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Designing the Best Currency for Your Loyalty Program

In: Loyalty Programs and the Currency Effect

Author

Listed:
  • Evert de Boer

    (Managing Partner, On Point Loyalty)

  • Xiao Yao Chin

    (Partner, On Point Loyalty)

Abstract

In Chapter 1 , de Boer and Chin introduced the currency effect: the gains offered by optimal use of loyalty program currencies. In this chapter, the authors provide guidance around the various parameters linked to selecting the right currency design. How should you award points? And what type of points should you award: with a transparent value or with an opaque value? Also, should your currency be weak or strong? And what are the rules you should consider (how much to give and how much to charge)? Offering a highly utile currency is inextricably linked to a well-balanced accrual structure and the long-term success of a loyalty program. The authors explore how to design and evaluate different accrual options and identify designs that best pursue the greatest currency effect. They also discuss the pros and cons of a cashback currency compared to an opaque currency.

Suggested Citation

  • Evert de Boer & Xiao Yao Chin, 2025. "Designing the Best Currency for Your Loyalty Program," Springer Books, in: Loyalty Programs and the Currency Effect, chapter 0, pages 21-47, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-78849-9_2
    DOI: 10.1007/978-3-031-78849-9_2
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