Loyalty Program Economics: Points, Breakage & Member Value
Price a points catalogue, value the points liability and breakage, cost the program per member, measure member uplift without selection bias, design tiers, chart a redemption curve, calculate ROI and test a new earn rate, with every cell checked as you go.
The first lesson is free — no account needed.
About this course
A loyalty program economics course that runs the numbers of one fictional retailer's rewards scheme in a spreadsheet, for loyalty and CRM managers, marketing analysts, finance teams and students. You price the rewards catalogue as value and cost per point and compare the reward rate members feel with the cost rate the retailer pays, estimate breakage from closed cohorts and value the points liability, add up the program cost per active member and as a share of member sales, measure the member spend uplift without selection bias against look-alike customers, assign members to tiers and summarise the tier mix, follow issued points along a redemption curve until they expire, calculate ROI with the raw and the matched uplift and test three new earn rates side by side. The first lab is free.
Lessons
- Earn and Burn: What a Point Is WorthFree
- Points Liability and Breakage Pro
- What the Program Costs per Member Pro
- Member vs Non-Member Spend and Selection Bias Pro
- Tier Qualification and Tier Mix Pro
- The Redemption Curve over Time Pro
- Program ROI: Incremental Margin vs Cost Pro
- Changing the Earn Rate: A Scenario Model Pro