Why brands are rethinking their loyalty programs—and what it takes to do it right.
In today’s loyalty landscape, change is not only inevitable—it’s often essential. As customer expectations shift and new technologies emerge, many brands are finding that incremental tweaks are no longer enough. A loyalty program redesign can be a strategic move to drive deeper engagement, retain relevance, and improve ROI. But how do you know when a redesign is needed? And how do you ensure the outcome delivers long-term value?
We spoke to loyalty and customer strategy leaders from ITA Group, FIS, and Phaedon to explore what drives loyalty program redesigns, how to navigate the process, and what metrics signal success.
Why Redesign? Understanding the Triggers
Brands typically initiate a redesign when they hit a performance plateau, or when shifting customer behavior reveals the program no longer aligns with strategic goals.
"For any given brand, several factors could drive the decision to redesign their loyalty program," said Max Kenkel, Senior Product Manager, Customer Solutions at ITA Group. "This could be due to declining engagement, customer dissatisfaction, a shift in strategic goals, competitive pressure, or the need to modernize technology infrastructure."
Mladen Vladic, Head of Products and Services, FIS Loyalty, shared a similar view: "Brands that decide to completely redesign their loyalty programs often do so because they realize the current program no longer supports their business objectives. This can stem from stagnant member growth, outdated technology, or a disconnect between the program and evolving customer expectations."
Katie Berndt, VP of Strategy & Research at Phaedon, added, "Brands redesign their loyalty programs for a variety of reasons, including better alignment with business strategy, customer expectations, and emerging industry trends. Often, it stems from a lack of differentiation in the marketplace or challenges with operational efficiency."
Incremental Changes vs. Full Overhaul
Deciding between a full redesign or incremental enhancements requires a careful assessment of goals, technology, and performance gaps.
"To determine if a brand should overhaul their loyalty program or take an incremental approach, start by assessing customer feedback, data analytics, and market trends," Kenkel explained. "If multiple areas—such as technology, value proposition, or engagement strategies—need improvement, a full redesign may be more effective."
Vladic recommended a phased approach: "I have always been a proponent of approaching a redesign in phases, with a clear understanding of what you want to achieve in each step. Sometimes small improvements can yield meaningful results without requiring a massive rebuild."
Berndt emphasized strategy fit: "The decision between making incremental changes or pursuing a full redesign should be based on how misaligned the existing program is with the future state vision. A clear framework for evaluation can help prioritize changes that align with long-term brand objectives."
The Role of Data and Metrics
Although many brands rely heavily on engagement data to drive decisions, some experts caution against siloed analysis.
Nate Thompson, VP of Analytics & Data Science at Phaedon, noted, "Effective program evaluation requires examining both behavioral and emotional loyalty indicators. It’s not just about transactional frequency or reward redemption rates. Brands should consider long-term metrics like customer lifetime value, net promoter score, and emotional attachment to the brand."
Incorporating Customer Feedback
Customer feedback is essential to avoid missteps and missed expectations in a redesign.
"If loyalty is the end outcome, customer satisfaction and perception of value are key metrics that should guide any redesign efforts," Vladic stated. "Brands should also look at feedback from non-members to understand why they haven't joined."
Berndt elaborated on tactical approaches: "Collecting feedback through multiple methods—one-on-one interviews, surveys, focus groups, and digital listening tools—helps brands identify both friction points and missed opportunities. The goal is to co-create the new program with the voice of the customer front and center."
Balancing New and Existing Member Needs
Redesigns must strike a balance: innovating for the future without alienating current members.
"To stay relevant long-term, the technology that supports the program must be scalable, flexible, and allow for continuous evolution," Vladic explained. "This includes personalization capabilities and modular design so that changes can be introduced seamlessly."
"When redesigning a loyalty program, it’s important to segment and analyze the needs of both current and potential members," Berndt advised. "The redesigned program should maintain familiar value elements for existing members while introducing new features that appeal to emerging segments."
Communication is Critical
Rollout communications can make or break the adoption of a new program.
"Always meet the customer where they’re at," said Vladic. "A personalized communication strategy, including email, app notifications, and in-store signage, helps ensure customers understand the new structure and benefits."
Berndt suggested pre-launch testing: "Before launching to the public, develop a phased communications plan that includes piloting with a subset of members. This allows the brand to gather feedback and refine messaging before scaling."
Measuring Success Post-Launch
Tracking the right metrics over time is crucial to determine the long-term impact of a redesign.
"Loyalty program redesign evaluation requires both qualitative and quantitative assessment," said Thompson. "Start with early adoption and usage metrics, but be sure to follow through with impact measures like revenue lift, retention, and brand advocacy."
Conclusion
Redesigning a loyalty program is a strategic undertaking that demands cross-functional alignment, strong data analytics, and customer-centric thinking. As our contributors highlight, success depends on more than just modern technology or trend alignment. It requires brands to listen to their customers, weigh strategic trade-offs, and ensure that loyalty remains a two-way value exchange.
For brands willing to do the work, the payoff is well worth it: a more relevant, differentiated, and impactful loyalty experience that deepens customer relationships and drives sustainable growth.