Tiers and Rules
Part of Loyalty tiers and qualification rules
Setting tier thresholds from customer behaviour
Use eligible customer activity, qualification timing and benefit capacity to choose a loyalty tier threshold.
Choose a tier threshold by estimating who would reach it through eligible activity and whether the business could supply the benefit to that group. A round number is only a candidate until it has been checked against customer history and service capacity.
Build a comparable customer history
Use a period that matches the proposed qualification window. For each customer whose activity can be identified, calculate eligible spend or visits under the proposed exclusions, discounts and return rules.
State who is included in the population: existing members, all identifiable customers who could join, or another defined group. Include people with no qualifying activity when they are identifiable and belong in that group. Otherwise, the apparent qualification rate may be too high.
Look at new, regular and infrequent customers separately. An average can be pulled up by a few heavy buyers. Check when customers cross each candidate threshold as well as their total at period end; qualifying late may leave little time to use a benefit.
If store and online records cannot reliably identify the same customer, disclose the gap. An unmatched purchase is not evidence of inactivity.
Compare candidates using the same rules
For each candidate threshold, calculate the number and share of the defined population that would have crossed it, when they would have crossed it and the benefit capacity their qualification would require. Inspect customers just below the line as well as those above it.
Check / Decision it informs
- Share reaching the tier
- Whether the benefit can be supplied at that scale
- Time to qualification
- Whether members could use the benefit for a meaningful period
- Distance for active customers
- Whether the next tier is plausible through ordinary activity
- Activity near the threshold
- Whether a sharp boundary creates avoidable confusion
- Discounts and returns
- Whether progress can be recorded consistently
The results describe who would have qualified under each proposed rule. They cannot show which threshold would cause more repeat purchases.
Check the benefit at each candidate size
Estimate the cost and capacity of serving the members who would qualify. Include a higher-qualification scenario, since participation may differ after launch. For an appointment benefit, examine places at times members are likely to want. For a saving, assess affected transactions using the business’s own figures.
If a benefit is affordable only at a threshold the intended customers are unlikely to reach, reconsider the benefit or the tier’s purpose. State material limits with the offer, so the headline benefit and any conditions do not contradict each other.
Record and revisit the decision
Keep the population definition, dates, transaction rules, data gaps and candidate results with the threshold decision. After launch, compare actual qualification timing and benefit use with the planning estimates. Review failed claims and complaints as well. Members who qualify may already be more active, so their spending alone does not measure the tier’s effect.
A usable threshold has a plausible route for the intended members, a deliverable benefit and a rule staff can reproduce from the transaction record. Revisit it when buying patterns or benefits change, while accounting for existing member expectations.
