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ROI Calculator Breakdown for the Loyalty + Reviews Tier

Our calculator helps you estimate the return on investment (ROI) and potential profit from your loyalty program. Here’s how it works:

Variables You Can Adjust:

1. Annual Sales: The total revenue generated by your business each year.
2. Number of Locations: How many business locations are running the loyalty program.

Fixed Assumptions:

We use industry-standard metrics for loyalty programs to project your potential gains:

• Loyalty Penetration Rate: 35% of your customers will enroll in the loyalty program.
• Average Basket Value Increase for Loyalty Members: 20% higher compared to non-members.
• Visit Frequency Increase for Loyalty Members: Members visit 35% more often than non-members.

Set Costs:

Here are the costs associated with running a loyalty program through our platform:

1. One-time Implementation Fee: $4,000, spread over 3 years for the purposes of calculating the annual ROI.

• • The annual cost used in the ROI calculation is $1,333.

2. Annual Subscription Fee: $1,800 per location.
3. Annual Marketing Investment: $500 per location.
4. Points Cost:

• Points value: 5% of the total purchase value is awarded as points to loyalty members (this can be customized).
• Unused Points: On average, 30% of awarded points are never redeemed.

Points cost is calculated using this formula:

Points Cost=Annual Sales×Penetration Rate×Points Value×(1−%Unused Points)

Profit Calculation:

To estimate the profit generated from loyalty members:

1. Increased Sales from Loyalty Members = Annual Sales × Penetration Rate × (Basket Value Increase + Visit Frequency Increase)
2. Profit = Increased Sales - Points Cost - Annual Subscription Fee - Marketing Investment - (Implementation Fee / 3)

ROI Calculation:

To calculate ROI, we use the following formula:

ROI= (Total Cost/Profit)×100

Where total cost includes all program-related costs: subscription fee, marketing investment, a third of the implementation fee, and points cost.