Designing the Best Currency 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 2 in Loyalty Programs and the Currency Effect, 2025, pp 21-47 from Springer

Abstract: Abstract In Chapter 1 , de Boer and Chin introduced the currency effect: the gains offered by optimal use of loyalty program currencies. In this chapter, the authors provide guidance around the various parameters linked to selecting the right currency design. How should you award points? And what type of points should you award: with a transparent value or with an opaque value? Also, should your currency be weak or strong? And what are the rules you should consider (how much to give and how much to charge)? Offering a highly utile currency is inextricably linked to a well-balanced accrual structure and the long-term success of a loyalty program. The authors explore how to design and evaluate different accrual options and identify designs that best pursue the greatest currency effect. They also discuss the pros and cons of a cashback currency compared to an opaque currency.

Keywords: Loyalty program; Loyalty program design; Loyalty points; Cashback programs; Accrual; Redemption (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_2

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DOI: 10.1007/978-3-031-78849-9_2

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