Console Glossary

This glossary contains definitions and descriptions of the major terms used to describe products, features, and related concepts in the Console.

Activity

There are two main meanings for “activity” for ESI products.

• A business activity is something that a member did to satisfy criteria within the loyalty program. For example, they may have purchased a certain amount, wrote a review, downloaded an app, booked an appointment, etc., whatever the client sets as the criteria. For instance, if a member signs up by completing their profile information and submitting it, system activity is generated.
• A system activity occurs within the ESI system resulting from a business activity. The Activity Feed or Activity API capture information about what activity occurred, who did it (member ID), and other related information (a description, the date when it occurred, etc.). An activity can be used for: (1) triggered offers - triggered by an event or reaching a specified value, causing it to commence; or; (2) behavioral offers - complete or contribute to the completion of one or more specified behavior, causing the offer to commence. Activities (transactional in nature) should not be confused with Extended Member Data (EMD), which is information that is associated with the member and persists until something changes (such as the Last Activity Date).

Activity Offer Behaviors

Broadly, behaviors are things that members can do that a client program might reward on.

Direct Behaviors

Things like buying a specific item, spending a certain amount of money on a brand in single transaction or a specific activity reported as being done by the user. These are typically rewarded in real time because they are easy to evaluate and provide points in response to.

Indirect Behaviors

Things that are not necessarily immediate and may take multiple transactions or activities to fulfill. For example, a user may be asked to spend $40 in four different transactions before earning their reward (Frequency Offer) or be offered extra points for being a high-value customer that has spent above a certain threshold or earned above a certain threshold of points. These are sometimes done in real-time as the user completes the final task or may be rewarded in batches (ex: Rewarding everyone who spent $500 this month on the first day of the next month). Note that a client might convert an indirect behavior in their system into a direct one in ours, if they send an activity indicating they've hit a value threshold on their side that we do not yet support. This design is focusing on activities, which means that all of the offers we're evaluating are based on direct behaviors.

Add to Cart

Also called ATC, there are two types of offers:

1. AOV stretch: if a consumers basket is below estimated order value (based on predictive model), consumer is prompted with an offer to grow the basket. Typically the margin split is lower than Conversion offers.

   1. Ex. consumer has a $150 basket with a 50% margin, estimated order value is $180. Stretch % is configured to 15%, consumer is asked to purchase $175 (150*115%, rounded up). Margin split for AOV stretch is set to 30%, so $20 (150*50%*30%, rounded down). Final offer is Spend $175 and get $20 off.

2. Conversion: if a consumer basket is at or above estimated order value (based on predictive model), consumer is prompted with an offer to convert.

   1. Ex. consumer has a $180 basket with a 30% margin, estimated order value is $180. Stretch % is configured to 15%, consumer is asked to purchase $210 (180*115%, rounded up). Margin split for Conversion is set to 40%, so $20 (180*30%*40%, rounded down). Final offer is Spend $210 and get $20 off.

Adjustment

An adjustment is a change to the consumer’s points based on one of a number of factors, including previous errors in applying points, returns and refunds, or other factors. Generally, an adjustment results in points changes (positive or negative) through

• Discretionary actions (ex. awarded in recompense for a poor customer experience)
• Fraudulent behavior (ex. all points were ill-gained and thus removed)
• Transfers to other accounts (where the program allows)

A no-receipt adjustment is made when an adjustment process is carried out without the information provided by the consumer’s receipt. A void completely nullifies a transaction and the associated award of reward points.

Affinity (ES Loyalty Boost)

At a business level, affinity maintains consumer spending within the categories, brands, and products to which they have displayed a connection. For instance, for ES Loyalty Boost:

• Goal - To maintain a consumer’s general spend level with the client.
• Success indicator - Maintain AOV at the overall consumer level and within various categories, brands, etc. Maintain overall offer engagement (acceptance, completion).
• How this optimization works - An Offer Template is selected from a category, brand, or product in which the consumer has historic spend. The emphasis is on templates with a spend threshold closest to the consumer’s historic spend. The priority is for templates with lower incentive amounts. New consumers with no purchase data receive random offer templates.
• Guidance on applying templates - Ensure that the templates' currency value represents your typical member spend (perhaps $5 to $15 on the low end, $75 to $150 on the highest end). “For every $1” templates will almost always be selected over a spend-threshold template.

Aggregate or Aggregation (noun)

This is a running tally of events that have occurred, using metric data. For example, if each transaction metric is logging the total amount spent, this aggregate could tally that up. Usually done in varying increments, such as Lifetime, Yearly, Monthly etc. Note that it is usually restricted to one type of data, you would use a second aggregation to track bonus points earned, for example.

Aggregate (verb)

The act of tallying up multiple events into a single total value. This could take the form of a running total (sum) or an average, or potentially other types of tally operations.

API

An Automated Programming Interface is used to enable communications between different computer systems or software packages in a standard format. ESI APIs rely primarily on JSON value-pairs to allow attributes to be matched to their corresponding values. ESI APIs for different product are used to send requests to the ESI system, and to return information resulting from those requests.

Average Order Value (AOV)

Average order value (AOV) is a mean value that tracks the weighted average cart currency amount spent whenever a customer places an order on a website, in an application, or in a store. AOV is considered one of the most important metrics because it can be an indicator of whether your marketing and sales strategies are successful. It can apply to B2B or B2C. See also Basket Stretch Offer.

Example:

In August, if there were 5,000 transactions that resulted in $25,000 in sales.

AOV = $25,000 / 500 transactions = $50 per transaction

Other synonymous terms for retail contexts include: average basket size, average transaction size, average spend.

Badges

A badge is a signifier that the member has accomplished something in your loyalty program. Badges can be tailored to specific actions, behaviors, or achievements you want to encourage or reward among your members. Earning a badge means that the member has demonstrated their loyalty to the brand through their behaviors. The badge can be displayed with information related to their account to show their loyalty.

Balance

At a high level, the net amount of Points through Earn, Burn and other Adjustments that a member as accumulated throughout their lifetime in the program.

The balance can also change through automatic system processes like Expiry rules .

Bank Identification Number (BIN)

The term bank identification number (BIN) refers to the first four to six numbers on a payment card. This set of numbers identifies the financial institution that issues the card. As such, it matches transactions to the issuer of the card being used. BINs can be found on various payment cards, including credit cards, charge cards, and debit cards. The BIN system helps financial institutions identify fraudulent or stolen payment cards and can help prevent identity theft.

Base (points)

Base points are the points that are awarded on every transaction for each qualifying purchase made.

Basket Stretch Offer

A basket stretch offer (sometimes referred to as a “stretch offer”) is one that incentivizes the consumer to buy or spend more. For instance, a consumer may get an offer that provides more reward points if they spend more than they currently have in their cart or basket. If consumers consistently respond to basket stretch offers, their average order value (see above) will rise. For ES Engage, these are referred to as AOV stretch offers, and as Basket Stretch offers for ES Loyalty Boost.

Behavior Gaps

These are the behaviors each individual consumer is currently not performing, but that have the potential to perform, that would be strategic and desirable for the retailer.

Bonus (points)

Bonus points are very program specific in terms of how this definition is used in the industry. At Exchange Solutions, the Points earned through offers and other targeted promotions are typically considered bonus points. Bonus points are awarded based on offers that have been applied to the cart. They are beyond base points, or points regularly earned related to spend.

Often times bonus points are issued at the discretion of the marketing department within an organization to promote certain brands or products. Sometimes these offers are vendor funded, i.e. A potato-chip maker may sponsor a campaign on chips and have members earn 200 extra points if the buy chips.

Bonus points are one categorization of Point types.

Burn

An industry term for when a member uses their Balance towards a reward such as a redemption. Common rewards include:

• Free items (ex. a free drink at Starbucks)
• Dollars off (ex. $10 off groceries at Loblaws)
• Discounts (ex. 10 cents/L off fuel at Esso)

Some programs have progressive burn rates, that is to say the “value” is greater for the more points a member burns to encourage members to shop frequently to get the best value. Example follows:

• 1000 points for $10 off
• 2000 points for $25 off
• 3000 points for $50 off

Business Unit

The business unit functionality allows different divisions or business units of the same client company, or different companies, to use the same loyalty program. However, the separate business units can be partitioned in terms of Exchange Solutions' features so that each can only access those for which they have permissions.

California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act governs the handling of Personally-Identifiable Information (PII) for all residents of California. It is considered the strictest privacy law in the United States and also the standard to meet for any company that does business on the national level or in California. Exchange Solutions is compliant with the act and all employees regularly complete refreshment training to maintain their understanding of the Act's provisions.

Campaign

In ES Loyalty Boost, a coordinated set of offers. The campaign may have one or more iterations during its lifecycle (for instance, the campaign may recur weekly for 6 weeks).

Cardinality

The number of elements in a given mathematical set. In ES Loyalty, for example, a triggered offer may be set to be run for every consumer a maximum number of times, say 5 times; the cardinality of this triggered offer is then 5. A counter is incremented each time the offer is given to a specific member and the count is used to prevent the same triggered offer being given to the member again after the counter has reached 5 for that consumer.

Console

Product name for the administrative and user UIs that are used, in different configurations and with different features, for various Exchange Solutions clients and products.

Continuity Offer

For the purposes of ES Loyalty, a continuity offer is the same as a frequency offer. A frequency offer refers to a promotion or reward that is offered to customers who make a certain number of purchases or purchase a specified quantity of a particular item over a defined time frame. For instance, a retailer may offer a frequency offer to its loyal customers such as “Buy 5 of item X within the next 30 days and receive a 10% discount on your next purchase.”

Customer Lifetime Value (CLV)

The total amount of money a customer is expected to spend in your business, or on your products, during their lifetime. For instance, based on consumer behavior on the website and comparison/categorization of the buying patterns, a retailer may be able to discern that the consumer will spend an average of $X/yr. for the next 20 years, so the total Customer Lifetime Value = $X x 20. Sometimes, this is referred to at the “lifetime value of the customer.”

Retail calculation:

• CLV = Average transaction size x number of transactions in a period x number of periods the customer shops with brand over lifetime

For e-commerce, the terminology is different but the concept is the same

• CLV = Average order value x frequency of orders per month x number of months a customer shops with brand over lifetime

Profitability per customer is therefore

• Customer profitability = CLV - Acquisition cost

Loyalty programs and other customer management platforms have access to this data to compute CLV.

Customer User Experience (CUX) System

A CUX system is one that facilitates online transactions (through a website or mobile app). For example, data generated by member activities in an app or on a website is delivered to Exchange Solutions' systems via a CUX Application Programming Interfaces (API) and messages can be returned to the member through the app or website.

Data Integration

Data integration is the process of consolidating data from different sources into a single dataset with the goal of providing users with a unified view of the data and enabling analytics tools to create business intelligence. As a practical example, the key data integrations for ES Loyalty Boost include:

• Transaction data (feed or API, outbound from client systems to ES Loyalty Boost) - Used for offer behavior recognition (e.g., did the customer buy the pants? If so, provide the reward points).
• Product data (feed, outbound) - Used for product targeting (e.g., we need to know what are all the SKUs that map to CATEGORY = “pants”).
• Event/Activity data (feed or API, outbound) - Activities or events sent to ESI that can either trigger an offer or be awarded on (e.g., write a review, complete survey).
• Store location data (feed, outbound) - Used for store targeting (location, Kind of store, End customer profile for that store).
• Member data (feed, outbound) - Used to determine who are known members.  As well, audience targeting (e.g., ESI needs to know who has PROVINCE = ON so we only reward those members for a given targeted ON offer).
• Rewards Transaction (feed, inbound from ES Loyalty Boost to client systems) - Consume and apply bonus point issuance needed for points to actually show up in member’s accounts, apply bonus point adjustments.
• Offer data for email (feed, inbound) - Consume offer targeting feed and integration to email, which allows clients to show offers in email.
• Reconciliation (feed, inbound) - Consume reconciliation data and integrate to data warehouse and in-house reporting. Allows more detailed client-side tracking and reporting.
• Website Experience data (API real-time tag on client website) - JavaScript tag placed on customer’s site to present offers (Offer Gallery).

Data Migration

Data migration is the process of moving stored digital information between computers, systems, or formats. Data migration occurs for a number of reasons, including server replacement or maintenance, a change of data centers, data consolidation projects, and system upgrades. As much of a company’s corporate knowledge and business intelligence is contained in its data, any data migration project must be done carefully to minimize risks.

In the case of Exchange Solutions, data migration usually refers to a process that is sometimes required when onboarding a new client. It is the process of moving that client’s data, including member data, for their existing (legacy) system into an Exchange Solutions database. Migration must follow a refined process in order to mitigate the risks associated with moving valuable member data.

Data Type

The data type of a value (or variable in some contexts) is an attribute that tells what kind of data that value can have. Most often the term is used in connection with static typing of variables in programming languages like Java where the type of a variable is known at compile time. Data types include the storage classifications like integers, floating point values, strings, characters etc.

Data Warehouse

A data warehouse (DWH) is a system that aggregates data from different sources into a single, central, consistent data store to support data analysis, data mining, artificial intelligence (AI), and machine learning. A data warehouse system enables an organization to run powerful analytics on huge volumes of historical data in ways that a standard database cannot.

Delayed Transactions

Delayed transactions are those for which rewards are yet posted to the account pending a specific event, such as payment for the order and/or fulfillment of the order. The points are not added until the conditions are met, and then only if there are no holds on the points.

• Order- This is the action that creates a transaction that may be delayed. (May be merged with Finalize in final solution).
• Confirmation - This is the action that updates the order status so that it can now be rewarded. Alternatives: Completion, Status (update), Fulfill, Post.
• Pending - Pending transactions and the points associated are not yet posted to the account and require another event to confirm and post the transaction. All of the normal side-effects of a transaction have not yet happened. No redeemable balance will be provided, no reward control, no frequency offers progress, no membership tier progress etc.
• Posted - Posted transactions are transactions that have been applied to the account. Posted transactions are still subject to hold rules after the fact (the account has earned the points but cannot access them until the holds have run their course).

Dynamic Targeting

For dynamic targeting, the audience is selected in real time at the moment of an interaction (for instance, checking out or through digital engagement on a website). For instance, dynamic targeting allows “Load to Card” (LTC) offers to be targeted to a specific audience using logic. A use case for this is to allow targeting for members that use a partner payment card. Note that there’s no way to know in advance which members the offer will apply to; it depends on an evaluation of who meets the criteria at the time of an engagement or interaction.

Earn

The acquisition of rewards by the member through various activities or behaviors such as spending over designated thresholds. A member participating in a loyalty program earns Points in various ways

• Making eligible transactions (ex. 1 point for every whole dollar spent)
• Purchasing specific promotional products (ex. a shelf sign indicating 200 points per pint of strawberries)
• Completing personalized Offers (ex. an offer in your app for 200 points for an oil change)
• Participating in national Promotions (ex. 3x the points this weekend)
• Participating in contests (ex. make a purchase for a chance to win 1 million points)

Often times retailers have item exclusions, items that can never earn points for legal, financial or other reasons. For example, it is often illegal to earn points on tobacco products (cigars, cigarettes, chewing tobacco, etc.).

Earn Rate

The number of Base points or Bonus points issued per dollar, quantity or purchase.

Example

• 0 PC Optimum points per dollar or transaction at Loblaws stores (i.e. no base earn)
• 10 PC Optimum points per whole litre of fuel at Esso stations
• 1 star per $1 spent at Starbucks, decimals allowed
• 1 mile (Air Miles) per $20 spent within a week at Sobeys
• 1 mile (Air Miles) per $40 spent at Jiffy Lube

Economic Value

Relevant to ES Loyalty Boost. Economic Value is an optimization concept that can be layered into (ensembled) into the core slot Optimization Objectives. Today, this value is calculated based on a members’ historic spend in the categories that an offer templates’ eligible product belong in. There are several applications for this value. Today, one such application is to prioritize offers when there are many eligible for a member. For example:

• Affinity:  When a member has past spend in many categories/brands/etc. for a given slot, we prioritize those with the highest economic value.
• Stretch:  When a member has past spend in many categories/brands/etc. for a given slot, we prioritize those with the highest economic value.
• Penetration:  If a member has spend in all the available categories/brands/etc. for a given slot, we prioritize those with the lowest economic value.

In the future, we imagine that economic value will continue to be a factor in prioritization. We expect that it will be combined with other factors (e.g., relevancy) to determine the best offer.

Ensemble Capabilities (AKA Ensemble)

Relevant to ES Loyalty Boost. Ensemble capabilities allow the Boost’s optimization objectives to convert multiple inputs/attributes into a score (i.e., how far from “good” is this attribute value?). Those scores have a (configurable) weight applied and are then combined (i.e., ensembled) to produce one score for each offer. That score is then used to select the best offer.

This can be used to ensemble multiple optimization inputs, such as:

• Economic value
• Repurchase cycle
• High Household Penetration (Heuristics)
• Recommender (ML)
• Etc. (e.g., in future we could consider ensemble weather, demographics, offer engagement and other inputs)

Future optimization enhancements may be implemented to optimize the “weights” of the ensembled inputs to improve the performance of the model.

ES Engage

ES Engage identifies ecommerce consumer purchase intent, then engages with personalized, margin-aware offers optimized based on real-time purchase intent. Features include:

• Real-time data analysis - Using the consumer’s click-stream actions and available historical data, we determine – in milliseconds – answers to a few key questions during each browsing session. Is the consumer likely to buy? How much will they spend and is there an opportunity to stretch their basket? Will they respond to an offer? How much margin is available in the cart to support an offer?
• Offer decisioning - Based on real-time data analysis results, our intelligent rules select the right type of offer, the right spend amount and the right incentive value to drive the desired action…and sometimes the best action is no action at all. Why waste incentive dollars when the consumer was going to buy anyway!
• Offer presentment - Offers are presented in real-time, customized to our client’s brand standards and leverage any available rewards currencies, such as coupons or loyalty points. The reward is issued in session only once the consumer qualifies for the offer and checks out.

ES Loyalty

ES Loyalty is a comprehensive loyalty program management platform that includes the following features:

• Unified Member Database
• Integration Technologies (APIs, Feeds, SDKs, Web Listening Tools)
• Advanced Promotional/Campaign Engine
• Accrual/Redemption Engine
• Flexible Rewards (currency agnostic – $ off, experiences, services)
• Self-Serve Console (manage members, configure promos, reports)
• Membership Tiers
• POS Receipt Messaging & Prompts
• Trigger/Journey Communications
• Multi-Currency
• Refer-a-Friend, Gamification & Badging
• Localization & Multi-Language
• Premium/Subscription Loyalty
• Loyalty Report Suite
• Load-to-Card Offer Functionality
• Multi-Brand Programs & Strategic Coalitions
• Pre-Integrated with ES Loyalty Boost (Personalized Offers for Loyalty Program members)

ES Loyalty Boost

ES Loyalty Boost delivers highly-tailored and personalized incentives to members in exchange for performing incremental behaviors, thereby optimizing the promotional spend. ES Loyalty Boost helps close behavior gaps related to both spend and engagement, such as redemption recency, referrals, digital behavior and more. Features include:

• Real-time advanced analytics - Detect behavior gaps including for recency and frequency of spend, average order value, not shopping in certain categories, not engaging with digital and social channels, not redeeming in the loyalty program, and more.
• Intelligent rules and automated offer decisioning - Determine the right offers for each consumer based on their specific gaps while also calculating the minimum incentive amount required based on the consumer’s predicted likelihood to perform the missing behaviors.
• Offer presentment and reward - Consumers are engaged in real-time at the POS, on the website or through the call center, or via marketing channels pre- or post-interaction such as email, mobile push notifications or direct mail, to deliver the personalized offers and award the incentives after the missing behaviors are completed. Incentives can be tailored to whatever motivates consumers, such as bonus points, coupons, free gifts, exclusive experiences and more.
• Offer automation - Ensures consumers keep receiving new offers that are tied to the consumer’s latest performance and behavior gaps.

Expiry Rules

To prevent liability from building up, it is common practice in the industry to expire points or balances through a system program rule automatically. Common expiry models:

• Points-based treatments

  • No expiry, use an accounting treatment instead (ex. using an aged points report and booking a certain number of points as “expired”)
  • FIFO (ex. Starbucks rewards, stars expire 6 months after they are earned)

• Balance-based treatments (scheduled expiry or scheduled redemption)

  • Activity-based (ex. after 1 year of no purchases or redemptions, Balance is reset to 0 or all points are automatically redeemed, for example, to a gift card provided to the member)
  • Time-based (ex. every year on January 1, balance is reset to 0)

This is not a complete list but some of the most common methods of points expiry.

Extended Member Data (EMD)

EMD is additional data about a member. It may be data being used by the client that is not in Exchange Solutions, or for offer targeting, or for transmitting data for other specific features.

Feed, Data Feed, or File Processing

A data feed is a way of delivering structured data (such as XML, CSV files, or JSON) from one system to another. This could be for specific information, news, social media feeds or ecommerce marketing and advertising. The advantages of this feed-based system is that it is easy to implement and does not require the sender (or the receiver in fact) to use special tools or advanced API formats.

The downside of this is that there is no good way to continuously update the receiving party about changes. The receiver has to download and process the entire feed every time. This means that real-time updates are nearly impossible. It is called a data feed because the file is being updated frequently (every day or every hour); this way the product info is constantly fed (uploaded) into other systems, like shopping channels. Furthermore, the data that is sent is limited to the specific format. Currently, data feeds are still the most used form of data exchange in affiliate platforms, advertising networks and marketplaces.

First-Party Data

Encompasses an individual’s site-wide, app-wide, and on-page behaviors. This also includes the person’s clicks and in-depth behavior (such as hovering, scrolling, and active time spent), session context, and how that person engages with personalized experiences. With first-party data, you glean valuable indicators into an individual’s interests and intent. Transactional data, such as purchases and downloads, is considered first-party data, too.

Flat File

A flat-file database stores data in a simple manner. Each line of the text file holds one record. Fields are separated by delimiters, like commas or tabs. Most database programs, like Microsoft Access and FileMaker Pro, can import flat-file databases and use them in a larger relational database.

A flat-file architecture transfers sets of data (for a selected date range or number of records) via a CSV file or other flat-file format. Flat-file integration works well to transfer batch files for payment processing using SFTP (secure file transfer protocol).

Fraud Controls

It is common for loyalty programs to have some ability to restrict suspicious transactions. Historically, controls were the result of a known exposure.

• Internal fraud: an employee of our client’s business discovers a vulnerability (technical or business process gap) and uses it to extra value from our client (ex. a store clerk processes fake transactions to issue points to their own loyalty card in order to Burn for free electronics)
• External fraud: a person or criminal organization discovers a vulnerability and uses it to extract value from our client (ex. someone captures a member’s Member identifier and uses the member’s account to redeem for free chocolate bars)

Examples of controls we have implemented for clients in the past:

• Out of province redemption block, redemptions can only be performed in the province that corresponds to their Profile. This makes it harder for malicious persons to guess member identifiers and use them to redeem at a retail location.
• Earn points limit, members can earn a maximum of 2,500 Base points in a single transaction. This makes it harder for malicious persons to quickly ring up fake transactions to earn and redeem points.
• Registration and province match logic, Ghost or blank card can only be registered to the same province in which the first transaction was performed. This prevents a malicious person from guessing member identifiers and claiming the balance of ghost cards.

Frequency Offers

A frequency offer refers to a promotion or reward that is offered to customers who make a certain number of purchases or purchase a specified quantity of particular items over a defined time frame. For instance, a retailer may offer a frequency offer to its loyal customers such as “Buy 5 items within the next 30 days and receive a 10% discount on your next purchase.” This type of offer encourages customers to make repeat purchases and rewards their loyalty with a discount or other incentive. The basic concept is to reward customers who make frequent purchases with special promotions or rewards.

Gated Offers

Gated offers are targeted promotions designed for members of a particular group based on their occupation or other characteristics. These characteristics are validated to ensure that the member is eligible for the offer.

If a marketer has a limited marketing spend, they can target specific groups to get the most returns from their offers. In addition, gated offers have an air of exclusivity that makes them appealing to selected members. And by validating the gating criteria, the risk of fraudulent fulfillment by non-qualified members is greatly reduced.

General Data Protection Regulation (GDPR)

General Data Protection Regulation is a legal framework that sets guidelines for protecting the personal information of residents of the European Union (EU). To do business in the European Union, online businesses must be GDPR-compliant. Exchange Solutions is GDPR-compliant. Exchange Solutions employees receive regular refresher training to make sure they maintaining an understanding of the Regulation's provisions.

Ghost Card

These are cards that have been allocated for print which may or may not have been used by a member. A ghost card can have transactions if the member has done purchases prior to registering the card. 
A ghost card could be two things in our system:

• Card allocated = true, ACTIVE card status and UNREGISTERED account status
• Card allocated = true, no account exist for the card in our system

Ghost cards can accumulate reward points, but usually can’t redeem them until the holder is a registered member in the loyalty program (they can Earn points, but cannot Burn points).

In a retail context, best practice is for all customers to be prompted if they have a loyalty card or would like to sign up. For those customers that would want to sign up, they are handed a card. This card does not have a Profile since it was just given to the customer. The industry calls these cards, the ones sitting behind the counter and the ones that have yet to be registered, ghost cards or blank cards.

Global Trade Item Number (GTIN)

The Global Trade Item Number is an identifier for trade items, developed by the international organization GS1. Such identifiers are used to look up product information in a database which may belong to a retailer, manufacturer, collector, researcher, or other entity. The uniqueness and universality of the identifier is useful in establishing which product in one database corresponds to which product in another database, especially across organizational boundaries.

High Household Penetration (Heuristics)(ES Loyalty Boost)

Relevant to ES Loyalty Boost.

High Household Penetration (HHP) Background:

• In simple terms, household penetration is the % of households that have purchased a product or shopped in a certain channel or retailer. This concept can be modified and applied for loyalty by considering the % of members that have had spend in a given category, etc.
• Exchange Solution’s hypothesis is that this concept can be used to add more relevancy to our Offer Selection Engine which will drive up the all-important offer engagement KPIs.

HHP in ES Loyalty Boost

• The High Household Penetration (HHP) metric for Boost is a score which is calculated for every Offer Template at a global/program level.
• The score considers the % of loyalty members that have bought any product from that Offer Template in the past 12 months. Templates with a higher % of members with purchases have a higher HHP score.

HHP Summary

To summarize, HHP = how many customers made a purchase in a specific offer template divided by the total number of customers. For example, if we have 100,000 total customers and 95,000 of them purchased in the “oral health” product category while 80,000 of them purchased in “beauty”:

• oral health HHP = 95,000/100,000 = 0.95
• beauty HHP = 80,000/100,000 = 0.80

Householding

A program feature by which members can participate as a group, individual member accounts are “linked” in some fashion and individual balances are aggregated to form a group balance. This allows the group to earn points faster. Also, sometimes in a household, there are redemption permissions. That is to say, select members in the group can redeem the points but all can earn. A few example use cases below

• Use case 1: A family with three adults, each one uses the cards differently. All agree to use points for fuel since it is so expensive at the moment.

  • Person 1 (non-redeemer) uses it for groceries at a grocery store
  • Person 2 (redeemer) uses it for fuel at a gas station, this person drives Person 1 and Person 3 everywhere
  • Person 3 (non-redeemer) uses it for beauty products at a pharmacy

• Use case 2: An ice cream business with 3 shops, each shop purchases supplies and earn points individually but all the points are managed by the business owner. She uses those points to redeem for electronic gift cards to award shops for meeting monthly sales targets.

Loyalty Penetration

Quite often a KPI for a Loyalty program. Expressed as a percentage, it is an expression of how engaged consumers are with a program’s loyalty value proposition. Sometimes in can also be expressed as the percentage of sales that are “on card” which could be swiping an actual card, scanning a barcode that represents the member or tapping a phone that has the loyalty card in the member’s apple wallet (or any Member identifier).

For a period like a month or a week:

Loyalty penetration = total sales with loyalty / total sales

Example calculation. So if the data looked like the table below

Txn.	Sale ($)	Card scanned/swiped?
1	35.00	YES
2	40.00	NO
3	45.00	NO
4	50.00	YES
5	60.00	YES
6	42.00	NO

Loyalty penetration = (35+50+60) / (35+40+45+50+60+42)
=> 145 / 272 = 53.3%

Loyalty Program

A loyalty program is a mechanism by which businesses can drive repeat business and grow sales. The premise is that a customer that continues to come back time and time again is both contributing to your revenue over their lifetime, also called Customer lifetime value, but also not contributing to a competitor’s revenue.

Many programs operate by issuing Points to members of the program that must be earned over multiple visits. Members then Burn or redeem those points for rewards such as free items, discounts or cash back.

Mass Offers

Mass offers are offers that do not discriminate between consumers in order to tailor the offer to an audience. If all of the consumers that visited your website are provided with the same “spend $50, get 100 points” offer, then they’re all being treated exactly the same, and that’s a mass offer. They may have to accept the offer, but it is available to everyone.

From a technical point of view, within the system, there are two types of mass offers:

• “Everyone” + “AutoLoad” - The mass offer is available to everyone and is autoloaded to their account. All the consumer need do is fulfill the requirements of the offer to get the reward specified.
• “Everyone” + “LTC” - The mass offer is available to everyone, but is not autoloaded. The consumer must first accept (Load To Card) the offer to make it available to them. Then they must fulfill the requirements of the offer to get the reward specified.

Member Identifier

Also referred to as an MID, it can be a numeric or alphanumeric value that is assigned to a member as a unique identifier within the system. The identifier can directly represent a member or represent a card (as members can have multiple cards). It sometimes appears on the member’s plastic card or in their Profile. Depending on context/client, it can be considered Personally Identifiable Information. Examples:

• 623081290129329
• D99-E032JI-0132JS-J1SF92

Member Profile

The Personally Identifiable Information data associated with a member such as a member’s name, address, phone number, Communication preference, etc.

Profiles are typically created in two ways

1. when a member picks up a Ghost or blank card at the store and registers the card (online, in-app or by calling a call centre)
2. when a member enrolls in the Loyalty program without picking up a ghost card (typically the card is then delivered electronically through an app or via a kit in the mail)

Profiles are important as they allow loyalty programs to personalize the member experience through various interactions, including email communications and Offers targeting.

Metric

A metric is a standardized data format that logs various points of data related to a single event. For example, it might log various information about a transaction, such as how much was spent and earned, and in what categories the earn occurred.

Offer

In general terms, an offer is a published, promotional entity (that has targeting, date ranges, is able to reward points). It is a mechanism by which a member can accelerate Earn. Programs often have offers for consumers that can be completed and award points. Offers can be used to steal market share from competitors, increase Average order value, and increase cross category spend. Marketers like personalized offers because loyalty programs have the data to create strategies and executions to move the needle on some of these retail and program metrics.

• Mass: all program members can receive the points from these types of offers (ex. 5x the points this weekend!)
• Personalized: uniquely given to members often by their Member identifier (ex. Paul gets 40 points for buying peppers, Sharon gets 30 points for buying peppers)
• Load-to-card (LTC): an offer that must be actively accepted by the member, sometimes in a program app or through an email. These types can be mass or personalized; however, often times they are personalized.
• Other flavours: there are many other flavours of these offers, for example regional or store brand-specific.

For ES Engage, there are standard Pre-add to cart and Add to cart offers.

Offer Pool

A set of offers uploaded into Console from which offers for a particular campaign can be selected.

Offer Template

A reusable asset that is referenced to create Offers efficiently. The following are some examples of offer template considerations for “Spend $” templates where the member is required to spend a specified number of $ to complete the offer (or to be rewarded on increments of spending).

Stretch

• Templates with low/no spend thresholds will be selected infrequently as they will fall below the spend stretch goals.
• “For every $1” will rarely be selected over a spend-threshold template.
• The exception is in cases where the members historic spend in that product-set is larger than the highest spend-threshold (e.g., my average spend on “bath” is $71, but the highest spend-threshold template is “Spend $50 on bath”)

Affinity

• Ensure templates’ $X values represent your typical member spend (e.g., $5, $10, $15 for low spend categories, and $75, $100, $150 for high spend cats)
• “For every $1” will almost always be selected over a spend-template.

Penetration

• Templates with low/no spend thresholds should be matched with this goal as the member does not have historic spend in this category.
• “For every $1” will almost always be selected over a spend-threshold template as it is the lowest/easier offer for a member with no spend to achieve.
• Note: Optimization limited to only category/brand/product level Offer Templates (not appropriate for generic spend).

Alternatively, the member may be asked to buy a specified number of units from a product set to fulfill an offer. To optimize “Buy # Units” templates along with “Spend $” templates, the optimization normalizes the units into $ terms. For members with historic purchase in a product set, we use their average unit spend in that product set. For members without historic purchases in a product set, we use the global average unit spend in that product set.

Here are examples for “Buy # Units” templates:

Stretch

• Stretch attempts to prioritize templates with spend threshold >x% above historical spend.
• A member has historical spend of $20 in a given product set.  And their average unit spend is $5.
• Therefore, a “buy 5 unit” offer would be normalized to $25, and could be selected for stretch (i.e., $25 is a 20% stretch on the $20 baseline).

Penetration

• Penetration attempts to prioritize templates with the lowest spend threshold.
• A member has historical spend of $0 in a given product set.  Their average unit spend is therefore $0, but the global average unit spend is $5.
• Therefore, a “buy 1 unit” offer would be normalized to $5 and this offer would be selected over a “Spend $10” but not a “Spend $1”.

Affinity

• Affinity attempts to prioritize templates with spend thresholds closest to the member’s historic spend.
• A member has historical spend of $10 in a given product set.  And their average unit spend is $5.
• Therefore, a “buy 2 unit” offer would be normalized to $10 and would be optimal for the affinity optimization.

Note: Like the “for every $1” offers, a template that uses “get Y points for every 2 units” will be considered to be 2, 4, 6, etc. units. Therefore, if the historic spend on a unit was $5, this would be normalized to $10, $20, $30, etc.

Partner Linking

Partner linking refers to the Exchange Solutions mechanisms for allowing clients to have their loyalty members and accounts link to a partner’s account, for instance, a payment card or third-party loyalty program card. Partner linking can also allow the partner to reward or redeem points much as the client would. This partner activity involves evergreen and ad hoc promotions and is facilitated by features supporting ad hoc rewards and ad hoc redemptions.

Payment Card Industry (PCI) Standard

Payment Card Industry compliance has been formulated by credit card companies to provide a set of standards that ensure the security of credit card transactions. Companies that adhere to PCI Data Security Standards (PCI DSS) are considered to be in compliance with PCI. Exchange Solutions adheres to those standards and trains employees to understand the provisions of the PCI standards.

Penetration (ES Loyalty Boost)

At a business level, penetration boosts sales in categories, brands, and products where consumers are not spending. For instance, for ES Loyalty Boost:

• Goal - To drive sales in categories, brands, and products where members have little or no spend within a specified period.
• Success indicator - Increase sales for various categories, brands, and products and grow the average number of categories, brands, and products in which the consumers can shop.
• How this optimization works - An Offer Template is selected from a category, brand, or product in which the consumer has no historic spend. The emphasis is on templates with the lowest spend thresholds and prioritizing higher spend thresholds. If a consumer spends in all areas, the emphasis is on where they have the lowest spend.
• Application to different offer templates - Templates with low/no spend thresholds should be matched with this goal as the member does not have historic spend in this category, brand, or product. “For every $1” templates will almost always be selected over a spend-threshold template as it is the lowest/easiest offer for a consumer with no spend to achieve.

Personalization

According to Forrester: “An experience that uses customer data and understanding to frame, guide, extend, and enhance interactions based on that person’s history, preferences, context, and intent.” Forrester also notes that: “Companies base personalized moments on a spectrum of methods: segmentation, discrete interactions, preset personas or customer journeys, and contextual understanding and anticipating customer needs.”

Personally Identifiable Information (PII)

Personally Identifiable Information, or information that, when used either by itself or with other relevant information, can identify a person. Examples include a person’s full name, their email address (if their name is included), passport number, social insurance or social security number, credit card information, mailing address, driver’s license, financial information, or medical records. Under many forms of privacy protection legislation, companies and other organizations are required to take steps to protect PII from disclosure.

Sensitive PII	Not PII	Depends
First name	Masked member identifier	Member identifier
Last name	Anonymized data	Postal code
Social Insurance Number	Aggregated data
Mailing address
Email address
Phone number
Medical records

Placement Assessment

A full assessment takes into account all of the activity in the relevant period to determine which tier the user is initially placed in for a particular benefit period. Ex: During the 12 months immediately prior to the benefit period, the account holder spent enough money to achieve gold status in this benefit period.

Placement Assessment Period

The period of time for which all behaviors by the account holder are evaluated for their next benefit period. Usually it's a period of time immediately prior to the benefit period in question and therefore overlaps with the previous benefit and upgrade periods.

Upgrade Assessment

This is a "regular checkup" that can happen at any frequency, either real-time or on a schedule. This allows customers to get to the next tier level during the current benefit period when they perform behaviors that would allow them to qualify. For example, getting from bronze to silver because they spent an extra 100$.

Upgrade Period

Some programs allow their account holders to upgrade "early" by performing the required behaviors before the next benefit period starts. This allows new users to bootstrap their benefit tier as soon as possible, as well as allow already enfranchised members to upgrade their benefit tier as soon as possible. The Upgrade period always includes the benefit period to date and optionally includes a period of time prior to the beginning of the benefit period. For example, a program with a yearly benefit period with a year-long assessment period, may choose an upgrade period of 2 years. This means that behaviors in the current benefit period and behaviors in the previous benefit period count towards the upgrade.

Point of Sale (POS) System

A POS system is one that facilitates in-store transactions. For example, a cash register or payments terminal would be part of the POS system as it conveys purchase information into the system and receive appropriate responses (such as terminal prompts or receipt messages). Exchange Solutions has an suite of Application Programming Interfaces (APIs) that allow Exchange Solutions to exchange data with the POS system.

Points

Typically, a loyalty program will give points, miles, stars, stamps or have some other Balance accumulation mechanism.

• Starbucks Rewards: members collect stars towards rewards, represented as a decimal number
• PC Optimum: members collect points towards rewards, represented as a whole number
• Aeroplan: members collect miles towards rewards, represented as a whole number

For reporting and analytics purposes, categorization of Point types is important.

Point Types

It is a common concept within loyalty programs to distinguish by how the points are earned for financial, reporting and analytical purposes.

• Base points
• Bonus points
• Points due to Burn
• Points from Promotions
• Points due to Adjustments

Preferred Partner Network (PPN)

A PPN consists of different groups that have a special relationship with the retailer. For instance, a medical supply company may give different discounts to medical students and to various groups of healthcare providers and practitioners as a way of increasing affinity and the lifetime value of the members. These groups are “preferred” in that they receive special treatment as compared to regular members.

Program Tiers

Benefit Period

The benefit period represents the period of time members maintain their tier and therefore their benefits before it is possible for them to be assessed at a lower benefit tier. This is usually a divisor of a calendar year, for example Monthly, Yearly, Quarterly.

Benefit Period To Date

The portion of the benefit period that has already passed when considering the current benefit period. For example, in a yearly program in April 15th the benefit period to date is the period from Jan 1st to April 15th.

Manual Assessment

A manual upgrade driven either by an action from the console or a feed provided to ESI which pegs the account holder to a specific tier within the program.

Promo Enhance

Promo Enhance is a modular, SaaS based offering that enhances loyalty program performance without having to replace an existing loyalty platform. Promo Enhance leverages superior promotion personalization, automation, customer experience and analytics/insights features and functionality from Exchange Solutions’ ES Loyalty product. Specifically, Promo Enhance allows retailers to:

• Execute complex, highly personalized offers in minutes
• Drive both transactional and engagement style behaviors
• Delight members with engaging offer experiences, across all channels
• Boost operational efficiency with an intuitive, self-serve SaaS console
• Measure promotion performance with real-time insights
• Enable through a quick and seamless integration, which works with any loyalty program

Promotions

A more general term for mass Offers and other means of providing rewards to members, points earning events that any member can participate in throughout the promotion period. Members can make an unlimited number of purchases to earn points throughout the period.

• Earn 2X more points on fuel between March 10-12
• Earn 10 extra points on all Frito Lays products August 10
• Earn 20% more points when you spend $75 or more November 13 and 14
• Earn 3X more points when you pay with your app for the month of June

Recency, Frequency, Monetary Value (RFM)

Recency, frequency, monetary value (RFM) is a marketing analysis tool used to identify a firm's best clients based on the nature of their spending habits. An RFM analysis evaluates clients and customers by scoring them in three categories: how recently they've made a purchase, how often they buy, and the size of their purchases.

Reconciliation

A process by which two different sources of data are compared to see if they match. This is often a common and important step in the invoicing process but can also occur as part of regular operations. It is a check to make sure the business rules/contracts are implemented correctly. This occurs in a few scenarios in a loyalty context

• Verification of Points issued against sales data
• Verification of invoices based on performance
• Verification of points redeemed against program discounts in transactional data
• Verification of coupons or promotions billed to partners (or vendors) correctly

An example might be if a business user, Cathy, wanted to verify vendors were invoiced correctly for recent Promotions. For this fictitious program, members earn 1pt/$. Say there are three promotions, 2X points on dog treats, 3X points on crackers and 4X points on peanut butter. The vendor agreed to pay 50% of points issued at $0.0015/point.

1. Checking the loyalty program Reporting to see how many points were issued per promotion

   1. Report indicates 500,000 Bonus points were issued for dog treats
   2. Report indicates 300,000 bonus points were issued for crackers
   3. Report indicates 600,000 bonus points were issued for peanut butter

2. Checking internal sales reports to see how many items were sold in each category contained in member transactions

   1. Report indicates $500,000 of dog treats were sold
   2. Report indicates $150,000 of crackers were sold
   3. Report indicates $220,000 of peanut butter was sold

3. Checking the invoices to the vendor

   1. Dog treat promotion invoice line indicates $375 (500,000 X 50% X 0.0015)
   2. Cracker promotion invoice line indicates $270 (??)
   3. Peanut butter invoice line indicates $450 (600,000 X 50% X 0.0015)

4. During reconciliation, Cathy notices a discrepancy with both the points and the invoice

   1. For a 4X promotion, the loyalty program report should show 666,000 bonus points issued or the internal sales report should only show $200,000 in sales. This impacts the amount that will be billed to the vendor.
   2. For the 3X promotion, the invoice to the vendor should show $225 (300,000 X 0.5 X 0.0015) but instead shows $270.

Relevancy - Recommender (ML)(ES Loyalty Boost)

Relevant to ES Loyalty Boost. Recommender is an input used to help increase offer relevancy. At its core, this input provides a scoring on the predicted relevancy of various products/categories/brands/etc. for each member. These scorings may be further split by products the member has bought before vs. ones they have not bought before.

The input may then be layered into (ensembled) into slot Optimization Objectives (e.g., part of the Penetration Optimization Objective). Today, this input is not used by any of the Optimization Objectives.

In the future, Recommender will be used to enhance the Penetration Optimization Objective by pointing the optimization towards Offer Templates that may be relevant amongst the Offer Templates that the member has no/low spend. Likewise, Recommender will be used in a similar way for Stretch and Affinity in the edge case that a member has no/low spend.

Reporting (Insights)

There are various types of reports (Insights) that a Loyalty program commonly produces

• Marketing/Performance: KPIs about how the program is doing, how the program is tracking towards goals, ROI on promotions, historical Average order value and Loyalty penetration. Reports may be on the program level, member-level and region/brand-level.
• Financial: May be used for Settlement and Reconciliation, liability tracking, other accounting processes related to Expiry rules.
• Operational: Includes reports to monitor the program Fraud controls, anomalous data, and access controls.

Note that in the Exchange Solutions Console for ES Loyalty and ES Loyalty Boost, the reports and dashboards are accessed from the top-level Insights menu.

Reporting Identifiers

A Reporting Identifier provides categorization of offers or badges based on pre-defined identifiers that may be selected in the Console when creating the offer or badge. This allows those offers to be included in specific reports. Here are examples of how these reporting identifiers may be used by a client:

Identifier	How It’s Used
None	To set up an offer with no earn value. May be used, for example, to create an audience for CRM or targeted email.
Flash Sale	Short duration offers available to mass or targeted audience. For instance, for one day only, get 25X the points.
Category Mass	Offers available to everyone (flyer offers) for a product category, e.g., get 25X the points on baby products.
Global Mass	Weekend and weekday offers available to everyone. For instance, spend $50 and get 25,000 points, plus get an additional 25,000 points when you load to card on this offer (both are Global Mass).
Digital Personalized Offers	Using CSV file or query builder to target the audience. For example, get 200 points for every $1 spent on Levi products.
Coupon Offers	Using any coupon (mass or targeted). For example, buy any pair of Levi jeans and get $20 off when you scan this coupon.
Redemption Offers	Using any redemption offer (mass or targeted), e.g., redeem 25,000 points and get 5,000 points.
Behavioral Offers	Offers not related to a purchase, but to behavior or an activity. For instance, get 20,000 points when you register your account by providing an email address.
Partner Digital Personalized Offers	Any partner offer configured by the client. For example, spend $50 using our partner’s payment card and get 25,000 points.

Reporting Portal

UI that allows qualified users to create, manage and review reports based on program data.

Repurchase Cycle (ES Loyalty Boost)

Relevant to ES Loyalty Boost. Repurchase Cycle is an optimization concept that can be layered into (ensembled) into the core slot Optimization Objectives.

Today, Repurchase Cycle is implemented in a variant of the “Affinity” optimization, and is denoted as “Affinity_Repurchase” in the campaign slot configuration. In its current execution, instead of prioritizing offers that you have affinity with (i.e., past spend) based on their economic value (i.e., the logic used for basic “Affinity”), offers are prioritized based on a member’s repurchase cycle.

The current logic used to determine a member’s Repurchase Cycle for a given product is achieved by comparing a member’s current time to repurchase in the sub-category of a given product vs. the global average.   If a member’s current days is above the global average, it can be considered they are past due, and that it would be a higher priority to give them a related offer.

Return on Ad Spend (ROAS)

Return on ad spend (ROAS) is an important key performance indicator (KPI) in online and mobile marketing. It refers to the amount of revenue that is earned for every dollar spent on a campaign. Based on the return on investment (ROI) principle, it shows the profit achieved for each advertising expense and can be measured both on a high level and on a more granular basis. Whether you want to measure ROAS for an entire marketing strategy or look at performance at the campaign, targeting, or ad level, it’s a key metric for measuring and determining strategic success in mobile advertising.

ROAS can be calculated with a simple formula:

ROAS = (revenue attributable to ads/cost of ads) x 100

Think about it this way: Let’s say you’re running an ad campaign that you invest $1000 into, and you are able to attribute $3000 in revenue to those ads. Using the ROAS formula, you can determine an ROAS of 3, which is a very good result.

Seed List (ES Loyalty Boost)

Relevant to ES Loyalty Boost. A seed list is alist of a small number oftest memberswith whom you can test an ES Loyalty Boost campaign before setting it up for everyone on your member list. A seed list allows you to test the campaign in a controlled way. It allows a high-level assessment of whether the output aligns with business goals and controls, as well as to spot-check offer copy and creative elements.

Settlement

Generally the term is used to talk about calculating money owed and due between parties. In the context of loyalty, often times settlement comes into play when there are vendor funded offers. That is, vendors pay in whole or part of the points being issued.

Example 1:

A toothpaste maker (Beem) is launching a new type of toothpaste, offers to fully fund an offer at Pharma X, 100 points for buying Beem superfresh toothpaste. 100 points cost something to Pharma X, let’s say $0.05 per point. Thus $5 (100pts x $0.05/pt) must be settled, Beem owes Pharma X the sum of $5.

Example 2:

An Big Gas station in Ontario is owned by Mega Gas that manages the station. The station issues 100,000 points on Wednesday. Each point costs Big Gas $0.008. Mega Gas owes Big Gas $800 (100,000pts x $0.008/pt).

Slot

A framework used to help marketers define the number, mix, and sort order of offers as well as which Offer Templates are eligible for the campaign.

Static Targeting

With static targeting, the audience for the offer is determined ahead of time using some criteria of whom should get the offer.

Sticky Offer

A sticky offer is one that, once a member has seen it, remains available to that member until expiry, whether they load it or not.

Stock-Keeping Unit (SKU)

In the field of inventory management, a stock keeping unit (abbreviated as SKU) is a distinct type of item for sale, purchased, or tracked in inventory, such as a product or service, and all attributes associated with the item type that distinguish it from other item types. For a product, these attributes can include manufacturer, description, material, size, color, packaging, and warranty terms. When a business takes inventory of its stock, it counts the quantity it has of each SKU.

Stretch (ES Loyalty Boost)

At a business level, stretch optimizes consumer spending by getting consumers to buy more of what they already buy. Here is an example from ES Loyalty Boost:

• Goal - To grow overall spend by stretching existing spending habits.
• Success indicator - An increase in Average Order Value (AOV, see definition above), both overall and within specific categories, brands, etc.
• How this optimization works - An Offer Template is selected from a category, brand, or product in which the consumer has historic spend. The emphasis is on templates offering more than the consumer’s historic spend and with higher incentive amounts. If there is no historic spend, then random templates are selected.
• What this offer will not include - Templates with low/no spend thresholds, “For every $1” templates, any templates if the consumer’s spend is typically higher than the highest spend-threshold template.

System and Organization Controls (SOC2)

System and Organization Controls 2 is a reporting framework in which third-party auditors assess and test controls used by a company to provide sufficient levels of security, availability, processing integrity, confidentiality, or privacy. Exchange Solutions undergoes regular auditing to ensure SOC 2 compliance, which can be a requirement in some client contracts.

System of Record (SOR)

A system of record (SOR) is an information storage and retrieval system that stores valuable data of an organizational system or process. There may be multiple data sources and one or more locations with remote access. However, to ensure data integrity and validity, there must be only one SOR for a given piece of information. For information that does not change, such as historical data, a SOR provides a traceable source of the original data. A SOR offers the most current information for information that is subject to change, such as a bank account balance or loyalty program member point balance.

Third-Party Data

Obtained or purchased from sites and sources that aren’t your own, third-party data used in personalization typically includes demographic information, firmographic data, buying signals (e.g., in the market for a new home or new software), and additional information from CRM, POS, and call center systems.

Tiering

A program mechanism by which to encourage member’s to spend more within the program, typically manifested as an acceleration to Earn rate although there may be other perks with ascending the tiers. For example, in travel rewards programs often times there is priority boarding, discounted seat upgrades and access to the lounge. An example:

• Level 0 tier: Earn 1 point per $1 spent. Spend a total of $500 this year to get to Level 1 tier.
• Level 1 tier: Earn 2 points per $1 spent. Spend a total of $1500 this year to get to Level 2 tier. 20% discount on seats.
• Level 2 tier: Earn 3 points per $1 spent. Get a free shirt every month. Access to the lounge and priority boarding.

Total Addressable Market (TAM)

TAM is the total market demand for a product or service if 100% of the market were to purchase. TAM is measured in annual revenue or unit sales.

Transaction

A business transaction or purchase involves the POS or website sending an activity call including relevant purchase information, points redemptions, ghost card registration, and card status checks. The activity call is processed by the Promo Engine and returns receipt messaging, points awarded, redemption offers, and additional offers. The business transaction may therefore invoke one or more system transactions within ESI. The system transactions invoked are determined by the client. Transactions are immutable and should never be updated once created.

Transaction History

A list of all point changes from Earn, Burn and other types of activities that would make changes to a member’s Balance. Typically visualized as a table and surfaced on member websites, call centre applications and program apps.

TSA

Technology Solutions Architect, an Exchange Solutions staff member that works with clients to understand and manage the technological requirements relevant to the products they use.

Universal Product Code (UPC)

A UPC is a type of code printed on retail product packaging to aid in identifying a particular item. It consists of two parts – the machine-readable barcode, which is a series of unique black bars, and the unique 12-digit number beneath it. It is used to make it easy to identify product features, such as the brand name, item, size, and color, when an item is scanned at checkout. UPCs are also helpful in tracking inventory within a store or warehouse.

Value Exchange Optimization (VEO)

We define this phrase as "Understanding an individual consumer's current behaviors, identifying what incremental actions they could perform, and presenting an economically rational incentive that delivers value to the consumer while ensuring an incremental and profitable transaction for the retailer.”

Zero-Party Data

Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include preference center data, purchase intentions, personal context, and how the individual wants the brand to recognize them.

As industry regulations such as GDPR and the CCPA put a heightened focus on safeguarding consumer privacy, and as more browsers move to phase out third-party cookies and allow users to easily opt out of being tracked, marketers are placing a greater premium and reliance on data that their audiences knowingly and voluntarily give them. Experts also agree that zero-party data is more definitive and trustworthy than other forms of data since it’s coming straight from the source. And while that’s not to say all people self-report accurately, zero-party data is still considered a very timely and reliable basis for personalization.