Customer loyalty is harder to earn than it was two years ago. New research shows why
Australian consumers are under financial pressure and behaving accordingly. Research published this week by the Australian Loyalty Association found that more than half of Australians, 52%, say their household budget is under significant pressure, and 86% are actively adopting cost-saving behaviours including comparing prices, buying on promotion and switching to home brands or alternative suppliers.
For small businesses that have relied on repeat customers and local loyalty as a competitive advantage, those figures represent a genuine shift in the ground beneath them. Australian Loyalty Association Founder and CEO Sarah Richardson put it plainly. “Brands can no longer assume loyalty is a given. Consumers are under pressure, they are actively comparing alternatives and they expect tangible value in exchange for their engagement,” she said.
The research also found that 80% of Australians expect better offers from a brand if they are a loyalty program member, and 72% expect better service. For small businesses running informal loyalty programs, a stamp card or a discount for regulars, the gap between what customers now expect and what is being delivered may be wider than owners realise.
The AI dimension adds another layer. Forty-one per cent of Australians report using AI to help research purchases in the past year. Richardson described this as a structural shift in how customers discover and evaluate brands. “AI is becoming the new front door to the customer journey. Consumers are increasingly using AI tools to compare products, research purchases and seek recommendations before they ever reach a brand website,” she said. For small businesses with limited online presence or inconsistent information across platforms, that front door may not be opening in their favour.
The practical implication for SME owners is not to build an enterprise loyalty program overnight. It is to audit what customers currently get in return for their loyalty and ask honestly whether that offer is keeping pace with what they can find elsewhere. Tangible value, relevance and personalisation are the factors the research identifies as driving retention. For a small business, those translate into knowing your regulars, rewarding them in ways that are meaningful rather than token, and making sure the experience of dealing with you is consistently worth coming back for.
Richardson’s summary is worth holding onto. “Many loyalty programs were designed for a very different economic environment. Today’s customers expect relevance, personalisation and immediate value. If brands fail to deliver, customers have more tools than ever to find alternatives.”
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