The incentive coefficient helps us to understand and assess how attractive a particular loyalty scheme for the customers taking part in it. In practice, it provides a simple way of answering the question of what proportion of every zloty spent by a consumer will be returned to them in the form of a discount, loyalty points or some other form.

The value of the incentive coefficient

The incentive ratio is calculated as the quotient of the market price of the prize offered to participants and the amount of money a participant must spend in order to become eligible to claim it.

The higher the incentive coefficient, the more advantageous and cost-effective the loyalty scheme is for the customer. On the other hand, however, this value must be set at a level that also allows the company to reap the benefits of running the programme. Finding a solution that satisfies both parties is particularly important, as it leads to mutual satisfaction. Such criteria can be established by taking into account, amongst other things:

• Analysis of competitors’ activities;
• The profit margins on products covered by the scheme;
• The organiser’s and customers’ expectations.