Get started with Points

Understand how points drive engagement in the Loyalty Engine, covering earning and burning through reactors, points liability, and best practices for managing points-based loyalty programs.

In a loyalty program, points serve as a key reward mechanism, allowing users to accumulate value through specific actions or behaviours. Points encourage repeated engagement, driving customer loyalty by providing a tangible incentive for participation.

A well-designed points system is easy for customers to understand and should strike a balance between being attractive and fair, ensuring customers feel rewarded for their actions while encouraging ongoing interaction with your program.

Points can be earned, saved, and spent by users, offering a flexible way to reward a variety of behaviours, from purchases to specific user activities. How points are earned and spent depends on the structure of your loyalty program, and the Loyalty Engine allows you to define this through reactors and rewards.

---

Earning & burning points in the Loyalty Engine

In the Loyalty Engine, all adjustments to a user’s points balance—whether earning or burning—are managed through reactors. Points are added or deducted when specific events trigger reactors that include the Adjust Points reaction.

• Earning Points: Points are added to a user’s balance when a relevant event occurs (e.g., completing a purchase), and a reactor associated with that event fires the Adjust Points reaction. This allows points to be awarded based on specific actions or behaviours defined in your program.

• Burning Points: Points are burned in two ways:

  • Spending on rewards: When a user redeems a reward, the PURCHASED_REWARD event triggers a hidden reactor that deducts the reward’s cost from the user’s points balance.

  • Other point deductions: Reactors can also deduct points for other reasons, such as when a user returns a purchase they previously earned points on. In this case, the relevant event triggers a reactor that adjusts the user’s points balance accordingly.

By using reactors for both earning and burning points, the Loyalty Engine provides a flexible and automated system to manage points based on specific user actions within your program.

---

Determining baseline points value

When designing a points-based loyalty program, setting a baseline earn and spend value determines the fundamental value of points for your customers. This baseline, which typically represents between 1% and 5% of a customer’s spend in rewards, sets the foundation for how much value customers receive in return for their loyalty.

• Baseline Earn Value: Defines how many points customers earn per unit of currency spent. For example, 1 point per £1 spent.

• Baseline Spend Value: Defines the worth of each point when redeemed. For instance, if 1 point is worth £0.01, users earn back 1% of their spend as rewards.

Effective value

The effective value is the overall program budget you allocate to rewards as a percentage of customer spend. Effective value combines the baseline earn and spend rates with any additional promotions, representing the average percentage of customer spend returned as rewards over time.

For example, if you budget a 5% effective value for your loyalty program, setting a lower baseline return—such as 1-2%—gives you flexibility to use the remaining budget for strategic bonus promotions and seasonal campaigns. These could include double points weekends or targeted incentives to promote specific behaviours.

Tip: The lower your baseline return is in relation to your effective value budget, the more flexibility you retain for high-impact campaigns that can drive specific outcomes, such as increased spending or customer retention.

Example promotions

With a flexible effective value, you can run various promotions to engage customers and incentivise targeted behaviours:

• Double Points Events: Temporarily increase the points earned on all purchases, creating a sense of urgency.

• Triple Points on Target Products: Boost point earnings on select products to promote specific categories.

Balancing a baseline points return with a flexible effective value ensures cost-efficiency and provides ample room for high-impact rewards and promotions tailored to your program’s goals.

Setting the baseline value in the Loyalty Engine

In the Loyalty Engine, your program’s baseline value is determined by how you configure points adjustment reactions and reward pricing. Here’s how each component contributes to the baseline earn and spend values:

1. Earn: Points Adjustment Reaction on Earning Events

Define the number of points users earn for specific events, such as purchases, by setting points adjustment reactions within reactors (e.g., earning 1 point per £1 spent). This earn rate aligns with the baseline value you wish to establish for your program.

2. Spend: Points Adjustment Reaction on Redemption Events

Configure points adjustment reactions for events where users redeem points, such as deducting 1,000 points when points are redeeming at checkout, to save £10. This establishes a baseline redemption value on transactions directly, ensuring consistency in the points value for spending.

3. Spend: Reward Pricing in Points

Set points costs for rewards relative to their value (e.g., a £10 reward priced at 1,000 points). This pricing determines the points-to-value ratio for your rewards, completing the earn-spend cycle and reinforcing the program’s baseline value.

Since these configurations are set within reactors and reward definitions, there is no direct “baseline value” setting in the Loyalty Engine; instead, it’s achieved through consistent configuration across these elements.

---

Points liability

Points liability refers to the obligation of the loyalty program to provide rewards or benefits in exchange for the points accumulated by users. It represents the future cost that the program incurs as users earn, accumulate, and potentially redeem points for rewards.

The Loyalty Engine supports a variety of points liability management options, see Points liability for more information.

---

Manually adjusting a user's points balance

If required, you can manually adjust a specific user's points balance. For more information, see Adjust a User's Points Balance.

---

FAQs

Does the Loyalty Engine support multiple points balances?

No. Contact WLL Support if you would find this feature useful.

Does the Loyalty Engine support alternative point units i.e. credits, stars, xp etc.?

Not explicitly, but you can surface points in your interface however you like. For example, if the API returns a points balance of 1000 points, you could display this as 1000 credits in your interface.

Does the Loyalty Engine support a cash value instead of points?

Not explicitly, but you can surface points in your interface however you like. For example, if the API returns a points balance of 1000 points, you could display this as £10.00 by applying a multiplier in your front-end (pointsBalance * 0.1).

What happens if a user returns a purchase for which they earned points?

For returns, you could setup a specific event (e.g., RETURNED_PURCHASE) could to a reactor that deducts points from the user’s balance, ensuring accurate adjustment based on their updated purchase behaviour.

Can points be awarded manually?

Yes, administrators can manually adjust a user’s points balance via the Loyalty Console. This is useful for exceptions, such as awarding bonus points or correcting points balances.

What is points liability, and why is it important?

Points liability represents the program’s obligation to provide rewards in exchange for accumulated points. It helps manage the financial impact of points by projecting the potential cost if users redeem points for rewards. Ensure your approach to managing points liability – such as points expiry, notice of points expiry, cash value, and spend or earn caps – is clearly communicated in your loyalty program terms & conditions.