Flat points in a loyalty program refer to a system where members earn a fixed number of points for a specific action, regardless of the value or quantity involved in that action. This is in contrast to points earned proportionally, such as earning a certain number of points per dollar spent. Think of it as a “fixed reward” for completing a defined task.
Examples of Actions Earning Flat Points
- Signing up for the program: A one-time reward of a fixed number of points for joining.
- Completing a profile: Earning a set number of points for filling out all required profile information.
- Referring a friend: Receiving a fixed amount of points for each successful referral.
- Downloading the mobile app: A one-time bonus for installing and using the app.
- Engaging with specific content: Earning a set number of points for watching a video, reading an article, or participating in a survey.
- Attending an event: Receiving a fixed point reward for attending a brand event or webinar.
- Making any purchase (sometimes): In some simpler programs, a member might earn the same fixed number of points regardless of the purchase amount. For example, 10 points for every transaction, no matter if it’s $5 or $50.
- Connecting social media accounts: A one-time reward for linking their social profiles to their loyalty account.
- Celebrating a birthday: Receiving a fixed number of bonus points on their birthday.
Characteristics of Flat Points
- Fixed Value per Action: The number of points earned for a specific action remains constant.
- Simplicity: It’s often easier for members to understand and track how they earn points compared to percentage-based or tiered earning structures.
- Predictability: Members know exactly how many points they will receive for completing a specific task.
- Can Incentivize Specific Behaviors: Flat points are effective for encouraging specific actions beyond just spending, such as profile completion or referrals.
Advantages of Using Flat Points
- Easy to Understand: Members can quickly grasp the earning rules.
- Encourages Specific Actions: Effective for driving behaviors like sign-ups, referrals, and engagement.
- Budget Control: Businesses can more easily predict and control the number of points issued for specific actions.
- Simpler System Management: Less complex to administer compared to variable point earning rules.
Disadvantages of Using Flat Points
- Less Incentive for High Spending (in purchase-based scenarios): If flat points are awarded per transaction regardless of amount, it doesn’t incentivize larger purchases.
- Perceived Low Value for High-Value Actions: The fixed number of points might seem insignificant for actions that require more effort or have higher value.
- Can Feel Less Fair for Different Levels of Engagement: Members who spend significantly more might feel that the flat points earned for other actions don’t adequately reward their higher level of engagement.
- Limited Ability for Granular Tiering Based on Spending: Flat points earned on purchases don’t naturally lend themselves to creating spending-based loyalty tiers.
When Flat Points are Often Used
- For non-transactional activities: Rewarding sign-ups, profile completion, referrals, and engagement.
- In simpler loyalty programs: Where the focus is on rewarding participation rather than purchase value.
- As a bonus on top of percentage-based earning: A program might offer both points per dollar spent and flat points for specific actions.
- To drive specific short-term campaign goals: Offering a fixed bonus for a particular action during a promotion.