The return on investment (ROI) on any technology investment can be difficult to ascertain. On the cost (investment side), the software costs themselves are an obvious input; but there are typically other costs that are not considered. And while it may seem straightforward to identify the benefits/upside, it’s possible to miss some of those factors as well.
When it comes to incentive & loyalty programs and technology solutions, the obvious costs and benefits are:
- Increased revenue
But, like every good ROI model that proves its worth, the devil’s in the details. For example, on the investments side,
The two big determinants are: (1) the number of customers or channel partners that choose to participate in your incentive/loyalty program, and (2) the increase in business you can expect from those that participate. One very important consideration – in those instances where customers and partners can self-manage/monitor their own program participation and progress via an incentive/loyalty automation portal, those numbers are much higher.
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With the input of industry analysts, we’ve incorporated those factors into an ROI modeling tool with the following variables and expected outputs: