Loyalty glossary

The mechanics

The rules a business can choose between, and what each one actually is.

• Loyalty program — a standing rule that a purchase gives something back to the buyer.
• Bonus — an umbrella word for anything earned by buying: points, a stamp, a reward.
• Point — a unit of balance earned on a purchase and spent against a later one.
• Stamp — a mark counting a visit or an item, where a full row earns a free item.
• Tier or level — a rank earned over time that carries a benefit while it is held.
• Cashback — a share of a purchase returned as value, expressed in money.
• Coupon — a named one-time offer, claimed by a customer and redeemed once.
• Referral — a reward paid for bringing a new customer who then buys.
• Welcome bonus — a balance credited at signup to make the second visit likelier.

The numbers

The settings that decide what a program costs and whether anyone bothers with it.

• Earn rate — how much spending produces one point.
• Redemption rate — what one point takes off a later bill.
• Give-back — earn rate multiplied by redemption rate: the true cost as a share of the sale.
• Minimum redemption — the smallest balance that may be spent.
• Expiry — the period after which unused balance is removed.
• Threshold — the amount of lifetime earning that moves a customer up a level.
• Liability — the total unspent balance a business owes its customers.

The measurements

What a business reads afterwards to decide whether the program is working.

• Retention rate — the share of customers who come back in a given period.
• Churn — the opposite: the share who stop coming.
• At-risk customer — a regular whose gap since the last visit has grown well past their normal one.
• Basket or average check — the amount spent per visit.
• Visit frequency — how often a customer returns.
• Redemption rate (of a campaign) — the share of issued coupons actually used.
• Lifetime value — total margin a customer produces across the whole relationship.

The plumbing

Terms that come up once a program is connected to a till.

• POS — point of sale: the cash register system where the bill is taken.
• POS integration — the register talking to the loyalty platform directly.
• Ledger — the append-only record of every point issued and spent, which is never edited.
• Void — a cancelled bill, reversed on the loyalty side by a compensating entry.
• Idempotency — the guarantee that a retried request does not award the same points twice.
• Member card — the customer’s identity, shown as a QR code, a barcode or an NFC tap.

Common questions

Read next

• Loyalty programsPoints, stamps, levels, discounts, cashback, coupons and referrals — what each mechanic rewards, who it suits, and how to pick one for a business in Armenia.
• Bonus programsHow each kind of bonus program works and which one fits a business: points on spend, stamp cards, levels, coupons and referrals. Run any of them on One Bonus.
• Discount programsWhen a discount beats points, when it does not, and how to pick a percentage or a fixed amount. Discounts on One Bonus are recorded, so a campaign can be measured.
• CashbackWhat a cashback program returns, how the percentage is set, and where cashback beats a straight discount. Run cashback as points on One Bonus and measure what returns.
• Stamp cardsHow a digital stamp card works, how many stamps to ask for, and why paper punch cards leak. Every stamp on One Bonus is recorded against the customer, not the card.
• Points systemHow to set an earn rate, what a point should be worth at the till, and how expiry and minimum redemption change behaviour. The arithmetic behind a points program.
• Tiers and levelsHow a tier program lifts spend, where to put the thresholds, and what each level should actually give. Levels on One Bonus rank on lifetime points, not the current balance.
• CouponsWhen a coupon works better than a standing discount, how to price one in points, and how to stop a coupon being used twice. Coupons on One Bonus are redeemed once.