Loyalty scheme profitability calculator, free
What a reward costs, what the extra visit brings in
Extra margin
€3,920.00
Cost of rewards
€480.00
Net result
€3,440.00
Rewards handed out
240
per year
The scheme pays for itself. Just 0.02 extra visits per customer per year cover the cost of the rewards.
Your reward costs far less than it is worth to the customer. That is exactly what you want.
The reward costs its cost price, not its retail price. That is the mistake that kills perfectly profitable schemes.
Everything is computed in your browser. Nothing is stored.
A free coffee on the tenth visit costs its cost price, not its shelf price. That distinction often decides whether a loyalty scheme is profitable. It still has to be set against the visits the scheme actually causes, and the ones it rewards without changing anything. This calculator lays out the three terms and gives the number of extra visits from which the operation turns a profit.
How to use it
How it works
Describe the reward
Retail value, cost price and the number of visits needed to trigger it.
Estimate the effect
Number of enrolled customers and extra visits expected per customer per year, cautiously.
Read the break-even point
The calculator gives the net result and the minimum extra visits for the scheme to fund itself.
Worth knowing
Four things to keep in mind
A reward costs its cost price
A dessert sold at eight that costs two to produce does not cost the scheme eight. That is the mistake that kills perfectly profitable schemes.
Some visits would have happened anyway
The already-loyal customer is rewarded for unchanged behaviour. Only genuinely additional visits create value, and they have to be estimated cautiously.
The threshold must stay reachable
A reward on the twentieth visit is never reached in a low-frequency business, and the customer abandons the card. Eight to ten visits is the usual benchmark.
The real gain is in frequency
A loyalty scheme rarely acts on the amount spent, almost always on how often people come. That is the number to watch before and after launch.
FAQ
Frequently asked questions
Enough for the reward to fund itself, few enough that it looks reachable. In fast food and in salons, eight to ten visits is the common compromise.
It works, but it gets lost, and a lost card is a customer back at zero and discouraged. A card in the phone removes that loss, which is the leading cause of abandonment.
A free product costs its cost price, a discount costs its full amount. At equal perceived value, the product is almost always more profitable.
By comparing the frequency of enrolled customers before and after they signed up, or that of members and non-members over the same period. Without measurement, the estimate stays a hypothesis and should be treated as one.
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