Loyalty program wisdom

[Clatter]

Hi. We love in with the loyalty program at our coffee shop/espresso bar, and really screwed up, making it to generous, and probably not understanding it thoroughly. We did every ten point/star gets a free drink. Didn't put any restrictions. Soon found people trying to break their order into as many transactions as possible to get start (automatically accruing with card swipe). Others get the same result  accidentally. Not good for us. Any wisdom on a good way to set up loyalty program to our benefit? 

[pessosices · Accepted solution]

Hey @Clatter

Sorry to hear people have been taking advantage!

I always recommended trying to make the program as impossible to take advantage of as possible. 

What are your margins like? Think about what percentage would be the maximum you want to give away over the life of a Reward. You get that percentage by adding up the minimum dollar amount to get a point, times how many points to get the reward, and dividing the reward value

by that total. 

Usually setting up points per visit are more likely to be taken advantage of or cause upset customers. I like 1 point per item in specific categories, or 1 point per $X spent. This way, splitting transactions doesn’t benefit. 

I do 1 point per item in my big categories (the lowest item costs $3) - 12 points gets the customer $4 off their next item. 

Our maximum percentage works out to be around 11% and lower, which works for us!

You can still do a Free drink - either any drink, or drinks of certain categories only. Or a $amount or percentage off any item. So many options!

Hope this helps and let me know if you want to talk it through more!

Pesso

[Clatter]

This is such a helpful reply. Thank you. I'm going to think it over and get back to you with what I come up with. Thanks again!

[pessosices]

Absolutely my pleasure! Glad I could help and looking forward to hearing what you’re going with!