Loyalty glossary · 1. Program mechanics and currency (40)
Earn rate
Earn rate is the number of points or rewards a member receives for a defined unit of spend, activity or qualifying behaviour.
Earn rate sets how quickly a member receives points for a qualifying action. It is the points per unit of spend or activity, and it determines the pace at which a member reaches a redemption balance.
The unit must be explicit. A programme can tie earning to currency spent, a transaction, a distance flown, a completed task or another activity. If the unit changes across channels, the member needs a clear rule for each channel rather than one headline rate that hides the difference.
Promotional earn changes the ordinary rate for a defined offer or behaviour. It can accelerate acquisition or reactivate a member, but it also changes the points liability created by the qualifying activity. The programme should keep the base rule visible when a promotion is active.
Cash back expresses a related incentive in money rather than points. A points-based incentive creates a separate currency whose redemption value must be explained. Comparing the earn rate alone does not compare the two offers because the member still needs to know what the earned value can buy.
Interline arrangements show why the source of activity matters. When a transaction or journey involves more than one participating operator, the earn rule must identify which activity qualifies and which party funds the points. The rate is incomplete if the settlement rule is hidden.
Redemption closes the loop. A high earn rate can build a balance quickly, but the member experiences the programme through the reward available for that balance. The useful measure is the relationship between qualifying activity, points received and the redemption path presented to the member.
A member earning 2 points per dollar on 400 dollars of spend finishes the month with 800 points. At a point value of 1 cent that is 8 dollars of reward liability, which is why the earn rate and the point value have to be set together rather than one at a time.