Definition
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.
Cost and perceived value are barely related
A free filter coffee might cost 40p and read as £3. A larger size costs pennies and reads as a pound. A branded cup costs a couple of pounds, reads as far more, and advertises you afterwards. Choosing a reward is mostly the work of finding the widest gap between what it costs you and what it feels worth, and it is the calculation most owners skip in favour of copying whoever is nearest.
Match it to how fast the card fills
A generous reward on a short card is expensive; a small reward on a long card is insulting. Work out how quickly your most frequent customer would finish, then choose. A lunch customer buying four times a week completes a ten-stamp card every two and a half weeks, which is a much larger commitment than the same card in a barbershop.
What to avoid
Percentage discounts, which are forgotten immediately and teach customers that your prices are negotiable. Anything redeemable at your busiest hour, which costs you a full-price sale you would have made anyway. And anything so expensive that you resent handing it over — staff can tell, and a grudging redemption undoes what the programme was for.
Questions
- Should the reward be my best-selling product?
- Not necessarily. It should be whatever has the widest gap between cost to you and value to them, which is often an upgrade or a pastry rather than the flagship drink.
- Can the reward be changed later?
- Yes, but honour what has already been earned. Change it for new cards and explain the change rather than letting customers discover it at the till.
Related terms
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.
Loyalty program
A loyalty program is an arrangement that rewards customers for coming back. In hospitality it usually takes one of two forms: stamps counted per visit toward a free item, or points accrued against how much is spent.
Stamp
A stamp is a single credit on a loyalty card. Staff add one when a customer makes a qualifying purchase, and collecting the required number — often ten — earns the reward.
Put your loyalty card in your customers’ pockets
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