Loyalty program or subscription: what fits your store and how to calculate whether it pays off

A loyalty program or a subscription looks like the obvious answer when you want a customer to buy a second time. In practice, many stores launch points or member discounts and never check whether they brought extra orders or simply gave money back to customers who would have bought anyway. Below is how to choose the right format, how to calculate whether it pays off and how to measure the result. 1. When each one fits The choice starts with how often the customer needs your product. Consumables bought at regular intervals (coffee, pet food, cosmetics, supplements, filters): a subscription is usually the better option, because it turns a predictable need into an automatic order. Products bought a few times a year (clothing, accessories, home decor, toys): a points or tier program makes sense if you have new collections and real reasons to come back. Products bought rarely (furniture, mattresses, large appliances): points help little. A referral program, complementary accessories or good after-sales service are more useful. The second condition is margin. Every reward comes out of your contribution margin, so a store with a 15% margin has very little room for points. If you don't have the calculation at hand, start with the article on contribution margin vs ROAS . 2. Types of programs Points: the customer earns points on every order and uses them as a discount on the next one. Easy to understand, but easy to ignore if the redemption threshold is too high. Tiers: the customer moves, for example, from Bronze to Gold based on what they spent in a year, and the benefits grow: free shipping, early access to collections, a birthday gift. It works well when the benefits are not only discounts. Cashback as store credit: a percentage of the order goes back into the account and can only be spent with you. It's clearer than points, because the customer sees the amount in money directly. Paid membership: the customer pays an annual fee for free shipping or member prices. Only…