Emotional Loyalty In 2026

Loyalty isn’t a punch card anymore, and it definitely isn’t just repeat purchases. We’re chasing a tougher standard: loyalty of choice. That’s the kind of customer loyalty that shows up when someone sticks with you even when a competitor is cheaper, closer, faster, or simply more convenient and when they come back after you’ve had a service failure or a product miss. I’m joined by Jaclyn Wands, VP of Product and AI at Phaedon, to get concrete about what “true loyalty” looks like in 2026 and how to measure it without fooling ourselves.

We break down the difference between transactional loyalty (habit, ease, familiarity) and emotional loyalty (preference, trust, forgiveness). Jacqueline shares practical examples from travel and hospitality, including a smarter approach to airline loyalty programs: stop blasting generic promotions and start using data to solve the customer’s problem with relevance and timing. We also tackle the uncomfortable truth about personalization. If it feels like customers are being “haunted,” it’s usually because the brand is optimizing for its own KPIs, not the customer experience.

Then we go deep on AI in loyalty and marketing. AI can create massive efficiency, but it also exposes structural problems in your data ecosystem and processes because it scales whatever you already have. Jaclyn lays out a clear “human in the loop” philosophy, what AI should absolutely handle (repetitive work, zero-to-one drafts), and where humans must stay accountable. Finally, we look ahead to AI assistants as a new gatekeeper for discovery and booking, and why brands may need loyalty programs connected into AI marketplaces to stay visible and differentiated.

Subscribe for more conversations on customer experience, loyalty strategy, and AI, then share this with a teammate and leave a review. What brand has earned your loyalty of choice, and why?

Transcript

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Loyalty Means Choosing You Again

SPEAKER_00 0:00

Loyalty of choice is actually true loyalty. If someone is choosing you time and time again, despite other better options, more convenient, despite your service failures, despite your product failure, that's loyalty. True loyalty, right? And that means that that consumer does have an emotional connection to you.

What Faden Builds For Loyalty

SPEAKER_01 0:26

Today on Customer Land, I'm with Jacqueline Wands, who is vice president of product and AI at Fadon. And is it is it fair to say Fadon loyalty? Because it does kind of point us in a in a correct direction here.

SPEAKER_00 0:39

Yes, yes, that is fair.

SPEAKER_01 0:41

Great. Why don't we just spend a moment or two talking about what Fadon does, what your kind of market differentiators are there, and what you do there?

SPEAKER_00 0:50

Yes, absolutely. So Faden is a loyalty enterprise software loyalty company. So we have this amazing SaaS software that supports very complex loyalty programs across large corporations that have multi-banners that report up through them. We built this technology with over 15 years of loyalty program design experience and strategy. So we have this really unique combination of deep, deep industry knowledge around loyalty, actual loyalty programs, strategy design. We do a lot of research among consumers, and that helps us support our customers across our soft, across our software.

SPEAKER_01 1:32

Do you have any particular uh sweet spots in your portfolio? In other words, uh again, just for deeper context, is this mostly retail or travel or financial services or you kind of yes, yes.

SPEAKER_00 1:44

It's hospitality, travel, and retail. And then we also reach very heavily with strategy into kind of B2B as well. We actually have a lot of experience in that arena, also.

SPEAKER_01 1:56

Oh, we have an awful lot to talk about. So so your role there, uh your product and AI, can you describe what that really means at FAEDAM?

SPEAKER_00 2:04

Yes, absolutely. So what an interesting title, right? In the world where AI has only existed for a few years. Some of us are popping up with it in our title, which is always fun.

SPEAKER_01 2:14

I want that. I just don't qualify.

SPEAKER_00 2:17

So I've been building SaaS products for over a decade. And I have a background in data science where I study natural language processing and time series extrapolation. And natural language processing are the algorithm algorithms and systems that support LLMs, now known as Chat GPT, Gemini, and Claude. How that applies to my job here is I'm helping ramp up our SaaS product to make sure it's got all the market fits that we need within just feature set development, the future, the roadmap, and how that translates into using these really amazing tools like OpenAI's Claude in a way that makes sense for operations efficiencies with ROIs, with just using the tool overall. And then in tandem, how we as a company can offer AI to our customers to help improve that end consumer experience with a loyalty lens.

SPEAKER_01 3:12

One of the themes that comes through on a lot of fade in's materials and the news releases, and in talking with your colleagues in advance of this call is the idea of emotional loyalty and the connectivity that that either creates or doesn't. And we've actually done quite a bit of work uh sponsoring research, doing the research, analyzing the research, publishing the research on the emotional drivers of what really creates loyalty. And therefore, it's become a real focus of mine personally. But I also look at so many loyalty providers out there who seem to be very focused on the call it the last mile in a delivery chain, without putting a lot of focus on what happens upstream. You put a heavy emphasis on what happens upstream to create those kinds of emotional connectors.

SPEAKER_00 4:06

So let's let's dig into it,

Emotional Loyalty Versus Habit

SPEAKER_00 4:08

right? So I think a lot of brands today think that loyalty is just at a transaction point. That person repeat purchased with us. And like with our own research, we've elevated that as transactional loyalty due to like ease or familiarity or habit, is kind of how we've labeled it. And brands can often mistake that for true loyalty. So, and when we really evaluate whether or not you've managed to tap into an emotional loyalty level, it depends on the full customer journey. Are they a regular visitor to your own brand sites? Do they seek you out when maybe another option is more available, a better or more convenient option is more available? But you're the brand that they would rather do business with. So there's just kind of different ways to think about that. So, like for instance, if we were maybe advising with an airline, we would ask the airline does if a customer books a flight with you, could they have booked a flight with a competitor that would have been more convenient? That actually shows emotional loyalty. For instance, did they choose to take a one-stop layover because of their Delta Miles Plus program instead of a direct with American Airlines? And I don't think enough brands are thinking about loyalty in this way.

SPEAKER_01 5:22

Completely agree.

SPEAKER_00 5:23

Yeah. And I also, the other one I also challenge brands to think about is how much measurement are you doing around your failure points? Specifically, did you have a service failure and how quickly did that person come back to your brand? That is a better measurement of emotional loyalty than how many times they've had a full transaction with you.

SPEAKER_01 5:42

Maybe what we should have done a moment ago is talk about what loyalty means right now in 2026. Because if you've been in the space for any period of time, the definition seems to change according to kind of like the phrase du jour, you know, and emotional loyalty has had its moment. And there were players who this was the positioning du jour kind of thing. But but emotional loyalty is a long-term play. It it doesn't just happen because you nailed a reward that happened to have more of an emotional pull than another one. So uh let's from a super high level, uh from Faden's perspective, from your perspective, uh what does loyalty really mean right now?

SPEAKER_00 6:30

I would say it's choice. Uh choice, loyalty of choice is actually true loyalty. If someone is choosing you time and time again, despite other better options, more convenient, despite your service failures, despite your product failure, that's loyalty. True loyalty, right? And that means that that consumer does have an emotional connection to you.

SPEAKER_01 6:53

And there's so much that we can kind of pull into that too. Can you purchase loyalty? Can real loyalty? Can convenience be mistaken for loyalty? Is it the same thing? Is there emotional loyalty, behavioral loyalty, and economic loyalty, or are they just different facets of the same kind of relationship?

SPEAKER_00 7:15

Just kind of leaning into the first kind of comparison you made.

Can Brands Purchase Loyalty

SPEAKER_00 7:18

Can you purchase loyalty? You absolutely can. That's quite literally what Amazon did. Think about it. They purchased loyalty through convenience and cost-effective pricing. Like that's that's it. They have one of the biggest loyalty e-commerce sites in the world. And they won it through convenience and price. They purchased it. I don't know if you remember, but it used to only cost Prime Prime was like what 99 out of the gate? It's like $300. So it's like it's not even, it's not even cost effective anymore. And they're changing their shipping and they're changing things that make it much less convenient. And if you really take a look, I actually challenge individuals to compare Amazon to brand direct. It's it's not even cheaper anymore. Um, you can build uh subscription-based deliveries for things like supplements directly on supplement sites that's cheaper than Amazon. And I think they're gonna start to see a shift. I think people are gonna start going back to preferred brand relationships. And I also think that there is a signal in the market to support it, as well as brands need to be rapidly thinking about how they can claw back these pieces of their market share. Because now's the time, especially with AI, at least my humble opinion. As you can see, I get really excited about it.

SPEAKER_01 8:39

You get to see how the data plays out and how effective these programs are. Are we optimizing for the wrong things? Um, you know, but if you were advising a brand, you know, in any vertical, what would be the top few things you would be telling them they should optimize for that they may not be already?

Personalize With Context Not Creepiness

SPEAKER_00 9:06

Their specific differentiator. For example, Nike optimized around being able to scan a foot and fit people with the perfect Nike line. That's how they used AI. It is incredibly tailored to their core business line. Brands need to be thinking about their value offering to their consumer and what they can do for them versus what they're optimizing for themselves. I think a big question right now is you know, how can brands make sure they don't overreach? AI is a lot of data. How do you prevent from feeling intrusive? And my biggest piece of advice is do not solve a problem for your brand. Solve a problem for your customer and make sure it's the right problem that you're solving.

unknown 9:52

Right.

SPEAKER_01 9:52

Can you give us an example of how that how that gets worked out in your real world?

SPEAKER_00 9:57

Yes. Okay, I'm gonna give an airline example. If I was running a loyalty program for an airline, I wouldn't keep sending like untailored travel promotions for someone to travel to a continent they've never been to before. I'm gonna say I'm a victim of that. You might also be sure a victim of that type of advertisement or those types of loyalty promotions. I do, however, travel to specific places very frequently. I would love to see, hey, there's a drop in price to Texas. We know you go there at least twice a year. Do you make me want to tack on a third flight? I might actually tack on a third trip if that were the case. They have the data to do this and they're solving a problem that relates to me, which is me getting to see my godchildren again, right? They don't know that specifically, but that is the use case. So instead of solving their problem, which is pushing whatever promotion that they really want people to spend points on today or this week or this month, how are you actually solving a problem I have, which is like getting to go see more family more frequently throughout the year? What do you think?

SPEAKER_01 11:07

No, I'm I'm I'm buying it. I'm completely buying it. And I and I love that. I actually wrote down your phrase, which I will I will steal, I will use it, and I may even give you credit, which is optimize for your differentiator.

SPEAKER_00 11:20

Yes.

SPEAKER_01 11:21

My goodness, I think that one right there should literally be at the top of the list. Yeah, word, right. Nice one. Well, was talking to uh basically everybody in loyalty over the years, and I think everybody optimizes for personalization on some level, but report after report after report, I can't even quote them because there are so many, say things like as brands optimize for per create more personalization, consumers are are kind of indexing away from personalization. They're not saying this feels more personal to me, they're saying other things like I feel like I'm being chased down, or you know, or you just said targeted, haunted, haunted, right? Which is a feeling like what it's it's it's a true thing. So uh in your world, how do you how do you personalize without the haunting? Here's the question I'd I would really like to explore with you is like, is it a continuum where there's personalization and call it care on one end, uh, and then there's just personalization slash haunting at the other end. Is it a continuum and you kind of find the right place on that, or is it more of like, wait, let's rephrase the question altogether because it's not a line.

SPEAKER_00 12:45

So, you know, I would take a step back and caveat this entire conversation with industry matters, right? My touch points are gonna be much higher, staying at a hotel, flying a flight that gets disrupted by weather. I want my app talking to me. I want my app telling me what's going on, I want my app assuring me I'm rebooked. I want my app telling me, I mean, here's a call to all airlines whether or not there's a chance my crew's going to time out on this delay and just rebook me. Just stuff like that. I think we've all been a victim of sitting and waiting for a flight, and then you find out your crew can't fly, stuff like that. So, you know, my favorite brands, I actually have a favorite brand. It's called Favorite Daughter. I just love their stuff. E-commerce. I do not want to be talked to as frequently by my e-commerce brand than I want to, my travel brands, while I'm on the road. And so context matters for notifications and haunting your customer. And if you're not thinking about context of communications, you're not thinking about personalization in the right way. And you are going to effectively be haunting your consumer because you're not solving their problem, you're solving yours. And that kind of just leads right back into our previous conversation. Whose problem are you solving? Your problem because you have a you have a metric you got to hit to hence send so many marketing campaigns out in X number of days or SMSs or emails, whatever it is.

SPEAKER_01 14:18

Or your court your quarterly bonus, which is a giant KPI.

SPEAKER_00 14:22

Yeah, yeah. I think it I would just challenge most you know loyalty experts to reassess what their what the problem they're solving is. Is it for themselves or their their buyer?

SPEAKER_01 15:43

So part of your title is AI. One of the themes that's emerging across all marketing and I would say customer optimization functions is that AI can accelerate things, it can bring efficiencies that were just unheard of a couple of years ago. One of the things that also is doing, and and companies are becoming a little more transparent about it, is that it's also surfacing structural defects that you might have been able to paper over otherwise.

SPEAKER_00 16:17

Yes.

SPEAKER_01 16:17

Just because of speed and scale. Yes. We see that one. And how do you advise companies to deal with

AI Amplifies Broken Processes

SPEAKER_01 16:24

that?

SPEAKER_00 16:24

Sure. So just to echo exactly what you said, this is what I call it. AI is merely an amplifier of systems and processes you already have in place. If your systems and your processes are broken, it's going to amplify something broken. If you have done your due diligence, handled your data ecosystem, implemented an excellent CDP, identified metrics that are crucial to solving a problem for your end consumer, these data points will amplify an AI that actually adds value both to your company and your consumer, is how I kind of approach it. And if you're struggling, right, seek out technology partners that talk about Martech assessments, AEO and SEO optimization, data ecosystem assessments, AI readiness assessments. We offer all these at FadeIn. But seek these technology partners that want to do these assessments with you, raise concerns, and help guide you how to fix them. And the only way you can find a partner that's going to do this, you have to have a partner that has two things AI expertise in-house and subject matter expertise. So I really challenge you to like ask your, you know, these technology partners that you're interviewing, you know, how long have you guys been using AI? What's your team look like? How long have you been in loyalty? What does your loyalty strategy team look like? How many programs have you built? What are some of the findings you've had in the past? Because without loyalty subject matter expertise, your AI recommendations aren't going to be driving those outcomes that you most likely are looking for.

SPEAKER_01 18:02

I think maybe say two years ago, there was a huge wave within this space. We're just going to look at what we can do with AI. We can automate everything if we wanted to. And you still can if you want to. Sure can. But with a couple of years of experience under our belts, and you sit in a place in particular where you get to see an awful lot of the success, successes, and failures out there. What do you think AI should absolutely be handling? And then other side of that is what do you think AI should never be handling?

SPEAKER_00 18:37

I love this question. Okay. So let me like lay a little bit lay of the lane. There's kind of like a twofold

Human In The Loop AI Rules

SPEAKER_00 18:46

answer to this. So I'm going to start at the beginning. And I think that this is something that people often forget. AI is so AI is powered by mathematical models. Models are always wrong, but sometimes they're useful. And this is a quote by EP Box, a famous statistician from forever ago, that set the standard for how we leverage these models, right? These same models are powering these computer systems. So if you remember that AI is always going to be wrong, you know that you need a human in the loop at checkpoints, right? And this is an AI philosophy here. We use it Faden, which is leveraging AI to lift off mundane repetitive tasks with proactive human-in-the-loop review to prevent any sort of compounding error that can be very costly for your business. This is both from an operations perspective and, you know, like a grow your business perspective. So like if you're going to start using AI to approach your consumer. And if you approach AI with this philosophy and you think about this, you know better than to just try to automate away everything. And it's very business dependent. What are those super critical touch points where you would like someone to review that output? I mean, this is a problem definition and decide whether or not you want to review it. If it's a super easy task and a couple errors before a check is fine, then you're human in the loops farther down the process. I would say AI is good for any sort of repetitive clicking action. So if you're having to click through something, think of anything you do in a day. If your job entails going into the same UI, clicking through the same actions every time, that AI should take that off your plate. I don't care what interface it's in. And then AI should look at you and say, hey, I did all these actions for you because I know you always do them. Is this right? And then the person can go, yes or no, make adjustments, edit in in like in flow, in process flow. So when I I also think AI is very, very good at getting us from zero to one. So, you know, design systems, AI is doing a lot of creative output. Now it's interesting, but I like to caution AI is merely a pattern recognition machine. So it can only output something that's already been created, right? It's not new creation, it's not net new creativity. But it can be an inspiration to where you're trying to go. So I think starting from zero to draft one is really, really good. But then after draft one, you need to take that as a human in the loop and start to create something novel and different, iterate on it and be truly creative in your craft. So now we're talking about really good copy that's creative. Like sure, AI can write you some copy. It's going to be in a patterned modality, and I can read it and tell you whether or not it's been written by AI in two seconds. So you want to iterate on that. You want to draft on it, you want to change it up, you want to use unique thought, right?

SPEAKER_01 21:44

Oh, I think everyone would agree that AI can make things, processes, systems much more efficient. But does that necessarily make them more human? And I wonder, I would love to explore with you because you build the products that are pointed towards emotional loyalty. But as we all know, there's a big difference between a person or a thing that knows about you versus a person or a thing that actually knows you. One implies a level of care, the other implies just more knowledge. So when you're building AI-based tools, products for your clients, how do you approach that?

SPEAKER_00 22:28

This is a great question. I love it. We at FadeIn have built the

AI Connectors And The Future Funnel

SPEAKER_00 22:35

Tally AI connector that allows brands to plug their loyalty programs into AI interfaces. I think we are entering a world very rapidly where consumers are going to have less touch points with their brands because we are going to lean into AI assistance. We already are. The Google metrics are in, people are searching e commerce, travel hospitality, and for whatever reason, finance advice from Gemini. These are like in the top five, right? We're trusting AI as a source of information. And so brands need to be represented on AI marketplaces so that AI can talk to them. Without being able to elevate your brand voice to the AI, you don't have a throughput to your customer anymore. And the differentiator is going to be having your loyalty program plugged in. And the reason I say this is because otherwise you will just loyalty will just be bought. Who is the cheapest? Who's the cheapest flight? Who's the cheapest hotel? You need to remain unique in that you are able to say, look what we can bring to the table for you if you continue to do business with us. I've kind of drawn a diamond. So it kind of, I think a lot about it like this. We used to have websites, then we got phones, then we got apps. So now we have multiple touch points, but we're talking to our customer. We're able to notify them in all these ways, right? This is the funnel opening up top deck, top top to middle, one touch point to many touch points. AI is going to consolidate your touch points, and you have to be the brand voice that can get through that AI gatekeeper. The only way to do that is to be searchable, interactable, data ready, loyalty program plugged in, so that as customers use their AI assistants more, they have you in their AI MCP marketplace or their AI connector marketplace, just like an app. And so when they talk to their AI assistant, their AI assistant will leverage the connectors that they have because they already know that that's a part of their user's profile. And my AI assistant will learn me, right? And those apps that I choose to bring into that ecosystem will be the ones that my AI assistants always talk to, reference, and book with.

SPEAKER_01 24:59

Well, you just answered my next question ahead of time, which was if you look ahead five years, what will the companies who are winning customer loyalty look like? Unfortunately, you know, five years may as well be a million at this point. And but so that may be the case in the next year or two. I think it's right here, actually.

SPEAKER_00 25:20

I think it's right here. And so get your data house in order, optimize for your differentiator. Are you solving your customer's problem or your own problem? Right.

SPEAKER_01 25:30

Flip that over just a little bit. So in two years or three years, what will companies have stopped doing that they're doing right now?

SPEAKER_00 25:39

I think that retargeting advertisements across open web pages will look very,

The End Of Retargeting As Usual

SPEAKER_00 25:46

very, very different because we're already dealing with something called the dead internet theory for web browsing. Now, this doesn't count towards social media sites like Instagram, YouTube, but humans are still scrolling. People are not surfing the internet like they used to. So purchasing images on paid news, you know, are not hitting human eyes.

SPEAKER_01 26:08

Right.

SPEAKER_00 26:09

So the this the landscape of digital advertising will be completely different. And only kind of paywalled news, social media, and I would even challenge things like your substacks. Like your substacks are like humans creating content. This human natural created content will become very, very valuable. And human eyes on digital media, the landscape will be very, very different.

SPEAKER_01 26:38

You heard it right here. Okay, lightning round. You ready for this?

SPEAKER_00 26:43

No.

SPEAKER_01 26:43

Okay, quick answers. Loyalty or convenience?

SPEAKER_00 26:47

The average consumer.

Lightning Round Metrics That Matter

SPEAKER_01 26:49

Yeah.

SPEAKER_00 26:49

Got it. Convenience.

SPEAKER_01 26:51

Convenience. Okay. Recognition or rewards? Personalization or relevance?

SPEAKER_00 26:55

Relevance.

SPEAKER_01 26:57

Surprise or consistency?

SPEAKER_00 26:59

Depends on the industry. Travel consistency, e-commerce surprise.

SPEAKER_01 27:03

Oh, good one. I love that. AI assistant or human assistant?

SPEAKER_00 27:09

Industry dependent and complexity of question dependent. And it's going to be up to the business to differentiate their consumers' needs in both of those categories.

SPEAKER_01 27:19

Privacy or personalization?

SPEAKER_00 27:21

Privacy.

SPEAKER_01 27:23

Memory or prediction.

SPEAKER_00 27:25

Prediction will do better in market.

SPEAKER_01 27:28

Trust or identity? One loyalty metric, every CMO should stop measuring.

SPEAKER_00 27:35

Repeat transactions out of context.

SPEAKER_01 27:38

Good one. All right. One loyalty metric every CMO should start measuring.

SPEAKER_00 27:43

Return after point of failure. Return of consumer after point of failure.

SPEAKER_01 27:47

Look at that. Nailed it. That is Jacqueline Wands, who is head of product and AI at Phaedon.

Wrap Up And Share Links

SPEAKER_01 27:56

And this is literally the tip of a giant iceberg that we still need to talk about. So, Jacqueline, thanks a million for this. It's not only been fun, but it's been eye-opening too. We'll have links to Fadon, to some of the research and some of the things we've talked about here on this episode. Please click and pass this on to your friends. Jacqueline, thanks a million.

SPEAKER_00 28:18

Thanks, Mike. It was a good time. Thanks for having me.