Loyalty Programs · The economics · Component
The cost
Redemption cost plus running cost per period — the second of which is consistently forgotten.
The deliverable
What it is
The reward cost is visible. Administration, communication, systems and the support contacts the programme generates are not, and together they are frequently comparable.
A programme with a modest reward cost and a full-time administrator is more expensive than its reporting suggests.
One level in
What it is made of
Each element is a constituent part of the component. Follow one to see the attributes it carries.
The running cost
What operating the programme costs.
3 attributes: Operating cost · Staff time · Support contacts
LearnThe total
What the programme costs in full.
3 attributes: Total cost · Incremental margin · Last calculated
Learn
A programme with modest rewards and a full-time administrator is more expensive than its reporting shows.
The other components in the economics
The liability
Points earned and not yet redeemed, valued — an obligation that grows with the programme and appears long after the decision.
LearnThe return
What the programme produces, against what it costs — measured incrementally rather than by comparing members with non-members.
Learn