Glossary
What is average transaction value?
Average transaction value is the mean amount a customer spends per visit, and in a loyalty programme its variance, not its size, is what decides whether to count stamps or points.
The figure itself is less useful than the spread around it. A café where tickets run from €3 to €7 and a restaurant where they run from €15 to €120 may both average something workable, but they need different mechanics: the café's narrow spread makes every visit worth rewarding equally, so stamps are fair and legible, while the restaurant's wide spread would have a stamp card overpay a solo coffee and insult a table of six. The practical test is whether the largest ordinary transaction is more than roughly double the smallest. Below that, use stamps; above it, use points.
How does ticket variance decide the mechanic?
A stamp quietly assumes every visit is worth the same to the business, so stamps only work where that is close to true. Where one transaction can be ten times another, points scale the reward to the spend and remove the unfairness without needing explanation.
Where spend is irrelevant to the value of the visit (a class studio, a gym on a monthly membership) neither applies and attendance is the right unit instead.
Should a loyalty programme try to raise transaction value?
For most independent businesses, frequency is the easier lever and the one loyalty is built for. A programme reliably shortens the gap between visits; it rarely persuades someone to spend more on a given visit.
Where a larger order is the goal, points are the honest instrument, because they reward it directly. Adding a spend condition to a stamp card usually just makes the card harder to explain.
Does a minimum spend to earn make sense?
A low one does, in businesses where a basket can be split. A minimum of a euro or two stops a card being a reason to ring up three transactions instead of one, and never affects a real customer.
A high minimum is a different thing entirely: it excludes your most frequent, smallest-basket customers, who in a convenience store or café are often the most valuable people on the list.
See also
- Stamp card: A stamp card is a loyalty mechanic that rewards a fixed number of visits, one stamp per visit (buy ten coffees, get the eleventh free), and is the digital successor to the paper punch card.
- Points programme: A points programme awards points in proportion to how much a customer spends (typically one point per unit of currency) and unlocks a reward once a threshold is reached.
- Purchase frequency: Purchase frequency is how often a customer buys within a period, and its inverse, the typical gap between one customer's visits, is what sets every other number in a loyalty programme.
- Reward threshold: The reward threshold is the number of stamps or points a customer must reach before earning a reward, and setting it correctly determines whether the programme motivates or discourages.
Further reading
How to calculate customer lifetime value for a small business
A simple, defensible way to work out what a customer is worth over their whole relationship with you, and what to do with the number once you have it.
Stamps or points: which loyalty mechanic should you use?
How to pick the right loyalty mechanic for your business based on ticket variance, visit frequency and what you want customers to do more of.