Hey @grovetealounge ! (And @GACoffee too)
Iโll let @cspillane, @seiderman, or @lornaz handle some of your questions, but I can jump in from the perspective of a business owner.
These are kind of hard questions to answer, since theyโre all really up to you, what your profit level is, and what the maximum amount that you would want to give away. Iโm not too sure about industry wide best practices, but I can share what I did.
When I owned an Ice Cream shop, we set up our program to be a Buy 12 Any Size, Get $5 Off deal. Our prices ranged from $5 to $14, so if customers wanted to maximize use of the program, the most we would be giving away was $5 for every $60 spent, somewhere around an 8% effective discount. About 50% of our customers bought larger sizes, so the discount decreased, and of course not every customer used the Loyalty program, decreasing it even more.
But we set up our program for the worst case scenario that every customer took advantage of the program, and we would be comfortable giving away 8% of all of our sales. I would say somewhere around 5-10% is a good area, which seems to line up with what you have. But again, it all depends on what kind of discount/loss your business can handle, and what makes sense for your model.
The incentivization of your program to encourage customers to buy more also plays a role here. If itโs 5-10% off just a couple of purchases, there isnโt much of a loyalty boost to your business. If customers are pushed to come back and purchase 5-10 times, or just 5-10 times more than they otherwise would, then you might be more apt to give a higher percentage since itโs more worth it to drive your business forward. Lots of things to think about!
The program also needs to be worthwhile to your customers, so I would recommend coming up with a few potential plans and asking some of your most loyal customers what they think of the ideas, if they would sign up and use it, and if the rewards feel justified.
We didnโt use tiers and opted for a flat $ amount off discount, to keep things simple. Plenty of other places use tiers for free items, and that definitely has a lot of advantages. I would say 3-5 is a good sweet spot, anything more than that feels too hard for customers to keep track of. Remember, yours is probably not the only loyalty program theyโre using. Make something easy and memorable.
Also as a note, Starbucks did just recently announce a change to their loyalty program, making it harder/more expensive for customers to earn rewards, so definitely take a look at what theyโre doing now, and what the customer response is.
I hope that helps!
And for the Square Online Loyalty redemption, customers should absolutely be able to redeem their rewards on your Square Online store. If you use Categories for the redemption, that may not work since item Categories donโt exactly transfer over from standard Square POS to Square Online. We had to change our program from category based to item based, and then it worked and our customers were able to get their discounts.
Let us know and we can keep diving in here to figure it out.
