Tourist sign-ups are the wrong way to bill merchants

A pricing unit that makes sense from the platform's side

Take a destination loyalty program shared by businesses in a tourist area. In this coalition loyalty program, guests earn points at one business and redeem them at another. The program can also reward other kinds of engagement.

The group pays by the number of customer sign-ups. One registration tier carries one fee, a bigger tier a higher fee, and the businesses split the bill.

From the software company's side, the logic holds. More registered customers make the network look bigger. From the shop owner's side, it's much harder to see what they're paying for.

The destination's audience is not my customer base

A busy tourist area draws lots of visitors who come once and never return. A registration records that someone joined the program. It doesn't show repeat purchases, spending, or a visit to every store in it.

Picture a café and a small craft shop sharing the cost. A café promotion brings in a wave of visitors. Registrations climb and push the group into a more expensive tier. The craft shop sells about the same as before.

The craft shop owner asks a fair question: why does my bill go up because more people used the service somewhere else? Splitting the fee equally doesn't fix the gap in benefit. This is how a pricing model ends up creating friction among the merchants it needs to keep.

A visitor joining the destination's program is not the same as a customer walking into my store.

Test per-store pricing for merchants

We'd start by charging per participating store. It's a familiar offer: pay to join a network that markets the destination, runs promotions and gives the shop a recognizable place in the program.

The owner can budget for a set period and knows what's included. The price doesn't jump just because the destination has piled up more registered tourists.

A shared badge could help guests spot participating businesses. But the badge has to mean something specific. If the network promises vetting or service standards, it has to do that work and handle complaints. Membership alone shouldn't suggest every experience is guaranteed.

Keep the shared costs visible

A per-store fee isn't a magic answer. A tiny shop and a large attraction may want different levels of service. The program may eventually need a few transparent packages, or a separate charge for optional campaigns.

We'd keep the basic membership simple before adding any of that. Explain what the common fee pays for, what a merchant can buy separately, and what the network will report back.

Points raise another question: who pays when a guest earns at one business and redeems at another? Membership pricing doesn't settle that liability. Merchants need to understand the rules for earning, redemption and reimbursement before the network asks them to promote it.

Prove value at the store level

The pilot should report more than total sign-ups. Show each business the activity it can reasonably attribute to the program: offer redemptions, referred visits where you can measure them, purchases, and what the rewards cost. Attribution is a hard problem on its own, so agree on the method before the pilot starts.

A tourism program can create value within a single trip. A guest might find a restaurant or shop they'd otherwise have walked past. A QR journey from scan to store visit is one way to measure that. That's worth testing even if the guest never comes back to the destination. It's just a different promise from turning them into a regular.

We'd start with a small group of merchants, a clear membership fee, one limited promotion and an agreed review date. By that date, the businesses should be able to see why staying in is worth it.

The better pricing unit is one the buyer can connect to a service and an outcome. For this kind of destination network, we'd test the store as that unit before billing by tourist sign-ups.