How do you calculate your loyalty app ROI?

Josh_Quinn
Excursionist
30 0 5

I'd like to add a loyalty app but have some reservations. First, we are primarily brick and mortar which really limits the apps that make sense. Second, most of them have some sort of pricing structure that's based on some mix of level of Shopify (and if you have have the advanced POS it's more), number of transactions per month and then an additional fee per transaction. As a primarily brick and mortar card shop with lots of small transactions that's pretty punishing for us. We're leaning towards Smile starting at the $49 plan and assuming we'll move to the $199 plan if it gains traction. I see the points expiration thing as a real driver but I don't think it makes sense for us until we have enough people with points expiring. 

But the real purpose of this post, and really I have this question about so many of our apps, is how do you calculate (or even estimate) the real ROI of the app?  Like I am sure the app will have a dashboard saying the sales it's driving but how can you isolate the sales that are actually derived form the app in any meaningful way? Clearly our best customers will gravitate towards the app but then the app is going to say our best customers spending was app derived. At the same time your best customers are now potentially spending more but your margin is decreasing from them as a result of the app. Back of the napkin math with the reduction in margin from the perks and what not, I figure we'd need somewhere between $500-$600 per month of NEW business to justify a $199 app like this. 

To complicate things further, I really hate the Shopify POS and I'm leaning towards switching back to Lightspeed (only for the POS, we'll stick with Shopify for ecom) once the year is up. I feel like we need a loyalty program again but I am also reluctant to add something that will make the move harder. I really wish they would just listen to those of us that have been in Brick and Mortar retail for a long time, when we tell them the basic functionality that's missing.

 

Anyone happen to be in a similar situation or want to sing the praises of a particular loyalty app that works well with the POS? 

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