Why 16% is a profitable number for loyaly programs

According to the recent customer loyalty research studyfor love or money 2015’, 16% of program members have purchased items they did not need in order to earn or maintain program benefits.This jumps to 26% for men under 45yo.

A powerful loyalty program, one that has the mechanisms to motivate members to buy more, and more often, provides an opportunity to drive incremental revenue from impulse purchases.

Do the financials:

Number of members in your program x 16% impulse purchases x ave sale of impulse purchase = incremental revenue!

Scenario: 100,000 members x 16% = 16,000 impulse purchases x $85 (let’s say ave sale of impulse purchase) = $1,360,000 x profit margin = profitable revenue

There are many other levers you have to drive a profitable loyalty program, and a hidden profit driver are impulse purchases.


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