Multiple Point Types in One Loyalty Program

Description

A single point currency has to do every job at once. It measures status, it pays for rewards, it funds partner offers, and every change you make to it lands on all of those at the same time. Being more generous to push one behaviour makes the whole program more expensive.

With more than one point type, each job gets its own currency. A purchase can earn several types at once at rates you set separately, and every type carries its own balance, expiry and reward list. There is no limit on how many types one program runs. What they never do is convert into each other, and that is exactly what keeps their economics apart.

Examples of strategic benefits:

• Status and value can move at different speeds: Recognise a member's standing with one currency and pay for rewards with another, so you can be generous with recognition without being generous with liability
• Contained campaign and partner cost: A campaign or partner currency carries its own expiry and its own reward list, so the cost stops when the campaign stops and partner funding stays traceable
• Sharper targeting: Campaigns can be targeted on a specific point type, including its expiry, so an expiry reminder reaches only the members holding that type
• Tier qualification stays under control: You choose which point type counts towards upgrade and renewal, so bonus and partner earning does not inflate members into tiers you did not intend
• Member facing balances stay simple: You choose which point types appear in which channel, so a member sees the balance that means something where they are rather than every balance at once, while your team reports on all of them behind the scenes

Designing the point type structure matters more than configuring it, because a second currency your members do not understand becomes noise rather than motivation. Memberson can help you decide which behaviours deserve their own point type and set the earning, expiry and redemption rules for each.

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Concept

Give your program more than one currency. A point type can qualify members for tiers, buy your rewards, or carry a partner's funding, and one purchase can earn several of them at rates you set separately. Each type keeps its own balance, expiry and redemption rules, so you can be generous where it builds loyalty and careful where it costs money.

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Execution

1. Decide what each point type is for and what it can be redeemed against
2. Set the earning rules per point type, including how many types a single purchase earns
3. Set which point type counts towards tier upgrade and renewal
4. Decide which point types the member sees in each channel, and report earning and redemption per point type internally

NOTE: point types are separate balances and are never converted into each other. A member cannot turn one type into another, and that separation is what keeps the economics of each type apart. It also means the types are not comparable, so showing them side by side is a design decision rather than a default.

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KPI

• Increase in the targeted behaviour rewarded by its own point type > 10%
• Reduction in point liability carried by the base program > 10%

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Please contact Memberson for further details about this best practice, examples and details around how to set this up in Memberson Loyalty CRM platform. Our Loyalty consulting experts can guide and help you to design, set up and execute on this best practice.