Functionalities that make VIP tier a dynamic loyalty program.
Tier Calculation Method #
Tier calculation is how inback decides which VIP tier a customer belongs to. It is based on the rules you set while creating tiers, such as how much a customer spends within a defined time period. Inback automatically tracks customer activity and assigns them to the correct tier when they meet these conditions. As customers continue to shop, their tier is updated based on merchant’s configuration.
To know how tiers are assigned, you first need to know the following concepts:
Cumulative Spending #
Tier calculation is done through a system of cumulative spending. Meaning tiers are assigned based on the customer’s revenue spent in the store after the VIP tier feature gets live.
So suppose Mr. X purchases 5 items of $500 for the first time from ABC Ltd. Shopify store; then the cumulative spend of Mr. X becomes $500. After a few days, Mr. X purchases 2 items worth $200 then his cumulative spending will become $700. This can also be called the Revenue Spent by Mr. X.
Revenue Buffer Period: #
Revenue Buffer Period is a safety measure. In this, revenue is counted for tier assignment only after “X” days to prevent fraud and exploitation by any customer. For example, quick returns.
Note: Revenue Buffer Period should be more than return duration to ensure there’s no system exploitation.
Let’s understand this with an example of Maria, who makes a purchase from ABC Ltd.,
Customer Profile
- Maria’s cumulative spend: $480
- Silver Tier requires: $500 total spend
- Maria’s current tier: Base Tier
New Purchase
- On Jan 1, Maria buys something for $200
- Revenue Buffer Period: 7 days
During Buffer Period (Jan 1 – Jan 8)
- Maria’s VIP cumulative spend stays at $480
- She remains in Base Tier
- The $200 purchase is in the buffer; it is not counted yet
After Buffer Period (Jan 8)
- If Maria’s order is not cancelled/refunded, $200 is counted
- New cumulative spend: $480 + $200 = $680
- Maria’s cumulative spend crosses the $500 Silver Tier threshold
- She is upgraded to Silver Tier and receives Silver Tier rewards/perks
If the Order was Refunded (Before Jan 8)
- The $200 is never counted toward the tier since the order is refunded.
- Maria stays at $480 spent and remains in Base Tier
