Spend versus engagement: how to balance your loyalty earn structure

Most loyalty programs reward one thing: how much someone spends. That is understandable. Purchases are easy to track, directly tied to revenue, and simple to justify to a CFO. But if spend is the only path to points, you miss the majority of the behaviours that actually predict long-term loyalty.

At Livewall, we have worked with brands that felt this limitation first-hand. A customer who buys four times a year scores low in a spend-only system. But if that same customer refers friends, writes product reviews, and joins seasonal campaigns, they are probably more valuable than a heavy spender who does nothing else but transact.

The solution is not a revolution. It is a deliberate choice to expand your earn structure to capture the behaviours that signal real loyalty, not just purchasing power. This is the foundation of a behavior-first loyalty program.

The two layers of loyalty behaviour

Transactional loyalty is visible and measurable. How often does someone buy? What is the order value? How long have they been a customer? These are the KPIs that finance teams understand and that live directly in your CRM.

Relational loyalty is more subtle. It is about connection to the brand, not just to the offer. Customers who feel emotionally attached to a brand are less sensitive to price comparisons, more likely to refer others, and more willing to return without a promotion.

A well-designed earn model rewards both layers. That does not mean every action earns the same points. It means your program creates space for customers to demonstrate loyalty in multiple ways, including when they have not made a recent purchase.

Behaviour categories worth rewarding:

• Repeat visits to your app or platform, even without a transaction
• Referrals that bring in new customers
• Reviews and ratings after a purchase
• Campaign participation, games, or challenges
• Profile enrichment, such as filling in preferences or linking accounts
• Social actions, such as sharing or subscribing to communications

How to find the right balance

There is no universal formula for the right ratio between spend-based and engagement-based earning. It depends on your category, your average purchase frequency, and what you want customers to do between transactions.

A rule of thumb we apply at Livewall: if your purchase frequency is lower than once per month, you need engagement-based earning to keep your program alive. Without those additional earn moments, customers drift between purchases and forget the program exists.

With high purchase frequency, such as food delivery or daily retail, spend can remain dominant. But even then, engagement-based earning adds something spend alone never delivers: behavioural data that enriches your CRM.

A practical approach:

1. Define your primary loyalty objective. More purchases? Higher order value? Less churn? More referrals?
2. Map each objective to the behaviour that best predicts that outcome.
3. Award more points to behaviours that are harder to achieve or deliver more commercial value.
4. Keep spend as the foundation, but do not make it the only route to status or rewards.

The trap of rewarding everything

A common mistake is the opposite of spend-only: rewarding every possible action until points become meaningless. If a newsletter sign-up, a social media like, and a large purchase all earn the same reward, the system loses credibility.

The structure must reflect the relative importance of different actions. Small actions, small rewards. Actions that require real effort or deliver clear commercial value, meaningful rewards.

Well-designed loyalty programs make this hierarchy visible. Customers instinctively understand that submitting a review is worth more than opening an email. If your program ignores that hierarchy, you lose the trust of your most engaged members.

A second risk: engagement-based earning that relies on viral or social actions. Not every customer is willing to post on social media or send friends a referral link. An earn structure that only rewards those customers excludes a large portion of your loyal base.

Gamification as an earn layer

One of the most effective ways to activate engagement-based earning is through gamified loyalty. Instead of a flat table of points per action, you build a layer of challenges, streaks, and rewards where participation feels like play rather than chore.

What works well:

• Daily or weekly challenges that encourage small but consistent actions
• Streak rewards that motivate customers to return across multiple days
• Progress systems where visible advancement gives the feeling that loyalty is leading somewhere
• Temporary bonus campaigns that lift engagement during quiet periods

This is not a replacement for the transactional core. It is a complement that keeps the program alive and collects richer behavioural data for your CRM.

For McDonald's Spain, we built a gamified loyalty world inside the app where mini-games, characters, and seasonal zones transformed it from an ordering interface into a destination customers returned to by choice. They came back to play, not only to order.

For People's Postcode Lottery, we built always-on web games where postcode-based play turned everyday participation into a shared neighbourhood experience. Daily return habits built through play, not discounts. View the People's Postcode Lottery case.