Most programmes should have fewer tiers

The argument

The register profiles 217 programmes, and 214 of them have known tier status. Of those 214, 112 run tiers. The first fact to weigh is that tiering is not spread evenly. All 61 airlines and all 18 hotels with known status run tiers. That concentration matches the mechanics of those sectors: a seat or a room is perishable, the marginal cost of filling it is low, and customers transact infrequently but spend heavily when they do. A status tier rewards share of wallet without discounting every booking, and the threshold can be set high enough to matter because the average transaction is large.

Those mechanics disappear in high-frequency, low-margin sectors. In grocery, 0 of 18 programmes with known status run tiers. In fuel, 0 of 12 do. In banking, 1 of 14 does. In restaurants, 2 of 22 do. In coalition programmes, 2 of 15 do. These operate where customers transact weekly or more often and where a status threshold set at a meaningful level is reached only by the same heavy users who were already profitable. A tier structure then becomes a second currency to communicate, track, and service, without adding earning frequency or differentiation. The retail split reinforces the point: 25 of 46 retail programmes with known status run tiers, while 21 do not. That is not a category where tiers are required; it is a category where some operators have copied airline mechanics into a purchase cadence that does not support them. The 112 tiered programmes should reduce their tiers to one or two levels or remove them entirely. A single earn-and-burn structure with clear redemption is simpler to explain and cheaper to maintain. Most tiered programmes outside airlines and hotels are carrying segmentation cost without the margin or frequency to earn it back.

The strongest counter-argument

Tiering is a retention tool, not an airline relic. A customer who has reached a tier has a sunk cost in the relationship and will consolidate purchases to protect that status. Even a two-tier structure can shift share of wallet among the heaviest customers, who often generate a disproportionate share of profit. Removing tiers simplifies operations but removes the only visible reward for disproportionate spend. A single earn-and-burn programme treats a customer who spends far more than another as identical, and the heavy customer notices. If the cost of running tiers is now mostly software configuration rather than printed cards and service desks, the marginal cost of an extra tier is low. The upside of retaining a high-value customer is high. This is strongest for programmes that already have frequent touchpoints and can personalise status benefits. For those operators, fewer tiers may underrate the emotional hierarchy that drives loyalty.

What would change our mind

The position would be wrong if the register's next full profiling cycle shows grocery, fuel, or banking programmes adopting tiers in the same proportion as airlines and hotels, and those additions persist. Specifically, if at least 9 of the 18 grocery programmes and at least 6 of the 12 fuel programmes with known status begin running tiers, and that status persists in the following two profiling updates, the sector evidence that tiers do not fit high-frequency categories would be reversed. That would mean grocery and fuel moving from 0 tiered programmes today to half or more of their known-status programmes running tiers. Such a shift would show that the absence of tiers in those categories was a legacy choice rather than a structural one, and the claim would fail.

What follows if we are right

A programme owner outside airlines and hotels should default to one tier or none. If you run a retail, grocery, fuel, restaurant, or banking programme with more than one tier, cut to a single earn-and-burn level unless you can show that your heaviest customers transact infrequently and your margin per transaction supports the cost of status differentiation. Use the budget freed by removing tiers to improve the core reward: faster redemption, lower thresholds, or better earn rates. If you run an airline or hotel programme, keep the tier structure that matches your inventory and booking economics, but still ask whether every tier is doing work. The burden of proof should sit with any programme that adds a tier where none of its sector peers need one.