A loyalty program should cost less than the extra visits it brings. Here is how to design one that does.
Step 1: pick a reward people actually want
Start from the reward, not the rule. The best rewards are wanted by customers and cheap for you: a drink, a pastry, an add-on service. Avoid "10% off", which feels small to customers and costs you on every sale.
Step 2: work out the real cost
Use your cost, not your menu price. A ₱160 latte might cost you ₱45 in beans, milk and cup. That ₱45 is what a free latte costs.
Step 3: set a reachable goal
Customers should reach the first reward within 4–8 normal visits. Further than that and most give up. A weekly customer should get there in about two months.
Step 4: check the give-back
Divide the reward cost by what a customer spends to earn it. For most small shops, a give-back of 2–5% of spend is healthy. Our loyalty points calculator does the maths.
Step 5: keep the rules short
"Buy 9, get the 10th free." If you need a paragraph to explain it, staff won't explain it either.
Step 6: give a head start
Give one free stamp or a few welcome points when the card is added. A card that already shows progress is finished far more often than an empty one.
Step 7: measure, then adjust
After a month, look at:
- How many customers added the card
- How many came back a second time
- How many rewards were redeemed
- What the rewards cost against the extra visits
If almost nobody redeems, the goal is too far. If everyone redeems and visits didn't rise, the reward is too easy.
Common mistakes
- Launching five reward tiers at once
- Rewards that cost more than the visits they bring
- Not telling staff how it works
- No QR in sight: if customers can't see it, they won't join