Loyalty programme software runs a company's loyalty programme: it records the points each member earns and spends, moves members between tiers, and sends each member offers. It is also called a loyalty management platform. Retailers, restaurants, banks, airlines and hotels use it. Because each purchase is linked to a member, it also keeps the most reliable record a company has of who bought what.
A programme has two sides. Earning is how members collect points, for example 1 point for every ₹20 spent. Burning is how they spend them, for example as a discount on the next bill. The software holds the rules for both. Tiers add a ladder: members who spend more in a year move to a higher tier, with better rewards. The software also runs special rules, such as double points in the member's birthday month, or points that expire after 12 months.
Take, for example, a fashion retail chain with 200 stores. A customer in Lucknow buys a ₹4,000 kurta. At the billing counter, the cashier asks for her phone number. The POS software sends the bill to the loyalty software. She is a Silver member, so she earns 1 point for every ₹20: 200 points, each worth ₹1 on a later bill. Her total spending this year has now reached ₹25,000, the threshold for Gold. The software moves her to Gold at once. Gold members earn 1 point for every ₹14, about 7% back instead of 5%. The software sends her a message about her new tier through the customer engagement platform. A month later, she spends 500 points at another store. The cashier enters a one-time password (OTP) sent to her phone, so that nobody else can spend her points.
The points cost the company money. Every unspent point is a promise to give a discount later, so the company must account for it as a liability, an amount it owes. The software tracks this total. Points are a kind of virtual currency, with a value that only the programme decides. Some programmes let members convert points into another programme's points, through a loyalty points exchange.
The basket records are valuable on their own. The software sends each member's purchases to the customer data platform, so that marketing messages can use them. Retailers send the same records for customer analytics, which works out prices, promotions and ranges. And when a reward is a gift card rather than a discount, the software orders it from a rewards platform. All of this is first-party data, collected by the company itself.