Loyalty points have been around for decades, but most companies still treat them like a side gig—a “thanks for shopping” handshake rather than a core part of their value engine. That’s a mistake. When done right, points are currency. Not a cute metaphorical one, but a real tool for business growth, customer engagement, and margin control. The shift isn’t in calling them strategic—it’s in managing them like they are.
Points systems start simple: spend money, get points, spend points on rewards. But the control lies entirely with the brand. That means the value of the currency is not dictated by market forces—it’s created through brand policy, reward economics, and customer behavior. That’s where the opportunity lives.
If your marketing and finance teams aren’t collaborating on points valuation, you’re leaving money—and data—on the table. The way points are earned, redeemed, and even expired can directly shape buying behavior. Offering points for high-margin or slow-moving products turns them into a demand lever. Expiring them at key seasonal points? That’s revenue planning. This is strategic currency design.
A lot of programs measure success by points issued or redemption rates. That’s a shallow metric. If you give away points and customers cash them in for something with no tie to future value—like a third-party gift card—you’re spending marketing dollars with no return loop.
The better move is to engineer redemptions that keep customers in your ecosystem. Let them use points to unlock exclusive tiers, gain access to private product drops, or invest in community-driven experiences. You’re not giving points away—you’re inviting customers to buy into your brand story.
Rediem offers a powerful mechanism for this, allowing companies to integrate non-monetary redemption options directly into the platform, such as sustainability contributions or community initiatives. These choices turn a basic loyalty action into a statement of shared values, deepening connection beyond the transaction.
The CFO may care about the balance sheet liability of unredeemed points, but the marketer should care about it too. Why? Because breakage (unused points) is often seen as a win, but it’s actually a sign of low engagement. Points that expire unused signal a program that isn’t relevant or rewarding enough.
Strategic points management involves forecasting not just issuance and breakage, but behavioral shifts. Want to increase product trials? Use points as a nudge. Want to reduce churn? Trigger reminders or limited-time redemption events before points expire. Don’t treat liability as a static line item—treat it like a lever.
Points don’t have to be an afterthought—they can be embedded directly into your pricing and promotional strategies. Dynamic pricing using points as a partial payment option opens up room for discounting without devaluing your brand.
Let’s say you’re trying to protect margin during a tough quarter. Rather than slashing prices, you can offer double points for full-price purchases or allow partial redemptions where points cover shipping or tax. The customer feels like they’re getting a deal. You protect your positioning. Everybody wins.
Your customers aren’t thinking about “channels.” They’re shopping in your app on the subway, browsing your site on their laptop, and walking into your store on the weekend. If your points program behaves differently across those touchpoints, it feels broken.
Whether it’s earning rates, redemption options, or promotional bonuses, consistency isn’t just cleaner—it builds trust. If a customer earns points in-store but can’t use them online, that’s friction you can’t afford. Worse, it erodes the perceived value of the points themselves. Every inconsistency is a hidden cost.
Points programs have traditionally followed a “spend to earn” model. That’s limiting. The most valuable customers aren’t always the highest spenders—they’re the ones who bring others along, advocate on your behalf, or engage regularly with your brand.
Let customers earn points through behaviors: referring friends, writing reviews, attending events, or participating in challenges. These actions deepen their investment in your brand while giving you rich behavioral data in return. And when that data is tied back to your points system, you’re no longer guessing about what drives loyalty—you’re tracking it in real time.
Points don’t have to be confined to your brand. Done well, they can be used across a curated partner network to increase value without diluting your identity. But partner integration requires careful controls—especially on redemption value, customer experience, and data sharing.
It’s easy to launch a plug-and-play gift card portal. It’s harder—but more rewarding—to build co-branded experiences with like-minded businesses. Think “use your points for a yoga class with our wellness partner,” not “here’s a generic $5 voucher.” When partners reflect your values, the points program becomes a curated lifestyle offering, not just a discount machine.
Scarcity drives action. But too many brands wield point expiration as a cost-saving hack instead of a behavioral tool. If points expire too quickly, customers feel cheated. If they never expire, there's no urgency. Find the right cadence—and communicate it well.
Better yet, use expiration creatively. Offer to extend expiry for customers who take certain actions: make a purchase, complete a survey, or refer a friend. Turn expiration from a threat into an opportunity. Done right, it nudges customers toward engagement instead of resentment.
It’s easy to get stuck in vanity metrics. Issued points, redemption volume, active members—they don’t tell you what’s working. Your loyalty reporting should be guiding business decisions, not just validating past ones.
Track metrics like cost per redeemed point, average margin on redemptions, behavior change post-reward, or lifetime value delta between program members and non-members. These tell you if the program is doing its job: changing behavior in a way that benefits your business long-term.
And don’t keep this locked in the marketing silo. Product, finance, and ops should all have visibility. Loyalty data is business data. Treat it that way.
Points are a currency. But more importantly, they’re a signal. They reflect what you value, how you reward loyalty, and how you want customers to engage. Managing them well isn’t about better software or slicker apps—it’s about treating loyalty not as a perk, but as a core lever of business strategy.
By treating point issuance and redemption as economic levers, companies can shape customer behavior, align brand values, and drive measurable value across departments. This shift in thinking—from perks to purposeful engagement—marks the difference between a loyalty program that’s nice to have and one that actually moves the needle.
Rediem is designed for brands ready to make that shift. Its platform gives businesses the tools to turn loyalty actions into meaningful, value-aligned experiences, and points into a managed asset—rather than a marketing liability.
Points aren’t just what you give. They’re what customers give you permission to ask. Treat them accordingly.
ready to make the switch? we automatically migrate your customers points from Yotpo, Smile and others so your customers don't miss a beat.
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