Key points
- A points program fits when many customers come back again and again. For customers who come once or only a few times a year, the reward is too far off.
- In the example, a free Kopi Susu Aren at 20 points takes at least Rp200,000 of spending. It costs 4.2% of that spending at COGS, or 11% if the cup replaces a purchase.
- Explain the rules before the customer agrees, ask only for a name and phone number, and don't add members' numbers to a broadcast list without separate permission. In Kazeer, staff sign members up with the customer's consent.
- Compare the four weeks before the program with weeks 5 to 8. Look at total transactions, not just member transactions, then subtract the COGS of free cups not recorded as sales from the extra gross profit.
Picture this: a customer buys a Kopi Susu Aren almost every morning on the way to work. They've been in dozens of times, but at the counter nothing sets them apart from someone walking in for the first time.
A member and points program gives customers like this a reward after a set amount of spending. It pays for itself when the extra visits bring in more gross profit than the rewards cost.
Example: Every price, COGS (cost of goods sold) figure, and sales number in this article is an example, not data from a real business.
When a points program fits
A points program fits when many of your customers come back again and again, as at a coffee shop near offices or a campus, or a bakery people stop at for breakfast. They collect points quickly, so the first reward feels close.
It fits less well in two cases:
- Most customers come only once, say at a tourist spot. For them, a well-kept Google Business Profile does more.
- Customers come only a few times a year, say to a restaurant for family occasions. The reward is too far off and easy to forget.
Check with the rule you have in mind: how many times does a regular have to come in for the first reward? If it takes months, change the rule.
Cost the reward first
A reward from your menu can cost you far less than it's worth to the customer. A free Kopi Susu Aren is worth Rp22,000 to the customer, while its dine-in COGS is Rp8,400, as in the example in the guide to COGS per menu item.
The real cost depends on how the reward gets used:
- If the free cup is extra, say on a day the customer wasn't planning to buy, it costs you its COGS, Rp8,400.
- If it replaces a cup they would have bought anyway, you lose that sale, so it costs the selling price, Rp22,000.
Then decide how much spending earns one reward. Worked example, with 1 point for every Rp10,000 spent:
| Reward at (example) | Minimum spending for 1 reward | Cost based on COGS | Cost based on selling price |
|---|
| 10 points | Rp100,000 | 8.4% | 22% |
| 20 points | Rp200,000 | 4.2% | 11% |
How to read the second row: Rp8,400 ÷ Rp200,000 = 4.2%, and Rp22,000 ÷ Rp200,000 = 11%.
A customer who usually buys one Kopi Susu Aren earns 2 points a visit. With a 20-point reward, they reach 20 points on the 10th visit, or after about two weeks for someone who comes in every weekday.
For a customer like this, a free cup usually replaces a purchase, so its cost is close to the selling price. Something they rarely buy, such as a croissant, is more likely to be an extra that costs you close to its COGS. Whatever you choose, make sure you always have the ingredients.
Rules customers can remember
If the cashier needs more than two sentences to explain the program, customers won't remember it either. Decide these four things, then write them on one card by the counter:
- How much spending earns a point, say 1 point for every Rp10,000 per transaction, with anything left over not counted. Points per visit are simpler, but then someone buying one iced tea earns the same points as a table of four.
- The reward on offer, one or two choices at most.
- When points expire, say when a member hasn't bought anything for 6 months. Tell people when they sign up, not when their points run out.
- Purchases that don't earn points, such as promo prices or bundle prices, because their gross profit is already thinner, as the guide to slow-hour promotions shows.
Example: Earn 1 point for every Rp10,000 you spend. Trade 20 points for 1 Kopi Susu Aren. Points expire if you don't buy anything for 6 months. Promo and bundle prices don't earn points. We use your phone number only to keep track of your points.
Signing up members with consent
Give every cashier the same lines. Explain the rules before the customer agrees, for example:
- Cashier: "Would you like to sign up as a member? You get 1 point for every Rp10,000, and 20 points gets you a free Kopi Susu Aren. Your points expire if you don't buy anything for 6 months. All I need is your name and phone number, and we only use the number for your points."
- Customer: "Sure."
Ask only for what you need to keep track of points: a name, so the cashier can confirm who it is, and a phone number, so the member can be looked up without a card. Don't ask for an address, a date of birth, or an ID card number. If a customer says no, just move on to payment.
Agreeing to be a member isn't agreeing to receive promotions. Don't add members' numbers to a broadcast list or a WhatsApp group without separate permission. How to ask for it is in the guide to bringing customers back through WhatsApp.
Kazeer has a members and points feature. Staff sign members up with the customer's consent. An order that records the customer's phone number also saves their customer record automatically, but that isn't permission to send promotions either. Before you print the rules card, ask the Kazeer team which of these rules the points feature can apply, such as expiry and purchases that don't earn points.
Getting cashiers to ask every time
A points program only works if the cashier asks at every transaction. Customers who go unasked a few times may think the program has ended.
Ask after the order is entered and before payment. If the cashier also offers an add-on, as in the article on average spend, offer that first, then ask about membership.
Before day one, have every cashier and waiter practice the lines in pairs until each of them can explain the rules card without reading it. For new cashiers, add it to the plan in the guide to training a new cashier.
Once the program is running, keep a tally sheet at the counter: one mark for every member transaction, and the member's name for every reward traded in. At the end of the week, compare shifts with similar traffic, then ask the cashier on any shift with far fewer member transactions what's getting in the way. Judge cashiers by whether they ask, not by how many people sign up.
Judging the results after a few weeks
Compare the four weeks before the program with weeks 5 to 8, because in the first weeks new members haven't had time to come back. Use full weeks, and leave out unusual days, such as long holidays.
Worked example:
| Daily average | Before the program | Weeks 5 to 8 | Change |
|---|
| Transactions | 186 | 200 | up 14 |
| Member transactions | 0 | 50 | up 50 |
| Sales | Rp4,250,000 | Rp4,600,000 | up Rp350,000 |
| Average spend | Rp22,849 | Rp23,000 | up Rp151 |
| Gross profit | Rp2,550,000 | Rp2,760,000 | up Rp210,000 |
How to read it:
- Members make 50 of the 200 transactions a day, or 25%. That doesn't mean 50 extra visits, because many members are regulars who were already coming in. The real increase shows in total transactions: up 14 a day.
- Say the tally sheet for week 8 shows 350 member transactions, and there are 175 members at the end of that week: that's 350 ÷ 175 = 2 visits per member that week on average.
- Average spend went up a little. If it drops, the extra visits may only be small purchases.
- The COGS percentage is 40% in both periods, and gross profit is up Rp210,000 a day. Five free cups are traded in each day, and in this example the free cups aren't recorded as orders, so they aren't in the table. The sales lost to rewards already show in the sales figure, so you only subtract the ingredients: 5 × Rp8,400 = Rp42,000. Extra gross profit after rewards: Rp210,000 − Rp42,000 = Rp168,000 a day.
Not all of that increase is necessarily down to the program: weather, school holidays, a new menu item, or an event near the outlet also move the numbers.
Free cups that aren't recorded as orders also don't take any ingredients off the stock in your records. At your stock count, count the ingredients for the free cups on the counter tally sheet as usage, so they don't read as missing stock. If your reports record a reward as a Rp0 sale with its COGS, don't subtract it twice. Subtract extra costs too, such as printing the rules card.
In Kazeer, sales, COGS, and gross profit are in your reports, and the member customer list can be exported as a CSV file. Export it at the end of each week, then count your members from the rows. How to read the daily transaction count is in the guide to the daily sales report. See an example of the reports.
The number that decides it is the extra gross profit after the cost of the rewards. If it isn't positive, change the rules or end the program, with notice first. If total transactions don't go up, check whether the rewards are only going to customers who were already coming in.
Common mistakes
- The rules are too complicated, for example member tiers or different points per menu item. Cashiers struggle to explain them.
- Points never expire. Every point not yet traded in is a promise of a reward that can be claimed at any time. Say 300 members each hold 20 points: that's 300 free cups, or 300 × Rp8,400 = Rp2,520,000 in COGS, and up to 300 × Rp22,000 = Rp6,600,000 if every one of them replaces a purchase.
- The rules change without warning. If you need to cut back the reward, announce it on the rules card a few weeks ahead, and let members trade in the points they've already collected under the old rules.