In this post, we’re presenting the details of our innovative Points & Tiers policy. This policy is a critical component of our Ownership Model and the key to implementing our Handmade Policy. Together, these three policies represent an intertwined trinity that forms the basis of our unique Business Plan.
The purpose of the Points & Tiers system is to incentivize member engagement, equitably value and reward all kinds of contributions (not just cash), and help the co-op be successful.
It accomplishes this by:
- Valuing all patronage activities for all members in a consistent currency called points
- Accepting member buy-ins using points as well as cash to increase accessibility for all who want to join
- Distributing financial benefits (dividends) by tiers, which is a flexible grouping of all members by total points earned, regardless of member class
Patronage activities are the “uses” of a co-op. They are the contributions members make to the co-op to make it successful for all. For us, patronage includes things such as buying and selling on the marketplace, hours spent on membership asks, financial aid, and activities like handmade verifications.
This system unites all contributions and all members into one successful co-op rather than dividing members by “class” (Artisan, Supporter, Staff).
The Points & Tiers system comes in two parts:
1) The Policy is a part of our Member Agreement and lays out the framework for implementation. We do not expect it to change often, although it will need to be updated when the co-op is ready to accept its first Staff member. The policy was developed in community during the creation of the Ownership Model Canvas.
2) The Schedule provides the specifics of implementation: what contributions are included, how many points each is assigned, and what rules group members into tiers. We expect to adjust this from time-to-time as we receive actual usage data.
The schedule was developed by a task force in the General Circle. The task force created a simulation to test the proposed values in the absence of actual data by using a fictional group of 20+ personas. Each persona had a particular strength, or represented the extremes of the policy: the very highest engagement or the very lowest engagement. The simulation showed how many points each persona would earn under the schedule, and which resulting tiers the personas would be in. This simulation allowed the task force members to adjust the values for equity, fairness and practicality.
We’re eager to hear your thoughts on the Points & Tiers policy. Share your reactions and questions in the comments below!
Policy Version History
1/16/24 v2 Extended points pledge period from 6 months to 12 months and clarified the window begins after member application approval. Created a Board of Directors review exception if a member were to use the points pledge grace periods uncooperatively, such as re-applying multiple times without earning any points. Clarified the difference between Buy-in Points and “Lifetime Points” for tiers placement, and that tiers are determined by the percentile of lifetimes points amounts, not percentile of memberships (which would have duplicate values). Version 1 can be viewed here.
About Artisans Cooperative
We are growing an online handmade marketplace for an inclusive network of creatives: a co-op alternative to Etsy.
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