Glossary
Loyalty terms, defined plainly
18 terms you will meet running a loyalty programme, written for the person behind the counter rather than the person selling the software.
C
Churn
Churn is the loss of customers over time. In hospitality it is rarely announced — nobody cancels a café — so it shows up as a regular whose visits stretch further and further apart until they stop.
Customer lifetime value
Customer lifetime value is the total profit a customer generates across the entire period they remain a customer. It reframes a loyalty reward as an investment against future visits rather than a discount on today’s.
P
Pass update
A pass update is the process by which a card already sitting in a customer’s wallet is changed — most often to show a new stamp count. It happens without the customer opening anything, which is what separates a live loyalty card from a picture of one.
Punch card
A punch card is a paper loyalty card that a business marks — with a hole punch or a rubber stamp — once per visit or purchase. When the card is full, the customer earns the reward printed on it.
R
Redemption
Redemption is the moment a customer receives the reward their loyalty card has earned. It is also the point at which the balance is spent — a card is not cleared by reaching its target, but by staff handing the reward over.
Repeat rate
Repeat rate is the proportion of customers who return at least once after their first visit. It is the most useful single number for judging a loyalty programme, because it measures the behaviour the programme is meant to change.
Reward
A loyalty reward is what a customer receives for completing a card. It is usually a free version of the business’s main product, though upgrades, add-ons and access-based perks often feel just as generous while costing considerably less.
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