Determine how profitable your loyalty program can be over its lifetime.
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According to this study, “A 5% increase in customer loyalty would increase the average profit per customer by 25-100%.” We’ve built this calculator to show restaurant owners how profitable a loyalty program can be. Businesses that focus on collecting email addresses and driving loyalty with coupons are building a foundation for future success.
Frequently Asked Questions
What is Loyalty ROI?
Loyalty ROI measures the benefits you gain (i.e. more revenue) as a result of a certain investment you make (i.e. marketing and customer acquisition costs).
How do you calculate Loyalty ROI?
To calculate the ROI of your loyalty program, you need to work out the gains and costs associated with it. Two metrics that can help are:
- Customer Lifetime Value (CLV) = (Annual revenue * Customer relationship in years) – CAC
- Customer Acquisition Cost (CAC) = Cost for acquiring new customers / Number of new customers
Once you have figures for both your CLV and CAC, you can calculate a rough estimation of your loyalty program’s inputs and outputs. Enter these numbers into the ROI equation:
Loyalty ROI = (CLV – CAC) / CAC
* CLV and CAC are both calculated “per customer.” Therefore, your overall loyalty program ROI figure will also be “per customer.”
How much does it cost to use the Loyalty ROI calculator?
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up to $979,000 in profit on one coupon alone. Try MenuDrive free for 14 days. No commitments and cancel anytime.