CPG Brand Rescues Failing Loyalty Program, Boosts Retention 38% with AI Research
CPG Brand Rescues Failing Loyalty Program, Boosts Retention 38% with AI Research
Industry: Consumer Packaged Goods
Company Size: Mid-market CPG company
Feature Used: AI Research
The Crisis: Loyalty Programs That Nobody Uses
David, VP of Customer Experience at a national CPG brand, had a $2M problem. Their revamped points-based loyalty program showed dismal engagement: 12% active participation, 3% redemption rate. Customers ignored the app despite aggressive promotion.
Leadership demanded answers: Was loyalty dead? Should they abandon the program entirely? Every hypothesis led to more confusion.
The Old Way: Data Without Understanding
Customer surveys confirmed low engagement but couldn’t explain why. A loyalty consulting firm quoted $40,000 for program redesign with a 12-week timeline. Meanwhile, David’s competitors were winning with seemingly similar programs.
He needed to understand: What jobs are customers actually hiring loyalty programs to perform in today’s economy?
atypica.AI Solution: Jobs-to-be-Done Analysis in 21 Minutes
David used atypica.AI’s AI Research, asking: “How has brand loyalty fundamentally shifted, and what do consumers actually want from loyalty programs?”
The platform applied STP (Segmentation, Targeting, Positioning) and Jobs-to-be-Done frameworks. AI personas revealed four distinct motivation-based segments:
Value Optimizers — Minimize financial risk and regret
Quality Investors — Ensure long-term value and performance
Values-Driven Advocates — Affirm identity and ethical beliefs
Pragmatic Traditionalists — Secure reliable functionality at fair prices
The devastating insight: Complex points-based systems fail because they don’t match any segment’s actual job-to-be-done.
Impact: From 12% to 50% Engagement
Short-term wins:
Identified why traditional loyalty failed (wrong “jobs” being addressed)
Discovered Value Optimizers want instant gratification, not delayed rewards
Received segment-specific program redesign strategies
Long-term results:
50% active participation after launching instant-value loyalty
38% retention rate increase across all segments
$1.8M incremental revenue from Values-Driven Advocates segment
Saved $40K in consulting fees and 12 weeks of guesswork
Before vs. After
Traditional program: Complex points accumulation, delayed gratification, 12% engagement
atypica.AI-informed: Instant discounts, segment-specific rewards, 50% engagement
The Winning Insights
The research revealed segment-specific loyalty expectations:
Value Optimizers want:
“Abandon complex points systems. Implement ‘always-on’ instant gratification.” — Immediate checkout discounts, clear cash-back offers, simple valuable coupons
Quality Investors want:
“Enhanced service and long-term value protection.” — Extended warranties, free maintenance, expert consultations (not points)
Values-Driven Advocates want:
“Community building and value-aligned rewards.” — Charitable donations, exclusive co-created products, mission-driven events
One persona quote transformed David’s understanding: “I need to feel I’ve secured the absolute best deal to reduce anxiety and avoid post-purchase regret.” — Penny Wise (Value Optimizer)
Traditional points didn’t deliver that feeling. Instant savings did.
The Implementation
David abandoned the universal points program and launched segment-specific strategies:
For Value Optimizers (45% of customers):
Target Circle-style instant discounts at checkout. Clear unit pricing displays. Direct messaging: “Proven to be 15% cheaper than Brand X.”
Result: Engagement jumped from 8% to 64% in this segment.
For Quality Investors (25% of customers):
Free product maintenance program and extended warranties. Educational content showcasing longevity and expert reviews.
Result: 89% satisfaction scores, 31% increase in premium SKU sales.
For Values-Driven Advocates (20% of customers):
Partnership with environmental nonprofit—1% of purchases donated to ocean cleanup. Exclusive access to limited-edition sustainable products.
Result: Created brand ambassadors generating $1.8M in word-of-mouth revenue.
For Pragmatic Traditionalists (10% of customers):
Simple paper coupons mailed directly. No app required. Straightforward “buy 5, get 1 free” offers.
Result: Highest retention segment at 82%.
The Results
Within six months, overall loyalty program participation quintupled. Customer acquisition costs dropped 28% as Values-Driven Advocates became organic brand ambassadors. Most critically: the program finally drove profitable behavior change rather than being a cost center.
Customer feedback shifted from “confusing and not worth it” to “this program actually understands what I need.”
“atypica.AI revealed that we were building a loyalty program for the brand we wanted, not the customers we had,” David reflected. “Once we aligned rewards with actual jobs-to-be-done, engagement followed naturally.”
The research showed that loyalty must be continuously earned through segment-specific value delivery—not assumed through generic point accumulation.
For CX leaders struggling with loyalty program ROI, atypica.AI decodes what customers actually want from brand relationships in today’s conditional loyalty economy.
Try atypica.AI’s AI Research to discover what jobs your customers are really hiring your brand to perform.