The Hidden Cost of Brand Loyalty Programs

Loyalty programs cost companies billions — but what if most of that spend is wasted? This episode drills into a surprising study of 14 major U.S. retailers showing that fewer than 15 percent of loyalty-program members generate 80 percent of the program's cost. Lucas and Luna explore how American Airlines inadvertently created a liability with AAdvantage miles, how Starbucks Rewards drove a 9 percent same-store sales lift in 2025 by restructuring its tiers, and why the best loyalty programs are actually designed to lose the bottom half of members. If you are a CMO debating whether to launch or overhaul a loyalty program, this episode gives you the one metric you need to track: cost-to-serve per tier. Specific, contrarian, and immediately actionable. #LoyaltyPrograms #CustomerRetention #StarbucksRewards #AmericanAirlines #AAdvantage #MarketingStrategy #CMO #CustomerLifetimeValue #CostToServe #TieredLoyalty #BrandLoyalty #RetailMarketing #FexingoBusiness #BusinessPodcast #MarketingPodcast #TheCMOPodcast #RevenueGrowth #CustomerBehavior Keep every episode free: buymeacoffee.com/fexingo