally redundant.

At best, these incentives can trigger short-term spikes in sales (especially in price sensitive categories). But if you build a loyalty strategy dependent on constant bribery, you end up with a cost centre, not a loyalty strategy.

Coca-Cola’s branding has allowed it to side-step this trap. Coke’s strength does not come from a perpetual stream of offers, but rather from decades of building a brand people want to return to instinctively. Promotions play a role but they aren’t the loyalty engine.

5. People return to places that feel good

This is the uncomfortable truth. The most powerful driver of repeat behaviour is not a points balance or a tier status – it is how the experience feels.

Functional ease paired with emotional resonance is what turns a visit into a preference; the sense that a brand understands you, fits into your life and adapts to your needs. It’s the accumulation of small, well-executed moments that create a feeling of rightness.

Take Apple. Its ecosystem removes friction – from a seamless set up to user-friendly packaging. Its products have a point of view – simplicity, ease, modernity. The result is a consistent experience which feels considered and is easy to choose again and again.

In summary

Cities earn loyalty, one visit at a time, from people who always have somewhere else to be. FMCG brands should look at it the same way.

By designing for return, not retention, investments are more likely to be put in the right places, because loyalty is not something which can be locked down.

Jo Zukunft is director at Radius Insight