Glossary
What is a reward threshold?
This is how many stamps or points a customer needs before they get the reward, such as nine stamps for a free coffee. It is the most important number in your programme. It decides both what the programme costs you and whether people believe they can finish it.
Most businesses set this number by copying somebody else. That number encodes another venue’s margins and another venue’s visit frequency.
Two forces pulling in opposite directions
A higher threshold costs you less per reward and makes the finish line feel further away. A lower threshold is more motivating and gives away more, including to people who would have come anyway.
The check worth doing
Work out how many stamps a regular collects in a normal week. Then see how many weeks it takes them to finish. If it comes to more than about six weeks, most people quietly stop counting. A card nobody finishes costs you money and buys you nothing.
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.
- Gross marginThe share of a sale left after the direct cost of what you sold.
- Redemption rateThe share of issued rewards or vouchers that customers actually use.