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GLO Featured: Loyalty Program Reset Playbook: Step-by-Step to Reinventing Rewards. What Air Canada, IHG, Starbucks, and Domino’s Can Teach Every Brand.

Loyalty programs are a trillion-dollar ecosystem, yet most memberships sit idle as points lose value and customers disengage. This GLO study outlines a step-by-step playbook for reinvention, drawing lessons from Air Canada, IHG, Starbucks, and Domino’s, demonstrating how transparency, personalisation, and signature perks can transform loyalty from a liability to a growth engine.

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Loyalty programs are at an inflection point. What began decades ago as simple stamp cards and frequent flyer miles has ballooned into a trillion-dollar global ecosystem. According to McKinsey, U.S. consumers hold more than 3.3 billion loyalty memberships across sectors, yet fewer than 50% of those memberships are active. The paradox is clear: programs proliferate, but true loyalty remains elusive.

Every program eventually reaches a moment when it must reinvent itself. Points lose value. Rewards feel stale. Customers disengage. Meanwhile, new technology—from artificial intelligence to mobile wallets—is reshaping how consumers earn, burn, and perceive value. A GLO Consumer Loyalty study found that for 90%+ of customers loyalty program is a major or positive factor in staying loyal, and those engaged members are ready to spend 52% more than casual customers. But every program eventually hits a plateau — a moment when reinvention becomes not optional, but existential.

This research by GLO team lays out a step-by-step blueprint for loyalty reinvention and draws on case studies from airlines, hotels, retail, QSR, grocery, and fintech. Each sector offers lessons: some about building habit, others about unlocking aspiration, and still others about creating trust through transparency.

The 7 Steps to Reinvention of a Loyalty Program:

1. Diagnose Before You Design

• Audit the economics and create a “Loyalty Program Health Dashboard” (liability, breakage, earn/burn ratios,active/inactive ratio, redemption velocity, etc.)
• Identify friction: hidden rewards, poor app UX, opaque terms.
• Segment members: high-value elites, casual dabblers, one-time joiners.

“If members don’t see value quickly, they disengage. That’s the death knell for any loyalty scheme.” – Peggy Roe, Chief Customer Officer, Marriott International

2. Define the Program’s North Star

Programs must choose a core ambition:

• Frequency engine → drive more visits.
• Share-of-wallet mover → capture more spend per customer.
• Acquisition magnet → bring in new members.
• Margin stabilizer → optimize demand with dynamic rewards.

3. Rebuild the Value Equation

• Earn side: move to spend-based, layer accelerators (co-brands, subscriptions).
• Burn side: expand “good” low-cost redemption options, add cash+points, guarantee premium inventory.

“We learned that waiting kills loyalty. Small, frequent wins create habit.” – Brady Brewer, CMO, Starbucks

4. Make Status Matter

• Add choice benefits at milestones.
• Pull elite-style perks into mid-tier to hook rising customers.
• Replace symbolic perks with tangible, bookable value.

5. Build Partnerships that Matter and Increase Frequency or Memories

• Daily earn: rideshare, grocery, fuel, coffee.
• Aspirational burn: luxury hotels, business-class flights, live events.
• Two-way partnerships so progress feels cumulative.

6. Modernize the Stack

• Real-time ledgers, unified IDs, AI-driven recommendations.
• Integrate benefits into the booking flow—no separate websites.
• Measure engagement health, not just membership counts.

7. Communicate, Test, Iterate

• Announce changes early; grandfather fairly.
• Publish “what’s better now” side-by-sides.
• A/B test redemption pricing and tier thresholds.

Case Studies on Loyalty Program Transformations: 

Airlines: Air Canada Aeroplan (Full Relaunch)

The problem: Old Aeroplan carried high carrier surcharges, confusing charts, and limited flexibility—great for hackers, frustrating for normals.

What they changed (2020 relaunch):

• Clearer award logic: distance- and zone-based partner charts with transparent pricing; eliminated carrier-imposed surcharges on redemptions.
• Aspirational, but attainable: one-way stopovers for a small points top-up—a distinctive feature that made complex trips feel “deluxe” without huge balances.
• Family sharing: pooled balances so households redeem sooner, increasing perceived velocity.
• Huge partner web: dozens of airline partners, enabling “anywhere to anywhere” itineraries.
• Status & vouchers: priority rewards and eUpgrade integration gave elites tangible, bookable value (not just soft perks).
• Fintech flywheel: multiple co-brand issuers and strong transfer partnerships increased earn velocity.

Why it worked:
They fixed redemption pain (no surcharge shocks), created high-wow but bookable awards (stopovers), and pushed more members into the ecosystem via partners and pooling—improving both satisfaction and liability turn.

Result: Aeroplan membership hit 7 million active members post-relaunch, with redemptions up 13% YoY.

Steal this:

• If you can’t lower headline prices, remove junk fees and add one signature redemption perk that feels luxurious but is cheap to deliver (routing logic > cash).
• Add pooled accounts or family sharing to accelerate first redemption—nothing drives stickiness like a first win.

Hotels: IHG One Rewards (Tiering + Choice Benefits)

The problem: Prior structure felt generic vs. competitors; benefits were thin in the moments guests cared about (check-in, breakfast, upgrades).

What they changed (2022):

• Tier reframe: clearer ladder—Silver, Gold, Platinum, Diamond—with thresholds that match stay realities.
• Milestone Rewards: at every 10-night step (from 20 to 100 nights) members choose benefits—confirmable suite upgrades, lounge membership, food & beverage credits, bonus points.
• Breakfast benefit: a real, high-salience perk for top tier on qualifying brands.
• App & service flow: benefits are selectable and trackable—less “ask at the desk,” more “it’s in my wallet.”

Why it worked:
Choice benefits turned an abstract status into personalized value at predictable moments, boosting perceived fairness and making mid-tier progress feel rewarding.

Result: IHG reported 30% growth in active app users within a year of relaunch.

Steal this:

• Add choice at milestones so different travelers self-optimize (road warriors choose upgrades; families choose F&B).
• Surface benefits in the booking path and pre-arrival flow; benefits that aren’t seen don’t drive behavior.

Retail (Coffee/QSR): Starbucks Rewards (Habit Engine)

The problem: Guests came often but spent unevenly; the brand needed stronger digital ordering adoption and tender loyalty.

What they changed (multi-year evolution):

• Stars as micro-currency married to the app wallet; order-ahead and stored value earn accelerators.
• Frequent redemption ladder: low-threshold items (brew/espresso modifiers) up to premium drinks—members redeem often, not just “someday.”
• Always-on gamification: Double Star Days, streaks, challenges—habit formation, not just points.
• Ecosystem partners: co-earn with airlines/financial brands and periodic subscription trials to widen the funnel.

Why it worked:
It maximized frequency mechanics: fast earn, frequent small wins, and a native app journey that collapsed friction while capturing payment margin (stored value).

Result: Rewards members now account for ~60% of U.S. sales.

Steal this:

• Build a ladder of wins (several redemption price points under your median basket).
• Tie the richest earn to the behaviors you want (mobile order, wallet load, direct channel).

QSR: Domino’s Rewards (From Order-Based to Spend-Based)

The problem: Old “per order” earn didn’t track with ticket size and left light users waiting too long for a reward.

What they changed (2023 overhaul):

• Spend-based earn replaced per-order accrual—fairer and easier to explain.
• More reward tiers (small sides to full pies) so members redeem earlier and more often.
• Broader eligibility across channels and item types to remove dead ends.
• Promo moments (e.g., “Emergency Pizza”) that doubled as acquisition stunts into the program.

Why it worked:
Earlier first redemptions lift retention; spend-based earn stops over-rewarding low-margin orders and aligns cost to value.

Result: Domino’s Rewards membership jumped by 40% in six months.

Steal this:

• If your basket varies, switch to spend-based earn and add a very low redemption rung to pull newbies across their first win within 2–3 purchases.

GLO Loyalty Program Reset: An Implementation Playbook:

Think of a loyalty reset not as a one-off project but as a 16-week sprint—part strategy lab, part design studio, part road show. The brands that win treat each phase like a milestone launch, with clarity of purpose and a touch of theater.

Weeks 0–4: Diagnose & Draw the Guardrails

• Run the numbers like an investor. Model liability under multiple pricing scenarios and establish clear floors and ceilings for dynamic redemption.
• Pick two “wow” factors. One should be mass-appeal (think free coffee), the other elite (think suite upgrade). These become your calling cards.
• Write the migration playbook. Spell out how members will be grandfathered, matched, or transitioned—ambiguity here is where trust dies.

Weeks 5–10: Prototype & Partner Up

• Bring rewards into the app flow. Launch a live redemption shelf with cash+points and irresistible low-tier options.
• Choose partners strategically. Lock in two or three “daily earn” allies (coffee, ride-hail, grocery) and at least one aspirational partner (luxury travel, premium dining).
• Build choice into the system. Configure milestone rewards so members can pick what matters most—because personalization is the new currency.

Weeks 11–16: Pilot & Tell the Story

• Test like a tech startup. A/B your pricing bands and measure “time-to-first redemption” as your North Star.
• Show the before and after. Publish side-by-side comparisons so members see exactly what’s better.
• Open the gates. A generous status-match window signals confidence and invites competitors’ customers to test-drive your new program.

Metrics That Matter on Day One

• Velocity: Time-to-first-redemption (TFR) and redemptions per member per month.
• Channel control: Percentage of bookings or transactions through direct channels.
• Health check: Liability age and breakage trend—healthy programs show smooth burn, not spikes.
• Experience index: Net Promoter Score or Customer Effort Score at three touchpoints: earning, redeeming, and benefit delivery.

Quick Pattern Library: Steal What Works

• Signature perks: Aeroplan’s stopovers; hotels’ guaranteed late checkout.
• Choice benefits: IHG’s milestone reward picks.
• Low-tier redemptions: Starbucks’ stars-for-shots model.
• Fair earn math: Domino’s spend-based tiers.
• Partnership flywheel: Uber + Aeroplan, Tesco + fuel.
• Frictionless UX: Wallet nudges—“You’re 120 points away from X.”
• Transparency: Delta’s 2023 backlash showed the cost of opacity.

Loyalty 2.0: The Three Truths

Revamped programs thrive when members:

• Feel progress quickly.
• Redeem rewards easily.
• Enjoy one or two unforgettable perks that spark delight.

Air Canada’s EVP of Marketing & Digital, Mark Nasr, summed it up best during Aeroplan’s relaunch: “We had to admit we’d lost trust. The only way forward was to rebuild with transparency and give members rewards they could actually use. That honesty is what turned Aeroplan from a liability into an asset again.”

Source: GLO