Loyalty management


Loyalty programs are increasingly being used by retailers and businesses around the world to incentivize customers, reward them for their interactions with the brand, and build ever-growing loyalty to the retailer’s products.

Commerce offers simple or complex loyalty program capabilities, which range across legal entities and across all Commerce channels. It provides a flexible solution to include any of the following options as part of the retailer’s loyalty strategy:

  • Establish earning and redemption rules so that the process of earning loyalty points and determining the options for redeeming rewards is clear.
  • Track participation in the loyalty programs.
  • Build loyalty programs that represent different reward incentives. For example, you can build loyalty program tiers to represent the customer’s level of engagement and offer greater incentives to those who are closest to your brand.
  • Issue loyalty cards from any Commerce channel and link them to one or multiple loyalty programs that you have established.
  • Link loyalty cards to customer records so that customers can accrue points from multiple loyalty cards that they might have.
  • Transfer loyalty reward balances between friends and family members, or adjust the loyalty points to meet customer demands that comply with your loyalty program policies.

Watch this video to learn how to create loyalty reward points, and loyalty program with tiers.

Multiple interdependencies exist between components of the loyalty functionality that you should consider when preparing the exact configuration in the system. Those interdependencies are illustrated in the following image.

Diagram of the Dynamics 365 Commerce loyalty process interdependencies.

The following section describes the prerequisites and loyalty components of the above image, to explain the purpose of each component and the extra features that are available for the retailers to use:

  • Discounts – Represents the discounts that you might offer to loyal customers. For example, you can offer a 10 percent discount on all products when the loyalty card is used in the checkout process.

  • Price groups – A system entity that you can use to create and manage prices and discounts in a more efficient way by grouping the customers, items, or channels that have the same pricing. In the preceding example, the price groups would include the discounts that are applicable to your loyalty program.

  • Channels – The Commerce channels that participate in the loyalty programs. These channels can be any of the commerce channels, such as retail stores, call centers, or online stores.

  • Loyalty payment method – You must set up a payment method before a loyalty card can be used at a register and loyalty points can be redeemed as part of a loyalty program. You must also add the loyalty payment method to the channel before customers can redeem their loyalty points as payment for products. Set up a loyalty type payment method, and then assign the loyalty payment method to the channels that are participating in the loyalty program.

  • Date intervals– Shows the validity interval of the loyalty tiers. These intervals can be used to define how long a loyalty tier is valid or the time that the customer must complete an activity to qualify for a tier. Date intervals are not applicable if your loyalty program does not have tiers.

  • Reward points – These points represent the rewards that your customers can take advantage of. They are used to qualify customers for tiers and are referenced in the tier rules. They are also referenced in the loyalty schemes to define earning and redemption rules. Earning rules define the rewards that the customer can earn based on their activity, and the redemption rules define the rewards that the customer can use as money in exchange for this activity. Reward points can be:

    • Redeemable - Used to buy products or exchange them for services.
    • Non-redeemable - Accumulated to move the customers to a higher tier of the loyalty program and to track their participation.

    Earned and redeemed loyalty points are saved against the sales line where they are accrued or used to ensure that the same number of points can be taken back or refunded in case of full or partial return.

    Retailers can define a vesting period for points that specifies the time between the customer activity that gives them the right to earn points and when those points become available for the customer to redeem. In most scenarios, this vesting period could take a couple of days to a couple of weeks, depending on the specifics of the business.

    A limit for maximum reward points can be defined so that the customer is not able to earn more points when they reach this limit. This parameter protects the retailer against loyalty fraud activities. In situations where fraud was determined, the loyalty card can be blocked. Additionally, the customer can also be blocked to prevent them from enrolling in the loyalty program in the future.

  • Loyalty programs – These programs are used to define the structure of your loyalty offering. For example, you can define what tiers will be available in your loyalty offering and how the customers will qualify for a tier. Additionally, you can associate price groups to the loyalty program, meaning that all customers who are enrolled in your loyalty program can receive special pricing or discounts. Moreover, you can associate the price groups at the loyalty tier levels, which will enable you to give special pricing and discounts for each tier. For example, a Gold tier member would receive more discounts than a Silver tier member.

  • Loyalty tiers and tier rules – The levels that you can define for your loyalty programs. The more that the customer interacts with your brand in a defined period, the higher the tier they can achieve. This approach usually brings more incentives such as higher discounts, free products, and more. You can define the rules for achieving each tier and the period during which customers can stay in that tier. These tiers are optional; thus, you can run a loyalty program with no tiers.

  • Loyalty schemes – Used to specify the earning and redemption rules for a specific loyalty program. You can associate one or more Commerce channels to a loyalty scheme to define which rules apply to the channel. Thus, you can have special earning and redemption rules for each channel. For example, you can incentivize your customers if they purchase from a certain channel. Different earning and redemption rules can be created for the different tiers in a program to differentiate the rewards for customers in the different levels. Retailers can also optionally include affiliations as part of the earning and redemption rules for groups of customers, such as students or military veterans.

    For scenarios where the retailer gives preferential prices to certain groups of customers, such as employees or wholesalers, but does not want them to accumulate loyalty points, you can exclude these groups of customers from earning or redeeming their loyalty points by adding the corresponding affiliation in the “Excluded affiliations” section of the loyalty scheme.

  • Loyalty cards – Give the customer that owns them the right to participate in the loyalty programs that are linked to the card. Cards can be anonymous or linked to a specific customer record. Retailers are able to see the loyalty transactions and accumulated points that are linked to a card, and they can also manually adjust the card to a higher tier, add points, or transfer balance points to another card. Retailers have an option to manually assign a number to the loyalty card, such as a customer’s phone number, or they can automatically generate loyalty card numbers in the channels.