Picking the right points system for your loyalty program

Henry Bewicke

Content Writer

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3 minutes to read

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One of the best things about setting up your own, in-house loyalty program is choosing the rewards. You can pick the perfect incentives to encourage long term brand loyalty among your customers.

But to stand the best chance of doing so, your rewards really have to be spot on. Generic rewards are still rewards at the end of the day. But personally-customized rewards are what really catch customers’ attention.

The difference between points and rewards

First, it’s important to understand the difference between rewards and points.

They ultimately serve the same purpose - encouraging customers to come back and spend more with a particular brand. But all good loyalty programs allow customers to save their points and use them as they wish.

‍Loyalty rewards: Specific rewards given to customers when they reach milestones or complete certain actions.

Loyalty points: Points or currency given to customers when they complete certain actions. These points can be saved and exchanged for rewards (See how Uber did it)

The key difference here is being able to use loyalty points to buy other rewards. This independence is a big deal for many consumers.

Setting the value of your points

For points and rewards to be enticing to customers, they have to have value. This doesn’t mean they have to be worth a lot in real currency. But they do need to be worth enough to catch your customers’ attention.

There are a couple of options for setting the value of your loyalty points. You could set them as a real-world currency, or you could create your own currency.

Each approach has its pros and cons:

Real-world currency

Advantages:

Customers can see exactly how much money they’ve earned for each action
They can also easily see how much they need to save in real money to afford a specific reward

Disadvantages:

Rewards shown in a real-world currency can be underwhelming

Custom currency

Advantages:

Can be fully-customized to suit your business
Reward values can be customized for each item

Disadvantages:

Branding your own in-store currency can require additional planning

Branding your currency

Many brands opt to create their own in-store currency. But the amount of branding applied in each case can vary massively.

Take ‘V-Bucks’, the in-store currency used in Fortnite, for example. While they’re not technically loyalty points, they serve pretty much the same purpose.

Players can win V-Bucks from gameplay or purchase them online using real money. Their V-Bucks can then be spent on upgrades and various other in-game features.

Because they’re used so widely in-game, V-Bucks have built up a certain prestige of their own. They’ve become an important part of the Fortnite brand and they give the developers full control over the value of rewards in game.

The same is true when it comes to branding your own loyalty program/points. ‍

A solid brand and well thought-out points profile can help add legitimacy to your operation.

Your key customer personas should also play a big role in guiding your branding in this sense. When it comes to building trust and loyalty among your customers, you want them to feel like your brand understands them.

Make sure you’ve worked out a solid branding strategy before you get your loyalty program off the ground. You don’t have to brand it at all if you don’t think it fits your business. Just make sure you’ve assessed the options beforehand.

So, to recap.

The main things to keep in mind when choosing your loyalty program points system are:

How you want your loyalty rewards and loyalty points to relate to one another.
Which loyalty point format you will use (real currency, points, a combination of the two)
How you want to brand your loyalty scheme and points, if at all