INCENTIVES PROGRAM ROI CALCULATOR

INCENTIVES PROGRAM ROI CALCULATOR

A GUIDE ON HOW TO USE AND INTERPRET WORKSTRIDE'S INCENTIVES PROGRAM ROI CALCULATOR

PROGRAM FACTORS

Determining the success of a channel incentives program begins with broad factors. By inputting these broad factors into WorkStride's Incentive Program ROI Calculator, you can determine how to construct a channel incentives program and the expected ROI of the program. The next few pages explain each of these factors.

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Program Factors

What type of program are you planning?

The type of program determines the difference between a finite "promotion" and a continuously running program. Each type will have different anticipated results.

Annual continuous loyalty program

A continuously running broad promotion is great to trigger more sales, profit, and ROI. They have a lasting effect, can constantly be improved over time, and will produce the best long-term outcome. These programs will have a higher expected revenue than fixed timeframe promotions.

Single timeframe targeted loyalty promotion

If a continuous program is a marathon, a single timeframe promotion is a sprint. Finite promos will lack the broad effect of a longer-term program. They will likely bring in less revenue, but they offer the opportunity to hyper target a user segment. Single promotions can serve as a pilot to expand to a larger, fuller promotion.

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Program Factors

What is the expected revenue you would anticipate during that timeframe without a rewards program?

How much revenue would be expected to be earned without a program in a given timeframe?

This helps determine how much incentivizing users will affect revenue lift. This also helps to determine how much of the budget should be allotted to incentivizing users.

Those purchases/sales are across how many participants?

Your user base is the number of

individuals

within

dealers,

distributors, and other entities who

will be enrolled in the program. This

helps to determine the average

expected investment and return per

user.

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Program Factors

Typical profit margin on the products sold is?

Your typical profit margin helps calculate two key results: Profit Improvement and Rewards Budget.

Profit Improvement measures the relationship between the new sales lift against the profit margin percentage.

Rewards Budget is calculated by looking at the profit margin and estimating the value of allotted rewards per user. The higher the profit margin, the larger rewards budget.

Is this the first program for this audience?

This yes or no question is often overlooked, but is crucial for calculating ROI.

If your audience is used to loyalty programs with you, they are more likely to adopt the new program. In this case, about 75% of users will actively participate.

In the case where your audience has no history of incentive programs with you, program engagement will hover around 60%.

Over the life of the program, both of these scenarios will improve with strategic program communication.

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