See how Mage helps Shopify brands lift repeat purchase rate with loyalty, referrals and store credit.
Return on investment for a loyalty program measures how much revenue and value the program generates compared with what it costs to run. Simply put, it tells you how much you gain for every dollar you invest in rewards, software and promotion. A positive ROI means the program is generating more value than it costs.
It takes your annual orders, customers and average order value to work out current revenue. It then applies benchmark rates for the share of customers who become members, the increase in average order value among members, and the increase in purchases per customer among members, to project the revenue those members generate with a program in place. Each rate is scaled by your gross margin band, since higher-margin brands can afford richer rewards and see stronger member behaviour. The result is shown as a low end, assuming a modest program, and a high end, assuming a well-promoted one.
Because results depend on how well the program is designed and promoted. At a typical margin the low end assumes around 8% of customers join and members lift AOV by 5% and purchase frequency by 14%. The high end assumes around 14% join with an 8% AOV lift and a 25% frequency lift. Real results for most brands land somewhere between the two.
They are drawn from published loyalty industry benchmarks and from programs running on Mage, and reflect typical member behaviour versus non-members: members join at a predictable rate, spend more per order and buy more often. Treat them as a starting point rather than a guarantee, since your rewards, promotion and category all move the outcome.
Four numbers from the last 12 months: total orders, unique customers, average order value and gross margin. All of them are in Shopify analytics or your accounts. If you do not know your gross margin, 30% to 50% is typical for direct-to-consumer brands.
Higher customer retention, since members have a reason to come back. Higher purchase frequency and order value, since points and tiers reward buying more and more often. New customers at no acquisition cost through referrals. And first-party data on what your best customers buy, which improves every other marketing channel.
Rewards that are too generous or too hard to earn, low sign-up because the program is not promoted at checkout and in email, a points structure customers do not understand, and no integration with the rest of your marketing. Not measuring the program is the most common one: without tracking member and non-member behaviour separately you cannot tell whether it is working.
It is an estimate, and it is only as good as the numbers you enter. It uses a simplified model that does not capture everything that affects a real program: reward design, how prominently it is promoted, seasonality, competition and market conditions all move the outcome. Use it to decide whether a program is worth a closer look, not as a forecast.
No. The revenue lift is before the cost of points, referral rewards and the platform itself. A typical points program returns a few percent of member spend as redeemed rewards, and Mage plans start at $15 a month, so the net figure will be a little lower than the lift shown.
Not necessarily. A small projection usually means low order volume or a low average order value today, both of which a program can help lift. The calculator also does not capture longer-term benefits such as customer lifetime, first-party data and reduced acquisition cost, which are often where the real return sits.
Get more customers to join by promoting the program at checkout, in post-purchase email and on the account page. Give members a clear reason to return sooner, such as points that unlock a reward within one or two orders. Add referrals so happy customers bring in new ones at no acquisition cost. Then measure members against non-members every quarter and adjust the rewards.
Yes. Enter your store numbers and an email address, and the projection appears on the page with a copy sent to your inbox. It is built by Mage Loyalty, a loyalty, referrals and store credit app for Shopify.
