Glossary
What is a loyalty programme?
A loyalty programme gives customers something for coming back. They build up credit as they buy, and once they have enough, they get a reward. Having a clear rule is what makes it a programme rather than an occasional favour.
Also called: Rewards programme, Customer loyalty scheme.
Almost every business gives something away to keep customers. A loyalty programme is what you have when that giving becomes a rule instead of a judgement call.
Why the structure matters
An owner who occasionally comps a coffee for a regular is being generous. It costs the same as a programme and buys much less, because the customer cannot plan around it. A programme is legible: the customer knows what earns credit, knows what the credit is worth, and can count. That countability is most of the behaviour change.
The three decisions
Every programme, however it is dressed up, comes down to what earns credit, how much credit a reward costs, and what the reward is. Everything else is presentation.
Related terms
- StampOne step towards a reward, earned by buying something the business has chosen.
- PointsLoyalty credit that counts the money spent, rather than the things bought.
- RewardWhat a customer unlocks on reaching a stamp or points threshold.
- Redemption rateThe share of issued rewards or vouchers that customers actually use.