Loyalty Register glossary
Tier structure
The set of levels in a loyalty program, with the requirement to reach each one and the benefits each one gives.
A tier structure is the set of levels in a loyalty program, together with the requirement to reach each level and the benefits that come with it. It decides how members are grouped, what they have to do to move up, and how much more each step gives them. Structures vary widely: Starbucks Rewards has three levels (Green, Gold and Reserve), Sephora Beauty Insider has three (Insider, VIB at $350 a year and Rouge at $1,000), and Marriott Bonvoy has five elite levels above its base membership.
Updated · By Loyalty Register Editorial TeamRelated terms
What are the parts of a tier structure?
The number of tiers; the measure and threshold for each (spend, nights, visits or points); the qualification period; the benefits at each level; and the rules for keeping or losing a tier. The base tier matters too: it is where most members sit, so it needs enough value to keep them engaged, while still leaving visible reasons to climb.
How are the gaps between tiers set?
Usually as multiples of the tier below, based on how the program’s customers actually spend. Sephora’s Rouge threshold is about three times VIB’s; Marriott’s tiers step from 10 to 25, 50, 75 and 100 nights. Gaps that are too small make tiers feel meaningless; gaps that are too large make the next tier look out of reach, so members stop trying. A practical test is to plot the spend or activity of current members and see where natural groups and breaks fall.
How many tiers should a program have?
There is no single answer. Fewer tiers are easier to explain and cheaper to run. More tiers give more members a near goal, but each tier needs benefits that are clearly different from its neighbors, which gets harder as tiers multiply. Retail programs often use two to four levels; travel programs with very frequent customers often use more. The top tier is usually kept small, because its benefits are the most expensive and depend on being scarce.
What should you check?
Cost each tier’s benefits against the revenue of the members in it. Track the share of members in each tier over time, since a structure that worked at launch can become crowded as members learn the rules. Make each step’s benefit difference easy to state in one sentence. And make the requirements visible in the member’s account, with progress shown, so the structure works as a goal and not just as a table in the terms.