So much for a slow summer start. Lots of industry news in the past few weeks!
I’m always fascinated by which link gets the most clicks, so going forward, I’ll include in this section the most-clicked link from the previous issue. In Issue #20, it was this gem of an article by Forbes on why hyphenated names break loyalty systems (PSA: I don’t recommend a hyphenated name).
Also trying out a new section, Pointed Quotes. Lmk what you think!
In this Issue:
👉🏻The Big Point: The Art of the Loyalty Walk-Back
🗣 Pointed Quotes: Things said across the industry this week
🔎 Points Worth Reading: WSJ on Personalized Pricing and CMSWire has a CRMC recap
⚡Quick Points: Scannable to know. Clickable to learn more.
👉 THE BIG POINT
All Programs Make Mistakes. The Smart Ones Admit It.
Alexander Pope famously said, “To err is human; to forgive, divine”.
However, any of us who have been on the receiving end of customer loyalty backlash know the ‘forgiveness’ part doesn’t often show up. But on the flipside, our industry historically hasn’t been great about admitting our errors.
Not admitting mistakes is in fact, a mistake. But some brands are learning, mostly for the better.
The Reversal: Carnival Cruise Lines
Carnival announced changes to its program in 2025 that impacted “lifetime” loyalty, and the backlash was swift and loud. Customers called the changes a “slap in the face,” and Carnival soon reversed course by honoring lifetime status for Diamond members, extending the grace period to 2028 for Platinum members, and delaying the new program until later in 2026. It is now set to launch in September.
What they did right? Pre-announcing the changes a year in advance gave Carnival room to understand customer sentiment before the new program went live. And they eventually took care of their best customers.
What did they do wrong? They had to know the backlash was coming and decided to go ahead anyway. Fixing it was better late than never, but the brand damage was done.
The Adjustment: Delta SkyMiles
Back in 2023 Delta launched a program overhaul switching from miles flown to cash spent in calculating rewards, and making the tier requirements very hard to achieve. CEO Ed Bastion issued a mea culpa saying “no question we probably went too far” and admitted they tried to make too many changes at once. Requirements were pulled back, restrictions eased a bit, and Sky Miles is one of the most successful airline programs today in terms of profit.
What they did right? The CEO comment was perfect— honest, straightforward. Adjusting quickly also helped.
What they did wrong? Crammed too many changes at once. Ripping off the bandaid is not a wise move when it comes to loyalty changes. Sometimes it just makes everyone look directly at the wound.
The Reframe: Starbucks Rewards
Starbucks made changes in March that devalued some rewards and also led many members to see their “Gold” status disappear. Starbucks didn’t reverse the program changes despite the negative feedback. Instead, the company focused on educating members and highlighting the positive parts of the update, including a more generous expiration policy and more flexible rewards that started at lower star levels. And according to Starbucks, the new program is growing and performing well.
What they did right? They leaned into education and highlighted what was better. They also gave it time and didn’t panic.
What they did wrong? They should have gifted Gold level to some existing members, if only for the optics. Sometimes the cheapest fix is the one that prevents the loudest complaint.
How to Avoid Program Launch Errors
Answer: You can’t. At least not 100% of the time. All the research, data, analysis, and ChatGPT querying in the world will never fully predict how consumers will react, what will go viral, and what the media will seize upon.
Almost every program change, even one that is 100% in consumers’ favor, will create some negative reaction. And inevitably, you will get something wrong.
But there are ways to avoid or lessen a loyalty program PR meltdown.
Announce first, launch later: Get the news out there before the changes go into effect. Give yourself breathing room to gauge consumer reaction and if needed, pivot, similar to Delta and Carnival. This doesn’t mean a Reddit forum designs your program. It means understanding that member opinions are part of the launch plan, not something that happens after the launch plan.
Build for flexibility: This is often overlooked, but many tech systems can’t modify program benefits, tiers, or earn/burn structures without time-consuming enhancements. Pick MarTech providers carefully, and build any changes in a way that they ARE technically changeable, easily.
Don’t go silent: Wishing the problem will go away won’t make it go away. Stand behind your changes and explain the why. Statements like “we have too many elite members to properly serve them” or “the program has gotten too expensive” may sound scary, but they are not bad statements if they are true and framed well.
Don’t do too many changes at once: This mistake is made often (yes, I’ve done this too). Brands do massive overhauls, changing five things at once. Sometimes it is done to mask the bad news (such as a devaluation) with good news (such as more reward options). Sometimes it is done because it is easier operationally to make internal and tech changes all at once. Resist this. Consumers cannot consume too many mechanical changes at once. Spread the news out. Make program updates in waves. Give members time to understand what is changing before you change the next thing.
Talk about what’s not changing: Consumers hate change, even when it's supposedly for the better. We are creatures of habit. So any announcement will have detractors. Don’t just talk about what is new. Talk loudly about what is staying the same. Bilt learned this recently with the rollout of its new credit card, with CEO Ankur Jain saying, “Our mistake was spending so much time talking about the new stuff and not reinforcing that the old stuff’s not going away.”
Don’t Forget The Internal Optics
While this Big Point is about consumer-facing errors, don’t forget the importance of admitting mistakes internally.
The same five-point list applies inside your organization. Your math might be wrong. Your legal team might not have aligned with your PR or customer support teams early enough. Your tech partners might need to make last-minute Hail Mary changes.
It’s all part of being in this industry, pretty common, and also very fixable.
The worst mistake is rarely the original mistake. It’s pretending there wasn’t one.
Questions for Loyalty Leaders:
Dare to admit a launch mistake? Tell me what happened and what you’d do differently. I’ll share in a future issue but keep it anonymous (and won’t mention the specific program).
💬 POINTED QUOTES
…rewards programs are fairly one-directional….now, it’s allowing that messaging to be more unique…the end spot is the guest has the ability to talk back.
We’ve maintained a fixed award chart, so you don’t have to guess. Some of our competitors…have gone to a dynamic award chart.
It’s less than 10% of our business
🔎 POINTS WORTH READING
⚡ QUICK POINTS
✈️ TRAVEL & TRANSPORTATION
Lyft launched a loyalty program for its drivers. Smart.
🍴RESTAURANTS
Wingstop launched Club Wingstop, calling it an “experience-led” loyalty program, even though it still has a basic point-earn/burn component. But it also includes exclusive merch drops and “cultural experiences” like seats at NBA games. Other great features: the ability to transfer points to other members and unlock group ordering. Overall, pretty solid program.
What has ‘digital-first’ tech given restaurants? Not more customers, according to one excellent article.
🛒RETAIL
Everyday membership battles heat up! Amazon moved its Prime Day to June 22 to coincide with Walmart's Deals launch, which breaks early that day for Walmart+ members. A few days later, Target moved up their deals day to the same dates.
Ulta’s rewards program grew 4% this past quarter and its CEO said it’s “not about discounts” but “education and product recommendations” to help build the basket. While the latter is true, the former is not. Part of makes Ulta Rewards a great program is the saving richness.
Wayfair extended its Rewards program to Canada and the UK and said the program is meant to “bend the curve” to get customers to spend a few hundred more dollars.
💳 FINANCIAL
Because not every brand should have a cobrand: Tim Horton’s is shutting down its Mastercard in Canada.
Interview with Bank of America’s CEO and why Reward programs for banks are “not about acquisition, it’s consolidation”.