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Designing a Loyalty Program Concept: Everything You Need to Know

Stuck at the first step of designing your loyalty program’s concept? Our step-by-step guide explains the most important considerations to get you started!

Determining your loyalty program’s concept is one of the most crucial steps in the process of building and launching a loyalty program. For one, the initial blueprint impacts the look and feel of the program, which may seem obvious. However, the approach you go with will also affect how smoothly the implementation process flows.

It’s important to spend as much time as possible building up the core concept for the reward program before looking for a loyalty software provider. With a solid foundation and a lot of forethought, there will be a lower likelihood that you’ll need to change the loyalty logic post-launch. Not to mention your integration period will also be significantly shorter.

To get you started, here’s a detailed overview of the most important steps for the loyalty program concept — coupled with a handy inspirational worksheet.

Loyalty-program-concept-worksheets

Exploring the Program Structure 

When discussing the loyalty program concept, clients often cut right to the chase, talking about the various rewards they wish to offer or the various gamification elements they are planning to add. Even though these should definitely be covered, there are several critical elements that need to be defined first.

Geographies

This section is meant to specify your regional focus, including languages, the list of countries where the program is available, and corresponding currencies.

  • Define the list of countries where the program will be initially launched, as well as the regions where you plan to introduce it later on. 
  • You should specify which and how many languages the loyalty program will be available in. You can always start with your main audience and roll out other languages later, but this should be indicated in the concept phase.
  • Decide which currencies should be present in the loyalty program. This will impact important elements such as point value, currency conversion, and multi-currencies, so be sure to pay close attention to this step.
Antavo’s Loyalty Management Platform offers built-in modules to manage multiple currencies.
Antavo’s Loyalty Management Platform offers built-in modules to manage multiple currencies and effortlessly create a multi-language program.

Basic Structure

This section is meant to provide a high-level overview of how the loyalty program will operate. Later on, the features listed here will be detailed in the Loyalty Logic section. 

  • Specify the core system of the program: whether it has points, tiers (or both). Whether it has badges, challenges, VIP clubs, etc.
  • Provide a name for the program, as well as the name for all related features, including the name for the point currency or tiers. 
  • This section of the concept should define the basic values. For instance, how many points the baseline currency translates to (e.g. 1 AUD = 1 point), and how many points are required to reach a higher tier. 

Channels

The purchase channels your company operates in might be obvious for you, but they still need to be considered in the loyalty program concept. So make sure to detail which channels will be involved in the loyalty program, and whether you wish to integrate them to create an omnichannel loyalty program. If you’re planning to launch with multiple stages, specify both the initial channels and the channels that will be introduced in later stages.

Having an omnichannel loyalty program means two things: a consistent experience across all channels.
Having an omnichannel loyalty program means two things: a consistent experience across all channels, as well as user journeys that are intertwined across these channels.

Program Logic

This is the meat of the loyalty program concept, where you should plan out the most important features. Please keep in mind that the concept is always subject to change. You might sit down at the table with an idea, but technical limitations or something your team realizes during the implementation may require you to change things. Still, the more effort you put into your blueprint, the smoother the overall process will be.

Point Logic

Loyalty points are a tried-and-tested loyalty program component. Even though you can run a reward program without them, many companies incorporate them because they offer plenty of value and opportunities. Naturally, what looks simple on the outside requires a lot of sophisticated planning on the inside.

  • As mentioned earlier, you need to think of currency conversion, or in other words, how many points are given for each included currency.
  • Point earning should come with certain conditions (what qualifies a member to earn points, are they redeemed instantly or after a pending period, etc). 
  • A certain rounding logic should apply to the points (floor vs. ceiling, item-level vs. order level).
  • Specify how product cancellation and product returns will affect point collection.
  • You should calculate how many points should be awarded for completing any soft actions (such as referring a friend, completing a profile or survey, etc).
  • This is the part where you need to define how many points each reward will cost.
  • High-tier memberships or limited-time holiday campaigns often double or triple the points collected with purchase. This heavily impacts the point ecosystem, so be sure to consider these types of bonus point campaigns well in advance.
  • Be sure to introduce point expiration to ease point liability.
Engaging customers outside of the buying cycle can foster long-term commitment to the brand.
Engaging customers outside of the buying cycle can foster long-term commitment to the brand. This is what Bergzeit did by integrating the Strava tracking app, so they can reward customers for their physical activities in the great outdoors.

Tiers

Although not every business wants to include tiers in their loyalty program, they are worth considering. They not only spice up the concept, but also add long-time engagement to the mix. Not to mention top tiers give members an extra layer of exciting privileges, making it less likely that they will abandon you and head to your competitor’s store. Adding tiers requires the following steps in loyalty program concepting:

  • First, indicate how many tier levels you would like to have. Three is the default, but you can go up to five or six. Also, would you like to have invitation-only VIP tiers for influencers or top-spenders?
  • Specify whether tiers are based on money spent or points collected. 
  • Define the point/spend range for each tier.
  • Just like with points, you should decide on expiration for tiers. In some cases, you may prefer to offer lifelong tier memberships.
  • If tiers expire, it means customers will be downgraded. Describe what the downgrade process will look like. For instance, will customers be downgraded by one level, or start again from the lowest level? Also, make sure to properly notify members in advance and clearly advertise how tier expiration works to avoid frustrating your customers.


Tiers are a truly fascinating topic in loyalty programs. Discover more about this approach from our Customer Loyalty Minutes video.

Rewards & Benefits

Besides Loyalty Logic, the section dedicated to the incentives is the most important for any loyalty program concept. Remember, the end results may slightly differ from your initial vision, but planning out the reward system is necessary nonetheless.

Rewards

Gifts, coupons, and other benefits are the jewels of your loyalty program, so make sure that they shine the brightest. In terms of concept planning it means the following:

  • If it’s a coupon or voucher, describe its monetary value. Or, if it’s a non-monetary reward, describe its characteristics and focus on the benefits.
  • Clearly indicate any condition that has to be fulfilled in order to redeem the reward, such as a minimum order value, time period, or the purchase of a particular product type.
  • Specify the validity (expiration date) of the reward.
  • Decide whether the reward can be claimed multiple times, will be permanent or will be available for a limited time as a one-off reward. 

Tier benefits

If you plan to have tiers, you should list all of the benefits associated with each tier. The best practice is to create a table that visually showcases tier names, values, and conditions. Some benefits should be available for all tiers, while the most desirable or prestigious incentives should be reserved for your highest-tier members only.

To get an in-depth look at your options for designing rewards, download our comprehensive ebook.
To get an in-depth look at your options for designing rewards, download our comprehensive ebook.

Processes (User Journeys)

Loyalty programs consist of a variety of user journeys, from gamified profiling to in-store identification. These examples are generally for more seasoned programs, however. The two most important journeys you should include in the concept phase, without a doubt, are the enrollment and opt-out processes.

The enrollment process

Enticing customers to join the program is one thing, but you need to ensure that the registration process is smooth and painless.

  • Describe how a customer with an existing account can join the loyalty program.
  • Define how a customer who does not have an account can join the loyalty program.
  • Specify any type of data that you would like to collect during enrollment. The best practice usually is to keep this list short intentionally to save time for the customer, and use gamified surveys to collect additional data later on. 

The opt-out process

Letting customers leave the loyalty program is a necessary evil. Therefore it needs to be treated with the same care as any other part of the rewards program. In your concept blueprint, describe the steps that a loyalty member will have to take in order to remove themselves from the loyalty program. This can include, for example, providing feedback or selecting a reason why they’re leaving.

Don’t forget to make the enrollment process brand-themed to create a ‘Wow’ factor.
Don’t forget to make the enrollment process brand-themed to create a ‘Wow’ factor. Kellogg’s Family Rewards does this exceptionally well.

Challenges & Campaigns

A healthy loyalty program runs campaigns on a frequent basis. These are meant to ensure that customers continually have goals and incentives close by, even if they aren’t necessarily planning to make a purchase.

Challenges

Challenges are a series of actions members have to complete in order to earn a reward.

  • List all actions that will have to be completed in each challenge.
  • Specify the number of times a specific action has to be repeated to complete each challenge (e.g Log in five times within one week).
  • Specify what prize customers will receive when they complete the challenges.
  • Specify whether challenges are one-off or can be repeated after the first completion. 
  • Decide whether challenges will be permanently available, or for a limited time only (in which case, you should also specify the time frame).

Loyalty campaigns  

Campaigns are limited-time or segment-specific events that enrich the core experience by offering double points, instant rewards, or other perks. In your loyalty program concept, list any loyalty campaigns that you will want to launch right after the program goes live.

Challenges can come in all shapes and forms, but they can be made to suit a wide range of verticals.
Challenges can come in all shapes and forms, but they can be made to suit a wide range of verticals.

Reporting

Reporting is often overlooked during the loyalty program concepting phase. Bear in mind: this is something you have to define during the implementation period, and not after launch. Why? Because it involves sharing the data points relevant to the information you wish to monitor with your loyalty tech provider. You have to gauge the performance of your loyalty program from day one, and not factoring in your reporting capabilities means you will miss out on important statistics.

Antavo’s Loyalty Management Platform allows you to access customizable dashboards to visualize your KPIs and identify new trends.
Antavo’s Loyalty Management Platform allows you to access customizable dashboards to visualize your KPIs and identify new trends.

Bring Your Loyalty Program Concept to Life With Antavo

Once you have your concept outlined, the next step should be to look for a loyalty technology provider who has the capabilities to turn your ideas into reality. If you’re interested in sophisticated loyalty solutions accompanied by robust APIs, then make sure to give Antavo a shot. Just feature us in your RFP, or book a demo

And don’t forget to download our worksheet to kickstart concept planning for your loyalty program!

Loyalty-program-concept-worksheets

Giulia Filoso

Giulia is the head of Antavo’s Customer Success department. She has amassed vast knowledge regarding the needs and perspectives of various businesses. She also serves as a guardian angel during the implementation process.

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