Designing an Optimal Currency Redemption Strategy for Your Loyalty Program

Evert de Boer () and Xiao Yao Chin ()
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Evert de Boer: Managing Partner, On Point Loyalty
Xiao Yao Chin: Partner, On Point Loyalty

Chapter Chapter 3 in Loyalty Programs and the Currency Effect, 2025, pp 49-75 from Springer

Abstract: Abstract Access to attractive rewards is perhaps the most important contributor to the allure of any loyalty currency. Chapter 3 is dedicated to everything to do with awards. How do you price rewards and how do you decide which rewards to include? De Boer and Chin evaluate the pros and cons of different types of rewards. They introduce the important concepts of preferentiality and equivalencyequivalency, which help to define how attractive a currency is to members and determine the extent to which reward providers are compensated for the products and services they offer to the loyalty program. The authors offer an exploration of how to calculate the cost per point, which is an important input both for the P&L as well as the selling price per point.

Keywords: Loyalty program; Loyalty program design; Rewards; Cost per point; Redemptions; Preferentiality; Equivalency (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-78849-9_3

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DOI: 10.1007/978-3-031-78849-9_3

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