Loyalty programs basics

Published September 30, 2022

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There are a lot of ways to encourage existing customers to continue being returning customers, but one of the best and most effective ways to do this is via creating a customer loyalty program. Its most important advantages are increasing Customer Lifetime Value, boosting loyalty, and avoiding churn.

Examples of activities that can be taken into account in the loyalty program are:

Product page view,
Product category page view,
Adding a product to the basket,
Product purchase,
Purchase above a certain price,
Purchase a product from a specific category,
Newsletter subscription,
After-sales survey submission,
Events from ticketing system (customer care),
Events connected with the external partnerships.

Without any coding, based on Synerise possibilities we can manage to develop rules for calculating points for such activities.

In this use case, we will present a basic schema for building loyalty program, which is the necessary first step you have to make in the beginning if you wish to calculate points for purchased products. We will describe the basic rules, based on which:

we granted customers with 1 point for every 1 PLN spent,
we count the points separately for every product in one transaction,
we multiply the number of points by number of products bought, if the customer has bought more than one item of specific product,
we round down the number of points (for example, for spending 80,60 PLN, the customer gets 80 points),
we count the point balance for every customer.

Those rules are the fundamental elements which might be treated as the basic loyalty program as a whole. We use basic conditions, awarding 1 point for every 1 PLN spent, but you can adjust those settings to your business needs. It is worth mentioning that, based on these elements, you can add more rules, exclusions, and requirements, to make your program more complex. For example, you can multiply the number of points awarded for specific products or product categories or opt out of awarding points for them at all. In this use case, we focus on the mechanism of earning points, but Synerise also provides functionalities for spending points.

Security configuration

Before you start working with this module, if you are a Synerise customer or partner, consider reading the section about denylisting events. This natively accessible configuration will allow you to manage the restrictions in points management that may help you prevent fraud.

Prerequisites

Implement transaction events using SDK or API.

Tip: Additionally, you can also collect a custom event which sends information to Synerise about joining a loyalty program (for example account.status with parameter accountStatus equal to active). Such an event with the appropriate status should be sent each time the membership status changes (when the customer joins, resigns, or re-joins).

Process

The process of creating the basic loyalty program described in this use case is divided into two main stages:

Prepare the points schema - this part of the process consists of the following:
1. Create an expression which multiplies the price by the number of products bought (this used only for counting loyalty points, not in the transaction data).
2. Create an aggregate which counts the amount of money spent on every product within a transaction.
3. Create an expression which calculate how many points a transaction is worth and rounds them down.
4. Contact Synerise support to implement the points.loyalty event which saves the result of the point calculation as an event in a customer’s profile. A parameter in the event is then used for creating an aggregate.
Count the points balance - this part of the process consists of the following procedures:
1. Create an aggregate which counts the number of points gained by customer.
2. Create an expression which returns the value of the aggregate with the number of points.

Prepare the points schema

In this part of the process, you will create the basic schema of counting points in a loyalty program, in which you grant customer with 1 point for every 1 PLN spent. This includes rounding points down when the amount includes hundredths. For example, for 80,60 PLN the customer gets 80 points.

Create an expression which multiplies price by the number of products bought

In this part, you create an expression which multiplies the price by the number of products bought. Based on this expression, if a customer buys more than one product of a specific kind, the number of points gained will multiply.

Go to Analytics > Expressions > New expression.
Enter the name of the expression.
Click the Expressions for option and select Event.
From the dropdown list, choose the product.buy event.
In the formula of the expression:
1. Click Select.
2. From the dropdown list, select Event attribute.
3. Click Unnamed to display the settings.
4. From the Choose parameter dropdown list, select $quantity.
5. Click the + button.
6. From the dropdown list, select Event attribute.
7. Click Unnamed to display the settings.
8. From the Choose parameter dropdown list, select $finalUnitPrice.
9. Change the mathematical operator between these two parameters to multiplication.
10. Click Save.

Create an aggregate counting money spent on every product within transaction

In this step, you create an aggregate which sums the amount of money spent on all products within the one transaction.

Go to Analytics > Aggregates > New aggregate.
Enter the name of the aggregate.
As the type of the aggregate, select Sum.
From the Choose event dropdown list, select the product.buy event.
As the event parameter, select the expression created in the previous step.
Click the + where and as the parameter select the $orderId.

Note: ID of the transaction is necessary for Synerise Team to be able to charge points after every transaction separately.
As the operator select Equal.
Click the icon next to the Equal operator two times, to find dynamic key icon.
In the first box add orderId and in the second add any value (in our case it might be 1).
Define the period from which the aggregate will return products from the event as Lifetime.
Click Save.