About Pricing Using Base Redemption Promotions

Base redemption promotions give you a way to create redemptions that cannot be handled using redemption rules:

Redemption rules, which are used for normal redemptions, update redemption prices based on the pricing setup done at the product level.
Base redemption promotions can be used to create redemption pricing that also takes into account external factors, such as the load factor, the number of days redeemed before the flight date, or the tier level of the customer.

Here is an example of when base redemption promotions are useful: An airline wants to create a redemption price for flights that gives its platinum members a discount price of 10% less than the redemption price that other members pay and that gives a further 3% discount if the redemption is for flights during the month of October.

When you create the product, you must determine whether the product's redemption price is calculated using the price that is set up at the product level or using a base redemption promotion. If you choose Base Promotion as the product's pricing method, then Siebel Loyalty ignores the price set at the product level and instead it uses the price set by the base redemption promotion.

To set up redemption promotions, perform the following tasks:

Create the redemption product. When you associate the redemption product with a partner, select Base Promotion in the Pricing Method field. For more information, see Associating the Flight Redemption Product witha Program Partner.
Set up a base redemption promotion to calculate the base redemption price. The base redemption promotion can calculate the base price using either attributes in the transaction or custom attributes. For example, it might calculate the base price using inputs such as load factor and inventory available. For more information, see About Base Promotions and see Setting Up Siebel Loyalty Promotions
Set up additional promotions to calculate discounts. The discount promotions might use inputs such as member tier and day of the week of the flight. For more information, see Setting Up Siebel Loyalty Promotions
If this promotion uses points to pay conversion, then you must also set up a promotion to charge a cash price that makes up for a possible shortfall of points. When you create the Redeem Points action for this promotion, enter information in the Cost Per Point fields that is used to calculate how much cash must be paid for each point that the customer is short. For more information about points to pay conversion, see Points-To-Pay Conversion.
Add these promotions to a promotion design. The redemption price determined by the base redemption promotions gets assigned to the transient variable associated with that point type. The subsequent redemption promotions in the promotion design use this transient variable to update the redemption discount. The final redemption price is based on this value as updated by the last promotion in the base redemption promotion design. For more information, see Using Promotion Designer.

Base redemption promotions and other redemption promotions that are Promotion-Designer enabled use the following actions:

Discount Points. Reduces the number of points that the customer must pay for the redemption product. Used in redemption promotions of the redemption promotion design to calculate discount.
Discount Points plus (+) Pay. Reduces the number of points and the amount of cash that the customer must pay for redemption product. Used in the redemption promotions of the redemption promotion design to calculate discount.
Redeem Points. Reduces the number of points in the customer’s point balance.
Redeem Points plus (+) Pay. Reduces the number of points in the customer’s point balance and also requires the customer to pay cash.

The actions Discount Points and Discount Points plus (+) Pay can handle the entire redemption discount, including reducing the point balance and charging additional cash. The actions Redeem Points and Redeem Points plus (+) Pay do not necessarily have to be used in promotion design. However, one can use these actions in the promotion design if the business requirement is that additional points must be redeemed or additional cash must be charged beyond the normal price of the product.

Discount Points and Discount Points plus (+) Pay are the opposite of Redeem Points and Redeem Points plus (+) Pay. Discount Points and Discount Points plus (+) Pay reduce the amount that the customer pays for the product. Redeem Points and Redeem Points plus (+) Pay increase the amount that the customer pays for the product.

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