What are points in loyalty programs?

A point is a unit of currency that represents the amount of equity that a member has earned in a loyalty program. You can set up currencies for a loyalty program so that members earn points when they perform certain activities in the loyalty program. For example, every time a member makes a purchase, they earn 10 points for every $1 spent online and in retail stores, and five points for every $1 spent in outlets.

Points are used in a loyalty program:

• as currency. Members earn spendable points for their loyalty program-related activities, which they can redeem for rewards. The more points they have, the more currency they have to spend.

• as qualifying points for tier advancement. A member's tier level is determined by the number of qualifying tier points they have accumulated. Like spendable points, qualifying tier points measure a member’s level of engagement in a loyalty program, and are used to determine whether a member’s tier level should be upgraded on downgraded.

By rewarding your members with points, you encourage them to continue doing business with your brand into the future. And ultimately reduce the chance that they switch to a competitor.