It's kind of like Club Nintendo, except instead of fans and tote bags, you get Microsoft Points and Microsoft Points. The bonuses range from 10 MSP for renewing a one-month membership, all the way to 400 for buying or renewing a family plan. You can also get 100 points for activating Netflix, unspecified bonuses for buying certain things on Marketplace, and an occasional 20 points for taking surveys. Microsoft also promises "cool prizes" in promotions.
As Club Nintendo users know, there is basically no downside to a loyalty program like this. You do the stuff you were going to do anyway, and then someone gives you free stuff periodically.