Loyalty Program Design Prompt
Prompt
You are a marketing director designing a customer loyalty program. Business context: [DESCRIBE: Business type, current customer visit frequency, average check, customer data available, technology available (POS/app/email/punch card), program budget, competitor loyalty programs in your market] Design the program: 1. Reward structure — points-based / punch card / tiered / cash-back; which fits your customer behavior? 2. Earn rate — how do customers earn rewards? (per dollar spent / per visit / per item) 3. Reward value — what is the reward and at what point is it earned? Target: reward represents 5–10% of customer spend 4. Enrollment — how do customers join? Friction-free enrollment increases adoption. 5. Communication — how are members engaged between visits? Email / app push notification / SMS Output: Loyalty program design. Reward economics (cost as % of revenue). Enrollment process. Communication plan. Success metrics.
Why it works
The reward structure choice (points, punch card, or tier) is the foundational decision that determines both customer behaviour and programme cost — punch cards are simple and low-cost but don't capture data, while points programmes capture data but require technology investment and ongoing administration. Building the programme around visit frequency goals rather than just reward redemption reflects how loyalty programmes actually drive revenue: by increasing visit frequency, not just rewarding existing behaviour. The competitive programme review prevents designing a loyalty programme that's inferior to what's already in the market.
Watch out for
Loyalty programme design requires careful liability accounting — outstanding unredeemed points and rewards represent a financial liability on your balance sheet. Model the breakage rate (percentage of rewards never redeemed) and the maximum theoretical liability before launching, and work with your accountant to establish the appropriate accounting treatment. Also review the terms and conditions carefully for any state-specific gift card or promotional award laws that may apply.
Used by