The budget of a loyalty programme is the cost of the rewards it triggers. Lecy tracks it in real time in the back office: points given, rewards unlocked, and their cost price, for every point of sale. The split between points given and gifts paid for says what loyalty really costs, and the benchmark between shops says where it pays. And it does pay: as early as 1990, Reichheld and Sasser established that a service business can nearly double its profits by retaining just 5% more customers (Harvard Business Review). This article describes what you track, what you compare, how you adjust the budget, and why none of it requires calculating points on the amount of the receipt.
What a loyalty budget really measures
A shopkeeper who gives away the eleventh coffee does not ask how much the first ten visits were worth; they ask how many coffees they gave away this month, and what those cost. The budget of a programme is exactly that: the number of rewards unlocked, multiplied by the cost price of the reward. Lecy calculates it from what it knows for certain, the visits and the thresholds reached, and from the cost price the shopkeeper enters for each gift. It does not need to read the till to know what loyalty costs.
Points in circulation are a commitment
Large chains know it: points handed out and not yet used are a debt to customers, which their accountants record as a liability. A local shop has no accountant for that, but the reality is the same: a thousand points in circulation, at ten points a coffee, is a hundred coffees promised. The split between points given and gifts paid for shows, at any moment, the ratio between what the programme has promised and what it has already cost. A stock of points that swells without rewards being unlocked signals a threshold set too high, or customers who never reach the reward: it can be read before it costs.
What you see, in real time
For each point of sale: visits today, this week, this month; active customers; points given; rewards unlocked and their cost; feedback received and Google reviews obtained. These figures are measurements, because every point comes from a phone in front of the tag, not from the declarations of a team that stamps. A stamp card says none of this: you discover its cost when the customer presents the full card, and you never know how many are in circulation.
Comparing shops with each other
For a network, the benchmark between shops applies the same indicators to every site: return rate, rewards per hundred visits, reviews per hundred visits. A site that gives many points and unlocks few rewards has customers who do not come back often enough to reach the threshold; a site that unlocks many has a programme that works, or a threshold set too low. In both cases head office sees it without asking anyone for a report, and without any till having been integrated.
What loyalty earns
The budget has another side: what retained customers bring in. Reichheld and Sasser, in “Zero Defections” (Harvard Business Review, 1990), showed that a service business can nearly double its profits by retaining only 5% more customers, because a customer who stays costs less to serve, buys more over time and brings others along. Lecy’s dashboard measures precisely what counts in that equation: how many customers come back, and at what pace. The cost of the coffees given away sits opposite the number of customers who came back for them.
Visit or amount: what the budget gains
Programmes with points calculated on the money spent exist, and they carry two costs. The first is technical: to know the amount, the programme has to be integrated with the till software, which makes deployment long and fragile, and impossible without a till. The second is human: regular customers with a small basket, the ones who keep a local shop alive, feel less well treated, and Starbucks measured it the hard way in 2016. Lecy chooses the visit, and tracks the budget on rewards. For a supermarket, where the basket ranges from €1 to €300, this choice is not suitable, and we say so. For a coffee shop, a barber or a bakery, where the basket is steady, it is the right one: wherever the stamp card worked, Lecy does the same thing, measuring it.
Adjusting the budget without touching the till
The budget is steered with three settings, from the back office: the visit threshold, the reward (and its cost price), the validity period of points. A higher threshold reduces the cost per visit; an expiry limits the stock of committed points; a less expensive reward, a coffee rather than a meal, changes the budget without changing the programme. Everything can be changed at any time, and the effects show in the dashboard the next day.
Frequently asked questions
Do I have to enter the cost price of every reward?
Yes, once, when you define the reward. That is what lets the dashboard convert rewards unlocked into money.
Is the budget consolidated for a network?
Yes: per site and for the whole, with the benchmark between sites.
Can these figures be exported?
The dashboard is made to be read live. For a specific export or reporting need, let’s talk: contact page.
Source: Reichheld and Sasser, “Zero Defections: Quality Comes to Services”, Harvard Business Review, September 1990. Read next: the KPIs that matter in loyalty and the network cockpit.