Every store manager knows that terrible feeling you get when your sales numbers start going down out of nowhere. The National Retail Federation put out a report in 2024 that showed Q2 revenue went down by about 7% across different retail sectors. Those quarterly reports can be pretty eye-opening.
Point multipliers are just a way to give your customers extra loyalty points for every dollar they spend during sales times. These short-term increases can actually help you turn your situation around when sales are down. But you need to set them up correctly if you want to avoid making expensive mistakes. If you get the timing wrong, then you’ll be wasting your budget and making your shoppers unhappy.
Let me tell you how to use these multipliers at just the right times and for just the right customers. I’ll also show you some backup plans you can use when points alone aren’t enough to fix your revenue problems.
How Point Multipliers Can Improve Your Revenue
Point multipliers actually go way back to the airline frequent-flyer programs that took off in the 1980s. Airlines found out they could get more bookings by giving double or triple miles when travel was slow – this concept ended up spreading across almost every retail sector. Fast forward to today, and you’ll see the same basic idea everywhere, from coffee shop apps to hotel chains.
The way it works is pretty easy – customers earn base points for every dollar they spend. During a multiplier event, those base points get multiplied by whatever number you choose. A $50 buy that normally earns 50 points turns into 150 points with a 3x multiplier. It’s math that’s free money to your customers. Most shoppers can’t pass up that deal.
Recent loyalty research tells us that multiplier events can bump up how much people buy by as high as 40% when you run these promotions. Sephora ran multiplier events earlier this year that offered as high as 5x points depending on customer tier levels. Hotels like The STRAT offered 8x multipliers on casino games when they wanted to fill up quiet weeknights. Your customers feel rewarded while you get sales that might normally go to competitors. The extra money you make during multiplier windows more than makes up for the extra point costs.
Here’s where it gets a bit tough, though. Every point you give out turns into something you owe on your balance sheet until customers use it. Your finance team keeps an eye on these numbers during big promotions. Some businesses count on “breakage” when points expire or go unused. But multiplier events mean more points out there and probably higher rates of people cashing in their points. Your accounting team needs to factor this into the promotional budget – those bonus points are real future costs.
Multiplier campaigns can create a situation where your money comes in at different times than it goes out, which catches a lot of businesses off guard. You get paid today but have to pay out for those points months later. Building up point reserves before launching big multiplier events helps you stay away from budget problems down the road.
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The big question is if the extra sales are worth all of the points you’ll have to pay for later.
How to Target the Right Customers During Slumps
Not every sales slump needs the same response. What you do can depend on what caused the dip in the first place. Most businesses skip right over this part and jump straight to fixes.
The slowdown after the holidays is nothing like when you have too much inventory sitting around. When the economy gets bad, you need a whole different strategy than what you’d use for your usual summer slowdown. Each situation needs its own timeline and its own way of reaching customers. If you get it wrong, it’ll take you months to recover. When you rush to generic fixes, you’ll burn through your budget without seeing any results. Your customers can tell when you’re desperate, too.
Let me show you what happened with Buy Auto Parts recently. They rolled out targeted 2X multipliers on categories and saw their sales combination jump by 17.2% over 90 days. The main thing to remember here is that they were targeted – it turns out that being precise works way better than trying to reach everyone. What matters is which customers you want to reach. People who haven’t bought in a while need different motivation than your best repeat customers. Deal hunters look for different stuff than loyal customers who shop regardless of price.
Customer psychology changes when they can tell you’re desperate versus when you seem confident. Your standard customers want to feel appreciated, while price shoppers want to feel like they scored a great deal. If you send mixed messages, you’ll lose groups fast.
A blanket 5X event might get people’s attention. But it can destroy your profit margins. A segmented 3X deal to particular groups of customers tends to give you better results without hurting your bottom line as much – this margin trap catches most retailers off guard. Buy Auto Parts showed this works with their $10.58 return for every $1 they spent on bonus points.
How much you run these promotions matters just as much as who you target. If you give out multipliers too much, customers will start to expect them. They stop seeing them as worth it, and you get stuck in a discount cycle. Your normal prices start to look too expensive by comparison. What you want is to find the weak points in your sales funnel first. Then, you can create targeted deals to fix those exact problems instead of hoping a general incentive will fix everything.
How Point Multipliers Tap Into Psychology
Point multipliers usually work best when they tap into basic human psychology – this works across most business models. Your customers need to feel like they’re missing out on something helpful if they don’t buy. That’s where scarcity matters.
Say you compare “double points on your first $100” to a flat 3X multiplier across the board – the threshold version tends to work better. The threshold gives you a goal for shoppers to reach. They can see just what they need to spend to unlock the bonus. Customers usually respond better to targets. But a flat multiplier just doesn’t create that same level of excitement.
Tiered systems work even better because they turn shopping into a game. Offer 2X points up to $75, then 3X from $76 to $150, and maybe 4X after that. Sephora used this during their 2024 Beauty Insider event and saw customers stretch their budgets to reach the next level. Tiers bring out the competitive psychology that drives spending decisions. When people see tiers, they start calculating how much extra they need instead of questioning if they should buy at all. Your average order value goes up when customers try to reach the next reward level instead of sticking with their original budget.
The small details matter more than you might expect. Your app banner needs to show the multiplier. The cart should remind people how close they are to the next tier. Email subject lines need to mention the bonus points instantly. Expiration dates create urgency without being too pushy. You want to give people enough time to plan their purchase but not so much time that they forget about the deal. A week feels rushed, while a month feels endless. Two weeks tends to work best for most purchases.
The psychology of deadlines is what separates successful promotions from the ones that flop. Two weeks gives enough planning time while the deal stays fresh in people’s minds.
You also need to be careful with your math here. The behind-the-scenes calculations can get tough fast. Some states also have their own laws for how you can advertise point values.
What the Numbers Really Tell You
You need to track the right numbers if you want to know if your point multipliers actually work or not. The first metric to check is incremental revenue – this tells you if you earned more money than you would have without running the promotion. Average order value is another big metric to watch because it tells you if customers just bought their usual amount or if they actually spent more money per visit.
Point liability is something else that matters because you’re still going to have to give out those rewards later on. Track your engagement rate to see how many members actually took part in the promotion versus how many just ignored it completely. Most businesses usually skip this altogether, which is a mistake.
If you track the wrong metrics, then you’ll make bad decisions about your future promotions. Your finance team is going to question every loyalty expense if you can’t prove that you’re making a return on investment. When you don’t have solid data to back it up, you’re just gambling with your marketing budget.
Starbucks gives us a perfect example of why you need to dig deeper than just the surface numbers. Their 2023 quarterly earnings showed that active membership jumped 15% after they ran double-star days. That sounds great until you see that their net profit didn’t increase at the same rate. The promotion worked to bring people in. But it didn’t necessarily turn them into more profitable customers.
You should ask yourself why these engagement spikes don’t always turn into long-term value for your business. You need to watch for signs that customers are tired of your promotions or that they’re starting to expect them as the normal price. Running A/B tests helps you separate the real effect of multipliers from the usual seasonal changes that happen in your business anyway. Customer behavior patterns usually take a few months to show themselves.
Thinking long-term is what separates successful loyalty programs from expensive mistakes. Lots of promotions that look great in month one will start showing weaker results by month six. Your goal should be to build sustainable engagement with your customers and create relationships where they usually buy at full price.
Cohort analysis lets you follow groups of customers over time so you can see how they behave after the promotion ends – this keeps you from fooling yourself with confirmation bias or making conclusions from sample sizes that are too small to mean anything. The numbers will tell you the real story – but only when you take the time to dig deep enough into them.
Other Options That Work for Your Business
Point multipliers aren’t your only option when sales start to slow down. Flash discounts bring quick results without those complex loyalty calculations. Tiered status upgrades might do better for customers who want recognition more than points. Most retailers just stick with what they already know.
Look at how British Airways deals with this problem. Their Avios subscription model lets members pay monthly for bonus points instead of waiting for promotional periods. REI takes a different approach with annual dividends that reward total spending instead of when they buy. What makes these two work is that they actually match what their customers expect.
Your customer base matters more than the particular tactic you choose. A small retailer that’s tight on cash might find that targeted freebies do better than point increases because customers can see the value immediately. The psychological effect is different when someone can actually touch or use their reward right away. Small retailers don’t have the budget for complex point systems. Their customers respond better to rewards they can get immediately instead of future promises.
B2B businesses run into their own set of problems. Recent studies have shown that keeping strong employees during slow periods matters more than short-term sales bumps. Creating psychological safety through steady rewards does better than the uncertainty that comes with changing multipliers. Employee morale influences customer experience more than most people think.
You need to watch out for overlapping promotions that confuse people instead of getting them excited. When customers can’t quickly understand what they’re earning or how to use it, you’ve already lost before you even start. Incentive fatigue turns into a real problem when every month brings another confusing deal. When promotions confuse people, it hurts sales faster than having no promotion at all. Customers give up on purchases when the requirements for rewards keep changing.
The choice depends on timing and what resources you have. You can layer multipliers with other methods when you have a strong infrastructure in place. But you should swap them out when keeping it simple is better for your situation. Whether your infrastructure is ready or not will decide if your promotions succeed. Sometimes, the best move is to pause all promotional activity and focus instead on making your products better or improving your customer service in ways that create real value.
Level Up Your Incentives and Rewards
The best part about testing multipliers is that you can start small and learn as you go – even though most teams try to roll these programs out to the whole company pretty fast. Pick just one product line that isn’t doing well or one group of salespeople who need help, and then set up some easy goals to measure. And remember to give yourself a set date when you’ll sit down and check how things went – this deadline helps your team know what they’re working toward. Maybe you’re excited about what could happen, maybe you’re worried about spending the money, or maybe you’re just happy to finally have a real plan – but remember that every program that works now started with someone who was ready to try something different. What you need is to get real information about what works for your business and your people.
When you test just one group, you protect your budget while you get information about what happens. Your team gets to see how the program works without feeling too much pressure all at once. The feedback you get from this test run is what you’ll use to make bigger decisions that actually make sense for your company.
Your sales slump doesn’t have to last forever, and if you do this well, you can turn those problem areas into money-makers. The results might catch you by surprise in ways you didn’t expect. Those parts of your business that used to drag down your numbers can start bringing in steady money. Teams that had a hard time staying motivated can start reaching goals they used to think were impossible. Your numbers can go from just trying to stop the bleeding to actually planning for real growth.
With that in mind, if you’re ready to look into how the right incentive programs can change your sales results, Level 6 helps create programs built specifically for businesses like yours. We work with everything from point multiplier setups to full sales incentive programs, and we help businesses get the most out of their investment while their teams start performing better. Give us a call now for a free demo, and we’ll show you how we can help turn your sales problems into ways to grow your business.
Claudine is the Chief Relationship Officer at Level 6. She holds a master’s degree in industrial/organizational psychology. Her experience includes working as a certified conflict mediator for the United States Postal Service, a human performance analyst for Accenture, an Academic Dean, and a College Director. She is currently an adjunct Professor of Psychology at Southern New Hampshire University. With over 20 years of experience, she joined Level 6 to guide clients seeking effective ways to change behavior and, ultimately, their bottom line.
