Credit-Based Loyalty

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Credit-Based Loyalty

Overview

  • Every client can choose and set the point scale for following customers' loyalty progress (e.g., 1 point earned per dollar).
  • For easier understanding, the equivalent in points is usually compared with a dollar value (e.g., 1 point = $1).
  • Credit loyalty allows the customer to earn credit-based “cash-back” bonuses or item-based coupon rewards at certain spend increments:
    • Coupon rewards will be item-based (e.g., Free Burger, Free Fries after spending $X amount).
    • Coupon rewards can be set manually or they can be automatically applied.
    • Coupon rewards can have an expiration day, and afterward, they get removed from the patron's wallet.

Examples

Loyalty-Type-Credit-Based_1.png

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Credit- vs. Bank-based Loyalty

  • Similarities:
    • Credit-based and Bank-based systems share many similarities in how they are configured:
      • Both require the Restaurant Partner to determine a multiplier (points per dollar spent).
      • For both systems, an item-based reward is configured by creating a promotion (without a promotion code) for a specific item.
      • Both can be combined with a Tier-based system to encourage repeat purchases by patrons.
      • When an award is redeemed, both systems will add the coupon to the patron's wallet.
  • Differences:
    • The main difference between Credit-based and Bank-based loyalty is the patron's ability to redeem awards at different spend increments.
    • Under a Credit-based system, a patron can only earn and redeem a reward at fixed spend increments:
      • For example, Clean Juice patrons can only earn and redeem a reward ($10 credit) after $100 in incremental spend — they do not have the option to wait until they spend $200 for a different set of awards.
    • Under a Bank-based system, the patron can wait and choose at which spend increment they want to redeem a reward:
      • For example, let's assume there's a burger restaurant with a bank-loyalty system with 1 point earned per dollar.
      • The restaurant offers a free drink for 50 points and a free combo meal for 200 points.
      • A patron, after spending $50, can choose to redeem their points for a drink or wait until they spend $200 to get a combo meal.

 

Restaurant Experience

Configuring Credit-based Loyalty

Let's talk about this template for configuring a credit-based loyalty system:

  • Start by understanding what the money spent - points ratio the client wants to configure (e.g., 2 points per dollar spent)

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  • Next, you will need to identify the Loyalty Goal, which is the number of points someone needs to earn by spending money.
      • Reward at Goal refers to the loyalty reward that a guest will receive upon spending the appropriate money/points in "Loyalty Goal." This reward can be money-based or item-based depending on how you screened the client.
          • The recommended method of setting up rewards is Credit-based. Only if a brand is on Toast and does not want to use in-store loyalty & scan-to-pay, should item-based rewards be configured.
          • If the Reward at Goal is an item-based reward, the Onboarding Lead will need to create an item-based discount and a promotion underneath the discount. Then, the Onboarding Lead should find the alphanumeric field to that promotion and drop it in the template doc.

Loyalty-Type-Credit-Based_4.png

 

  • Once you're done writing in the base money - point conversion and loyalty goal and reward. You will need to write in the sign-up bonus that the restaurant partner would like:

Loyalty-Type-Credit-Based_5.png

 

      • This is optional and not a required field to fill out in the template. If a client requests this to work for only certain guest cohorts, you SHOULD recommend first-time-only discounts to the client instead.
  • Birthday Reward Value refers to the loyalty reward that a guest will receive on their birthday. Their guest sign-up flow/UI MUST have a field for "birthdate" to have this work. This reward can be money-based or item-based depending on how you screened the client.

Loyalty-Type-Credit-Based_6.png

      • The recommended method of setting up rewards is Credit-based. Only if a brand is on Toast and does not want to use in-store loyalty & scan-to-pay, should item-based rewards be configured.
      • If the Birthday Reward Value is an item-based reward, the Onboarding Lead will need to create an item-based discount and a promotion underneath the discount. Then, the Onboarding Manager should find the alphanumeric field for that promotion and drop it in the template doc.

 

Configuring Tiers + Credit-Based

  • These can be configured after the client has confirmed the spend thresholds that guests need to achieve before earning a higher Reward at Goal.

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    • Enter the points or money threshold that a patron needs to meet in order to progress to the tier in the Tier column.
    • In the Reward at Goal that patrons will earn for reaching the tier in the Rewards column.
  • Theoretically, a Restaurant Partner can have as many tiers as they want but we want to cap it at two tiers so there are a total of three along with the base tier.
  • Once this document is filled out, you can file it in the configuration ticket on Notion.
  • Lunchbox's loyalty programs with tiers are based on lifetime spend and at this time, patron's points continue to accrue over time and never expire. However, we are working on a solution to allow restaurant partners the option to expire loyalty points after a certain amount of time (i.e. every 12 months).

 

Patron Workflow

  • When a patron places an order, it can automatically track the loyalty progress via the progress bar available in the Account section (Web) or Rewards section (iOS & Android)
  • After spending a dollar amount, the patron builds up the loyalty progress. The point value is set by client preference. The client decides upon a point value that is redeemable and how much credit is given to customers after reaching the redeemable goals.
  • If a patron reaches the redeemable points goal, for the next purchase the credit will be applied and visible in the price breakdown.

Additional Notes:

  • With a Credit-based loyalty system, the amount spent is automatically calculated in rewards points (e.g., If a user spent $26.94 and a threshold is 100 points, the user needs to gain 73.06 points in order to reach that threshold).
  • The gained amount is calculated based on the total amount of the order (with tax included). Even if the subtotal of the order can sometimes be higher than the total amount, in that case available loyalty is already applied to the subtotal.

Loyalty-Type-Credit-Based_8.png

 

FAQs

  • I don't know how to recommend rewards or progress of tiers?

    • The Sales Engineering team utilizes this matrix to determine what the optimal credit- and tier-loyalty system structure would be for a Restaurant Partner
  • Is there an example of how a patron's points and tier progress are process under a Credit + Tier loyalty system?

 

 

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