LOYALTY PROGRAM BUDGET PLANNER
HOW MUCH SHOULD YOU BUDGET ANNUALLY FOR YOUR LOYALTY PROGRAM?
IFRS 15
accounting-based
10–30%
typical breakage
1–5%
typical reward return
Default values are illustrative starting points based on industry data.
Member funnel
Total number of users enrolled in the loyalty program. The base input that sets the program’s scale.
Active rate (%)Share of enrolled members engaged enough to earn points. Industry average: ~50% (Bond Loyalty Report — active membership).
Reward valuation
Your active member’s average annual spend on the brand’s products/services.
USD
What percentage of a member’s annual spend comes back as rewards. Industry range: 1–5% (retail loyalty benchmark) — this is the program’s generosity level.
Annual reward value per active memberCalculated automatically: annual spend × reward return rate. The monetary value of the annual points per active member.
$0 / yr
Point earning channels
Point valuation
Average points one active member collects in a year across all earning channels (usage, campaign, survey, quiz, birthday, video).
Point value (currency/point)Calculated automatically: annual reward value per active member ÷ annual points per active member. That is, the monetary worth of one point at redemption.
$0.00
Point redemption
Breakage (%)Share of earned points that expire unredeemed. Industry range: 10–30% (LoyaltyOne/Colloquy census). High breakage lowers cost but signals weak engagement.
Year-1 redemption ramp (%)In a new program members accumulate first, then redeem; year-1 redemption is lower than steady state. Modeling range: 40–60%.
Budget setting
Contingency margin against forecast uncertainty. Typical budgeting practice: 10–15%.
%
This tool provides an estimated budget model; inputs are illustrative assumptions based on industry benchmarks and should be calibrated with your own data. Results do not constitute investment or financial advice.
Methodology & sources
- IFRS 15 (formerly IFRIC 13) — loyalty point liability and breakage accounting
- Bond Brand Loyalty – Loyalty Report — active member rate (~50%)
- LoyaltyOne / Colloquy — breakage range (10–30%)
- McKinsey – Making loyalty pay — earn/burn balance and reward return rate
Estimated budget
Year-1 cash budget
$0
Cost actually redeemed in the first year due to the ramp.
Steady-state budget
$0
Annual cost once the program matures.
IFRS 15 point liability
$0
Accrued reward obligation net of breakage (separate from cash outflow).
- Active members
- 0
- Points per active member
- 0
- Monetary value of annual points per active member
- $0
- Annual points issued
- 0
- Total monetary value of issued points
- $0
- Redemption rate
- 70%
- Monetary value of points never redeemed (breakage)
- $0
- Redeemed value (steady)
- $0
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