Quality, service and loyalty drive value beyond price discounting
| The Challenge | The Response | The Desirables | The Result |
|---|---|---|---|
|
Offering consumers value on their terms:
– Price
– Quality
– Service
– Loyalty
– Ethics
|
Understand value perception across generations. |
Gen Z: Seamless access and curated offers. |
72% spend more if a brand has a loyalty scheme. |
|
|
Build engagement via value-driven loyalty apps. |
Millennials: Secure access and instant rewards. |
36% will pay more for excellent customer service. |
|
|
|
Older Consumers: Price discounts and BOGOF deals. |
|
How do you define value? For many consumers, ‘cheap’ doesn’t just mean ‘not expensive’, but is also associated with lower quality.[1]
This can lead to negative perceptions of deep price discounts, especially among consumers whose definition of value is “the quality I get for the price I pay”.
In a landmark 1988 paper, Valarie A Zeithaml proposed a more general definition of value:
“The consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given.”
– Journal of Marketing, 1988[2]
This broader definition of value means discounts are not the only way to give customers more in return for their loyalty to your brand.
In this article, we look at the present-day perception of value, the driving forces behind it, and why just cutting prices doesn’t always generate more sales.
The decline of deep discounts
Budget retail relies on the principle of “pile it high and sell it cheap” where large volumes of low-price transactions add up to substantial sales and profits overall.
However, recent trends in UK retail show that consumers’ shopping behaviour is moving away from discount and rewards-based retail, with more transactions placed with general retailers instead.
| Type of Retail | Vol of Transactions | Value of Transactions |
|---|---|---|
|
General Retailers |
+3% |
+2% |
|
Discounts & Rewards |
-6.4% |
-3.8% |
The table above shows trends in UK retail in the 12 months to April 2026. During the same period, spending at supermarkets fell 2.2%, but spending at food and drink specialists rose by 3.9%, with a 7.5% increase in volume of transactions.[3]
What do consumers look for?
While price still matters, consumers are also influenced by factors like product quality, customer service, ease of checkout processes and the availability of loyalty programmes.
According to a study by Deloitte, these additional considerations contribute up to 40% of the perceived value of a brand – and in some industries, can help to bring in additional customers.[4]
“Our analysis shows that consumers demonstrate higher future purchase intent toward brands that add value beyond price, creating a meaningful opportunity to differentiate without competing on price alone.”
– Deloitte, 2026[5]
What drives brand value?
Deloitte’s study includes several more striking statistics surrounding consumers’ perception of brand value, and what contributes towards it:
-
- 72% say loyalty programmes make them more likely to spend with a brand
- 80% say they get more from their preferred brand due to a loyalty programme
- “Overall value” ranks as the top driver for why consumers join loyalty schemes
Again, the definition of ‘value’ varies between generations. Gen Z are most likely to value seamless cross-platform access to their loyalty accounts, along with personalised offers and product recommendations.
In contrast, Millennials are the demographic most likely to value secure access to loyalty apps, automatic rewards regardless of the payment method used, and instant notifications about the availability of rewards.[6]
Generating Gen Z loyalty
As Gen Z become the major spending force in the UK and world economy, brands need to understand the nature of loyalty for this emotionally engaged demographic.
In early 2026, the journal Encyclopedia published a paper by Bournemouth University researchers which noted that Gen Z loyalty is not just a case of buying from the same brands time after time.
“For Gen Z, loyalty is not based on habit, nostalgia or even convenience. Instead, it is conditional, context-sensitive and value-driven.”
– Encyclopedia, 2026[7]
Whereas previous generations awarded their loyalty based on factors like price and quality, the researchers noted that Gen Z consumers are more likely to assign brand value to ethical issues like equality, workers’ rights and climate change.[8]
This raises a unique challenge for brands to effectively communicate their ethics via their websites, loyalty apps and socially aware promotions, to ensure campaigns appeal to younger consumers as they reach economic maturity.
How do older customers perceive sales promotions?
An interesting quirk among older consumers is a resistance to volume-based sales promotions (e.g. 50% extra free). Researchers suggest that this could be because older people believe they have less time remaining to enjoy a bulk-buy product.[9]
The same effect is not seen when shopping as a gift, or when the extra volume is easy to split (e.g. buy one, get one free) as the excess can be shared with others.
Notably, older consumers do not show the same resistance to price-based promotions, indicating that discounting does still have a role to play in reaching shoppers of different demographics.
Customers will spend more for value
The Institute of Customer Service published its UK Customer Satisfaction Index in January 2026, noting a 2.1-point increase in overall satisfaction year-on-year and taking the index to 78.2 points.[10]
According to the report:
- Over 25% of people say price, value and quality are more important than 12 months ago
- Over a third (35.6%) prefer excellent service – even if it costs more
That’s an increase of 4.3 percentage points in the measure of UK consumers willing to pay more for the best customer service, making it a key ingredient in the mix alongside cost and quality.
Consumers balance control with convenience
Brand value is not a binary choice between low-cost and luxury; it is a tapestry of different influences, each of which is reflected in consumers’ own shopping behaviour.
In 2026, shoppers in Europe are “increasingly balancing control and indulgence” as they seek to stay within their means, without completely sacrificing convenience and little luxuries.[11]
Loyalty can be earned by catering to these contradictory needs, offering personalised discounts and product promotions that do not fall foul of the perception that cheap equals low value.
At the same time, loyalty scheme rewards – both points-based and tiered – can extend brand value by delighting customers with the little luxuries they crave, at no extra cost.
To discuss more ways you can reach your target demographic, contact MRM today to book your 15-minute fact-finding meeting, or to ask us about the work we do.
[1] https://myscp.onlinelibrary.wiley.com/doi/10.1002/jcpy.1041
[2] https://www.researchgate.net/publication/282671247_Consumer_Perceptions_of_Price_Quality_and_Value_A_Means-End_Model_and_Synthesis_of_Evidence
[7] https://www.mdpi.com/2673-8392/6/1/27
[8] https://www.mdpi.com/2673-8392/6/1/27
[9] https://link.springer.com/article/10.1007/s11747-026-01160-6
[10] https://www.instituteofcustomerservice.com/research-insight/ukcsi/