Loyalty glossary · 1. Program mechanics and currency (40)
Base Earn
Base earn is the default rate at which a loyalty programme awards points, miles, or cashback for eligible activity before any bonus, multiplier, or status accelerator is applied. It sets the baseline value of membership and the reference point against which every advertised earning opportunity should be judged.
Base earn is the default rate at which a loyalty programme awards points, miles, or cashback for eligible activity. It is the number that applies when no bonus, multiplier, or status accelerator is in play. Programmes often bury it beneath limited time offers and category bonuses, but it is the only rate that holds across every transaction.
The base rate sets the denominator for every advertised earning opportunity. A bonus is only meaningful as a percentage above base, not as an absolute number. A programme that leads with triple points is saying nothing useful until the member knows what those points are triple relative to. A low base makes a small bonus look larger than it is.
Take two programmes. The first awards 1 point per dollar as base and 3 points per dollar on dining, so the dining rate is a 200 percent bonus over base. The second awards 2 points per dollar as base and 3 points per dollar on dining, for only a 50 percent bonus. The advertised 3 points is identical in both, but the base determines whether the offer is aggressive or trivial.
Base earn also shapes redemption economics. A programme that awards 1 point per dollar and values each point at 1 cent on redemption gives back 1 cent per dollar, a 1 percent rebate. If the base earn is 2 points per dollar with the same 1 cent redemption value, the rebate doubles to 2 percent.
The base earn is the number to compare first. Sign-up bonuses and category multipliers come and go, but base earn persists as long as the member holds the product. A programme that understates base earn while advertising inflated bonuses is not being generous; it is using confusion as a pricing strategy.