A reward's selling price is not its cost
Start with the actual variable cost of delivering the reward: ingredients, packaging and other costs directly caused by redemption. A coffee sold for €4 does not necessarily cost €4 to make. A free service can also occupy time or capacity that could otherwise have been sold.
Keep a consistent calculation basis, including VAT treatment. All numbers below are illustrative, not a forecast of Goodly's performance.
Example: buy ten coffees, then receive one free
Assume 10 eligible purchases at €4, followed by a free coffee costing €1.20 to provide. Paid purchases generate €40. If the reward is redeemed, its variable cost is €1.20 ÷ €40 = 3% of that revenue.
This ratio does not establish profitability. It excludes the subscription, administration time, other costs and any paid sale displaced by the reward.
| Example item | Calculation | Result |
|---|---|---|
| Paid purchases before the reward | 10 × €4 | €40 |
| Variable cost of one reward | Illustrative assumption | €1.20 |
| Reward cost relative to paid purchases | 1.20 ÷ 40 | 3% |
| 50 rewards actually redeemed | 50 × €1.20 | €60 |
How many extra visits are needed?
For a chosen period, add redeemed reward costs, the tool subscription and other administration costs attributable to the programme. Divide by contribution per additional visit: revenue left after that visit's variable costs.
Simplified example: €60 of rewards plus €30 for a tool totals €90. At €2.50 contribution per extra visit, 90 ÷ 2.50 = 36 additional visits cover these costs only. The €30 is a calculation assumption; see Goodly pricing for actual plans.
Visits that would have happened anyway are not additional just because the customer now has a loyalty card. A rising signup count alone cannot establish a return on investment.
What should you review each month?
- Enrolled customers who actually return.
- Visit counts and frequency, accounting for opening days.
- Redeemed rewards, their costs and rewards still promised.
- Staff time, corrections and subscription costs.
- Price changes, weather or seasonality that could explain differences.
Compare comparable periods and, where feasible, a similar group not exposed to the offer. Goodly helps track visits and rewards; those records alone do not measure revenue caused by the programme.
What if the reward costs too much?
Consider a reward with useful customer value and a manageable delivery cost, or change the threshold for new enrolments with a clear explanation. Avoid funding a general discount that regulars receive without changing their behaviour. Honour commitments already made.
Choose between points and stamps · Start without a till integration · Discuss your programme