Constant Loyalty Program Changes Erode Loyalty

Over the past decade, airline loyalty programs have evolved a lot. I can't help but think about the impact of the changes on travelers' perception and understanding of the programs

Loyalty programs are hard to keep track of

Airline loyalty programs had a consistent value proposition over the last decade. It was easy to understand what you needed to keep your status once you were on the "hamster wheel".

It's a different story today. I don't understand how the average consumer is supposed to make sense of what's happening nowadays. Major changes were made to the program yesterday.

The loyalty point rewards program will be launched by American in the year 2023. The Loyalty Choice rewards program is no longer active. The Elite Choice rewards program ceased to exist in 2021. Does it make sense to change the program year after year?

It makes sense to change a loyalty program every year. I think it's a different story for consumers who don't like loyalty programs.

On a recent American Airlines flight, I sat in first class with two frequent flyers who were excited to share how much they fly, and how much they know about AAdvantage. They must have had a discussion about the program. The new Loyalty points system kicked in as of 2022, but neither of them understood it.

They have a lot of new changes to learn about now that they know the extent of the changes.

The termsimplified is used a lot when airlines send emails to members. You know what it is. It's not necessary to learn a new program every year.

I'm confused by this all. If you want to sell a product to someone, the most important thing is to make sure they understand what you are selling. Customer service surveys are sent out. I would love for airlines to send out pop quizzes about the program so they can get a sense of how much most members know about it.

There are a couple of other considerations

Let's make a few more points now that the above has been removed.

The first thing I said was that constant loyalty program changes erode loyalty. It is important to acknowledge that the objectives of these programs are different now. In the United States, airlines don't make a lot of money flying passengers, but they do make a lot of money from their loyalty programs and credit card agreements.

I think American's new Loyalty Points system is brilliant, since it encourages the behavior that's most profitable to the airline, which typically isn't actually flying passengers, but rather spending on credit cards

It's important that the phrase "correlation does not imply causation" is used in corporate America. There are a lot of people working at the airline and they make a lot of money. It is possible for people to show that what they are doing is successful by using metrics.

Some changes have made loyalty programs more profitable, but I don't think a lot of them move the needle. If a program needs to be changed a lot, then it's probably not very well thought out.

Bottom line

A lot of airline loyalty programs are being changed every year. Airline loyalty programs used to be hard to understand, but they wouldn't be changed every year.

Airlines want to change their program every year. You can't look at the value proposition of a program and expect it to stay the same for a long time. Loyalty seems to be on the table for a year at a time.

We have seen a lot of loyalty program changes in the last couple of years.