ROI Calculation Methodology:

Loyalty Program Subscription

Inputs: Annual Sales, Number of Locations

Assumptions:

• Loyalty Penetration Rate: 25% of your customers will join the loyalty program.
• Loyalty Members' Average Basket Value Increase: 20% higher than non-members.
• Loyalty Members' Visit Frequency Increase: 25% more frequent than non-members.
• Points Value: 5% of the purchase value is awarded to loyalty members.
• Unused Points: 30% of awarded points are not redeemed.

Costs:

• One-time Setup Fee: $299 (spread over 3 years to normalize ROI).
• Annual Subscription Fee: $100 × 12 months × Number of Locations.
• Annual Marketing Investment: $500 × Number of Locations.
• Points Cost: Calculated as Annual Sales × Loyalty Penetration Rate × Points Value × (1 - % of Unused Points).

Calculations:

1. Sales Attributable to Loyalty Program = Annual Sales × Loyalty Penetration Rate.
2. Loyalty Members Spend Increase = Sales Attributable to Loyalty Program × Loyalty Members' Average Basket Value Increase.
3. Loyalty Members Spend & Frequency Increase = Loyalty Members Spend Increase × (1 + Loyalty Members' Visit Frequency Increase).
4. Sales Increase from Loyalty Program = Loyalty Members Spend & Frequency Increase.
5. Total Annual Costs = (One-time Setup Fee ÷ 3) + (Annual Subscription Fee + Annual Marketing Investment + Points Cost).
6. 3-Year ROI = Sales Increase from Loyalty Program / Total Annual Costs × 100.
7.  Profit = Sales Increase from Loyalty Program − Total Annual Costs

Loyalty + Reviews Program Subscription

Inputs: Annual Sales, Number of Locations

Assumptions:

• Loyalty Penetration Rate: 35% of your customers will join the loyalty program.
• Loyalty Members' Average Basket Value Increase: 20% higher than non-members.
• Loyalty Members' Visit Frequency Increase: 35% more frequent than non-members.
• Points Value: 5% of the purchase value is awarded to loyalty members.
• Unused Points: 30% of awarded points are not redeemed.

Costs:

• One-time Setup Fee: $299 (spread over 3 years).
• Annual Subscription Fee: $150 × 12 months × Number of Locations.
• Annual Marketing Investment: $500 × Number of Locations.
• Points Cost: Calculated as Annual Sales × Loyalty Penetration Rate × Points Value × (1 - % of Unused Points).

Calculations:

1. Sales Attributable to Loyalty Program = Annual Sales × Loyalty Penetration Rate.
2. Loyalty Members Spend Increase = Sales Attributable to Loyalty Program × Loyalty Members' Average Basket Value Increase.
3. Loyalty Members Spend & Frequency Increase = Loyalty Members Spend Increase × (1 + Loyalty Members' Visit Frequency Increase).
4. Sales Increase from Loyalty Program = Loyalty Members Spend & Frequency Increase.
5. Total Annual Costs = (One-time Setup Fee ÷ 3) + (Annual Subscription Fee + Annual Marketing Investment + Points Cost).
6. 3-Year ROI = Sales Increase from Loyalty Program / Total Annual Costs × 100.
7. Profit = Sales Increase from Loyalty Program − Total Annual Costs