Result
ROI
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
ROI = (incremental revenue − program cost) ÷ program cost × 100%. The key word is 'incremental': not all revenue from program participants, but specifically the part that showed up because of the program, on top of what they would have spent anyway.
Isolating incremental revenue is tricky — loyalty program participants are usually already the most engaged customers, so a simple comparison of their spending to everyone else's overstates the program's effect. It's more accurate to compare the same customers' behavior before and after joining, or to use a control group.
Program cost should include not just the direct discounts and bonuses given to participants but also the cost of administering the loyalty platform — otherwise ROI ends up looking higher than it actually is.