💲Loyalty ROI calculator

Use our Loyalty ROI Calculator to see how much you can earn from your customer base

A loyalty ROI calculator is a valuable tool for local businesses seeking to increase customer loyalty and retention. It allows businesses to measure the return on investment (ROI) of their loyalty programs by providing a clear understanding of the financial impact of these initiatives.

The calculator works by taking into account various metrics, such as customer spend, frequency of purchases, and customer retention rates. By inputting these metrics into the loyalty ROI calculator, businesses can determine the financial uplift gained from their loyalty programs.

You can calculate ROI at the following link: https://www.boomerangme.biz/loyalty-roi-calculator

To calculate ROI, you can use the following formula:

ROI = (RLC - LPC) / LPC) * 100

Where:

LTV=(LIFETIME*AOV) * grossmargin%

CAC=((VR * N)+S)/N

VR = PRICE * DISCOUNT%

LIFETIME - the duration of the customer interaction or customer lifespan

AOV - average order value

% grossmargin - gross profit per customer in percentage

VR - reward cost

PRICE - product price

DISCOUNT - discount amount offered within loyalty program

S - sum of expenses incurred by the user for the service, dependent on your tariff

N - number of new customers

For instance,

Revenue from Loyalty Customers (RLC) = the total transaction amount for all visits (this field is the purchase amount in the scanner or when credited via the dashboard after each operation).

Loyalty Program Costs (LPC) = the amount spent on the plan payment for the selected period + the total value of redeemed rewards on a reward-type card.

Cost of Goods Sold (COGS) - this is the median from the list of amounts (purchase amounts). If the count is odd, the single middle value is taken. If the count is even, the sum of the two middle values is calculated and divided by 2.