A/B Testing a Loyalty Program: How to Run a Pilot Before Launch

A loyalty program pilot is a limited launch to a selected group of customers before full rollout, used to test how the program works and how members respond. An A/B test within the pilot randomly assigns participants to different versions, such as two earn rates, so the brand can see which version performs better.

Every loyalty program starts with decisions that are hard to get right on paper: how many points a purchase earns, which rewards to offer, where to set tiers and how much enrollment bonus to give. A pilot lets a brand try those decisions with real customers before committing the whole customer base, and A/B tests within the pilot show which version works better. Both only help if the pilot is set up so its results can be trusted. This guide covers the difference between a pilot and an A/B test, what to test, how to choose participants, how long to run and how to measure, the decision to launch, terms and the move to the full program, and how to collect feedback.

Key Takeaways

What is the difference between a pilot and an A/B test?

A pilot tests whether the program works with real customers before full launch; an A/B test within the pilot compares versions of one element by randomly assigning participants to each.

• Pilot: answers operational and overall questions. Does enrollment work? Do points credit correctly? Do members use the program? Does it change purchasing compared with similar customers outside it?
• A/B test: answers a narrower question. Does a higher earn rate, a different reward mix or a larger enrollment bonus change behavior enough to justify its cost?

A pilot can include both: a program-level comparison with customers outside the pilot, and one or two A/B tests inside it. For testing individual offers once a program is running, see the guide to testing loyalty program offers.

What should you test in a loyalty program pilot?

Test the program-level decisions that are expensive to change after launch, such as earn rate, reward mix, tier thresholds, enrollment incentive, communications and the technology itself.

How should you choose pilot participants?

Choose participants who represent the customers the full program will serve, randomly assign them to versions within the pilot, and keep a similar group outside it for comparison.

• Representative, not only the best customers: a pilot made up of the most loyal or first-to-sign-up customers will look better than the full program will, because those customers were already engaged.
• Random assignment within the pilot: assign participants to versions at random, so differences between versions come from the versions rather than from who ended up in each.
• Spillover: customers in one version may hear about the other from friends or share a household account, and comparison customers may hear about the pilot. Assign by household where accounts are shared, and expect word of mouth to narrow the measured difference.
• Customers, stores or regions: if members who shop at the same location would notice different earn rates, assign whole stores or regions to versions instead. A handful of stores gives limited evidence, so compare against similar stores outside the pilot, check their sales before the pilot and watch for local events that affect only one area.
• A comparison group outside the pilot: the cleanest comparison comes from randomly holding back part of the eligible group and not inviting them. Customers chosen any other way can differ in ways that look like a program effect, so compare their spending before the pilot as well as during it.
• Invitation or open sign-up: invitations give more control over who takes part; open sign-up is simpler but attracts the most interested customers, so comparing them with customers who did not sign up will overstate the program's effect. Treat that comparison as a best case, or invite a random subset instead.
• Enough participants: too few makes it hard to tell a real difference from chance; a sample size calculator can estimate the numbers needed for the smallest difference worth acting on.
• When the customer base is small: if there are too few customers for both versions and a comparison group, test one version against a small holdout and treat the pilot mainly as an operational test. Act only on large differences; treat smaller ones as unproven.
• B2B and channel pilots: with dealers or distributors, the number of accounts is often too small for a reliable A/B test, and partners compare terms with each other. Pilot by region or partner group, compare with similar groups outside it, and explain to partners why terms differ.

How long should a loyalty pilot run, and what should you measure?

Run the pilot across at least one full cycle of buying, earning and redeeming, decide the metrics and the decision rules in advance, and measure behavior against the comparison group.

• Length: long enough for typical members to buy, earn and redeem at least once; for infrequent purchases, that may take several months. Early activity can reflect novelty, and participants who know they are in a pilot may behave differently, so check whether behavior in the final weeks holds up against the first weeks.
• Enrollment and activity: sign-ups, the share of members who earn and redeem, and how quickly they start.
• Behavior against the comparison group: purchase frequency, spend and retention among participants compared with similar customers outside the pilot.
• Economics: reward cost, unredeemed points and margin after rewards, compared with the plan. Points earned but not yet redeemed are still a cost, so estimate how many will be redeemed rather than counting only rewards already given out.
• Operations: earning errors, failed redemptions and support requests.

BLOYL™, Brandmovers' enterprise loyalty platform, supports A/B testing against a control group and real-time dashboards, and its rules engine lets marketing teams change earning and redemption rules without engineering, so pilot versions can be set up inside the platform and changed between test rounds without engineering.

How do you decide whether to launch?

Agree on the decision rules before the pilot starts, wait until the planned length is complete, and launch, adjust or extend based on whether the results meet those rules.

• Decide in advance: the metrics, the smallest result worth acting on and what happens if results fall short.
• Example rule: a brand testing 1 point per dollar against 2 points per dollar might decide before launch to adopt the richer rate only if members on it buy more often by enough to cover the extra reward cost, measured over the full planned period.
• Do not stop early: stopping as soon as one version looks ahead makes chance results look real.
• Launch: if the program meets its targets and operations are stable, launch with the versions that performed best on the measure agreed in advance, ideally margin after reward cost rather than engagement alone.
• Adjust: if one element underperforms, change it and, where the change is large, test again.
• Extend: if results are unclear, extend the pilot or add participants under a plan agreed before launch; extending until a result appears has the same problem as stopping early.

The guides to phased launches and launching in 90 days cover what comes after the decision.

What should pilot terms and the move to the full program cover?

Tell participants it is a pilot, that rules and rewards may change and when it ends, and explain what happens to their points and status when the full program launches.

• Pilot terms: state that the program is a pilot, that elements may change during it, the end date and what happens to points if the program does not launch. The guide to loyalty program terms and conditions covers the rest.
• Different versions: state in the terms that participants may receive different earn rates, rewards or offers during the pilot. Participants may compare notes, so keep every version within what the terms describe, and decide before launch how to treat the group that received the less generous version when the pilot ends.
• Moving to the full program: explain whether points, status and history carry over, and what may differ, such as earn rates or rewards, so the change does not surprise them. If the full program is less generous than a member's pilot version, say so before launch rather than at the switch.

How do you collect useful feedback from pilot participants?

Set up feedback channels from day one, keep surveys short, record every comment and thank participants for helping.

• Short surveys: an overall rating and an open comment box gather more responses than long questionnaires.
• Plain, specific wording: for example, "Thanks for trying the pilot. What has worked well, and what would you change?"
• Record everything: pass comments about products or service to the teams that handle them.
• Rewarding responses: if the pilot offers points for surveys, note that California's consumer privacy law lets covered businesses offer financial incentives "for the collection of personal information" but requires notice and "prior opt-in consent" (Cal. Civ. Code § 1798.125). The same rule can apply to the pilot itself where points are given in exchange for personal information. This is general information, not legal advice.
• Thanks: acknowledge participants' help, especially those who reported problems.

Conclusion

A loyalty pilot is worth running when its results can be trusted and the decisions it informs are worth more than its cost: running more than one version, staff time, a later full launch and moving participants across. Choose participants who represent the customer base, randomly assign them to versions, keep a comparison group outside the pilot, set length, metrics and decision rules in advance, wait for the planned end before deciding, and tell participants clearly what may change and what happens when the full program launches.

Sources

• California Civil Code section 1798.125