REWARDS PROGRAM MANAGEMENT SOFTWAREREWARDS PROGRAM SOFTWARE

WHAT IS THE DIFFERENCE BETWEEN REWARD LEVELS AND TIERS?

REWARD LEVELS

Think of reward levels like rungs of a ladder. Each rung represents a unique reward, with each higher rung representing a more attractive reward than the lower. As customers earn more points, they become eligible for those higher-level rewards. This simple strategy accomplishes two goals. At the lower levels, customers looking for immediate gratification can claim attainable rewards rather quickly. At the same time, the desire to receive one of the higher, more attractive rewards motivates customers to return more often and consolidate more spend with your business.

REWARD TIERS

Reward tiers extend that concept even further. Now, in addition to rewards offered at different levels of attractiveness and attainability, you can add tiered levels of recognition. Think of a reward tier as another rewards program, or in our analogy another, better ladder, that only select members can participate in. Depending on your business, higher tiers can be structured as premium programs requiring buy-in or as achievement programs based on spend, visits, or other thresholds. Preferred Patron™ automatically monitors consumer activity and can advance or demote members according to your program logic.

STRUCTURING YOUR REWARDS

Our representatives work with you to identify which rewards fit lower levels versus higher levels, how many levels your program should include, and whether introducing tiers makes sense for your business and objectives. We help you visualize the actual cost of each reward to you, the perceived value of those rewards to your customers, and the break-point for each reward. Break-points reflect the amount of spend and/or visits required before each reward is made available, along with the resulting give-back percentage.

TYPES OF REWARDS

There are three core types of rewards: internally procured rewards, instant-download digital rewards, and monetary discounts. By creating the right blend of rewards from these categories, you can design a compelling rewards structure for your business.

INTERNALLY PROCURED REWARDS

Internally procured rewards are derived from your own products and services. They are often the most economical reward options because your acquisition cost is far less than their perceived value to customers. This helps keep the overall cost of your rewards program lower while increasing ROI potential. They also self-promote your own products, services, and brand, and can be redeemed in person to drive additional traffic and bounce-back opportunities.

INSTANT DOWNLOAD REWARDS

Instant-download rewards are digitally fulfilled third-party rewards such as Amazon® shopping codes, Apple® Music, movie tickets, concert tickets, Visa® prepaid cards, airline tickets, and e-gift cards to major retailers including Starbucks®, Macy's®, eBay®, Best Buy®, and Airbnb®. Although these externally procured rewards are more expensive than self-funded incentives, they diversify the catalog and broaden the appeal of your program.

MONETARY REWARDS

Monetary rewards are common in rewards programs. Examples include 10% off or $5 cash back. While simpler than product- or service-based catalogs, they can still perform well when customers perceive them as valuable. Preferred Patron™ includes provisions for handling monetary discounts, whereby cash-back or percentage discounts can be banked in a customer-associated spending account for future use rather than being consumed instantly at checkout. That approach can preserve stronger bounce-back opportunities.