Decisions · Layer 1
How many tiers should your loyalty programme have
Use the smallest number of tiers that creates distinct behaviour and benefits. Add a tier only when a real segment needs a different promise and the programme can fund it.
Use the smallest number of tiers that creates distinct behaviour and benefits. Add a tier only when a real segment needs a different promise and the programme can fund it.
## The decision boundary The right tier count follows the number of meaningful behaviour changes the programme can reward. Each tier needs a threshold, benefit, eligibility rule, and path back.
## The options
### Single status Choose this when participation and recognition are the objective. The cost is additional operating complexity.
### Progressive tiers Choose this when members can see a credible next action. The cost is more measurement and exception handling.
### Segmented status Choose this when distinct buying units need different promises. The cost is a stronger funding and review obligation.
## What it costs you The currency is liability, margin, engineering time, operating capacity, or member trust. In a hypothetical illustration, 2 points per dollar on 400 dollars of spend creates 800 points. At a hypothetical 1 cent value, that is 8 dollars of liability. Ten comparable cases therefore represent 80 dollars of stated value.
## How to decide 1. Name the behaviour or obligation the rule must control. 2. Identify the independent evidence that proves the event. 3. Price the member, operating, and liability cost of each option. 4. Choose the least complex control that protects the least reversible outcome. 5. Set the evidence that would cause a later review.
## What breaks The failure mode is a rule that measures its own success. Keep source evidence, eligibility, issuance, adjustment, and fulfilment separately observable. Revisit the recommendation when the balance has no meaningful value or the event cannot be independently verified.