A complete and easy to understand guide for e-shop operators

The goal of the calculator is only one: to answer the question "is my loyalty program (and referral)worth it?" in a few minutes - without complicated analytics, just with the numbers you already know.

1) What to prepare in advance

• Monthly number of completed orders (last month).
• Average order value excluding shipping (AOV).
• Estimated gross margin in %.
• A rough sense of how your customers behave (consumables vs. durables).
• Do you want to pay monthly or annually (the monthly rate is lower for annual).

That's enough. Everything else the calculator will help you set up sensibly.

2) Explanation of inputs - "what goes into it" and why

Basic inputs

• Current monthly orders

  Number of completed orders for the last month.

  It is also used to automatically select the Ellity tariff.

• Average Order Value (AOV)

  Average without transport. To be used to calculate sales.

• Gross margin (%)

  How much of every 100 CZK of sales is gross profit.

  Example: own brand 40-60%, resell often 20-30%.

Programme adoption and impacts

• Invoicing Ellity

  Monthly vs. yearly (yearly = lower monthly price). Impacts the ROI calculation.

  Type of range (retention potential)

  Each type of goods has a different natural repeatability of purchase. The calculator assigns a coefficient to this:

  • Consumer / supplementary (feed, cosmetics, supplements) - higher return.
  • Fashion & accessories - centre.
  • Hobby / seasonal - slightly below average.
  • Long-life (electronics, furniture) - low retention potential.
  • Subscription-friendly (coffee, shaving, etc.) - very high.

  • Mixed - neutral.

    Do you have a specific category? Select "Custom coefficient..." and manually set 0.5-2.0 (e.g. 1.20 = +20%).

• Percentage of orders from members (%)

  What proportion of all orders are made by registered members. The higher, the more the benefit of benefits will be felt.

• Uplift conversion for members (%)

  How much will the conversion rate of members versus non-members increase in relative terms (thanks to points, VIP, rewards).

• Uplift in frequency of members (%)

  How much more often members are shopping.

• Uplift from references (%)

  What proportion of all extra orders will come from refer-a-friend. It is added on top of the existing volume.

Remuneration costs and operations

• Percentage of sales with rewards (%)

  How many sales will be made at a discount/for points. Influenced by rules (cap, excluded categories/products, min. value).

• Effective reward cost (%)

  Average discount of orders where it is drawn (%→points, after cap). This is the real "cost" of loyalty.

A note on scenarios:

The buttons "Conservative / Expected / Ambitious" pre-fill the realistic values. Start with "Expected" and adjust according to your market.

3) What the calculator calculates - "what it says" and how to read it

• Incremental orders

  Additional number of orders thanks to the program. They are generated from three sources: higher member conversion, higher member frequency, referrals.

• Incremental sales

  Incremental orders × AOV.

• Cost of rewards

  Sales after switching on the programme × share of sales with redemption × average discount.

  In practical terms: how much the discounts/rewards given out are "worth" in a given month.

• Net margin contribution

  How much margin the program will realistically add.

  Formula: incremental sales × margin - Cost of rewards - Ellity licence.

• ROI of the programme

  Return on investment.

  Formula: net margin contribution ÷ (Cost of remuneration + licence).

• Break-even discount

  The maximum average discount on orders with a drawdown at which the net benefit = 0.

  If you give less on average, you're in the black.

Border situation: if you set the drawdown rate = 0%, the calculator does not calculate some indicators (there is nothing to "add up"). This is fine.

4) Step by step procedure (recommended workflow)

1. Enter your current orders, AOV and margin.
2. Select the type of assortment. If you are "something in between", start with "Mixed (×1.00)".
3. Switch billing: monthly vs. annual. Annual will reduce monthly license cost and raise ROI.
4. Select the "Expected" scenario.
5. Click Recalculate.

6. Look at Incremental orders, Net margin contribution, ROI and Break-even discount.

   Play with sensitivity: increase/decrease

   • share of members (what if you improve registrations?),
   • uplifts (what if you add VIP/accelerator points?),
   • the cost of rewards (what if you cap 10% or exclude low-margin categories?).
7. Save 2-3 scenarios for leadership: conservative, expected, ambitious.

5) One fully calculated example (real settings in the calculator)

E-shop with consumer goods (feed)

Inputs: 1 200 orders/month, AOV 1 350 CZK, margin 40%, type "Consumer", invoicing monthly.

"Expected" scenario: members 40%, uplift conversion 10%, uplift frequency 8%, referral 3%, redemption 12%, effective discount 5%.

Result:

• Incremental orders: 153
• Incremental sales: 206 550 CZK
• Cost of rewards: 10 959 CZK
• Ellity license (tariff 1 500): 1 070 CZK / month
• Net margin contribution: 70 591 CZK
• ROI: 587 %
• Break-even discount: 37.2%

Interpretation:

Even if the average discount on orders with drawdown is up to ~37%, you are "at zero". Realistically, you are planning for 5%, so you have a large safety margin.

How about annual billing?

The license would drop to 830 CZK/month, the net contribution would increase by 240 CZK and the ROI would increase even more.

6) Three typical practice situations and how to approach them

A) Fashion and accessories

• Behaviour: impulse purchases, higher returns in season, risk of returns.
• Settings: type "Fashion", members 35-45%, uplift conversion 6-12%, frequency 5-10%, referral 2-4%.
• Rules: cap redemptions at 10-15%, eliminate sales and ultra-low-margin categories, incentivize repeat purchases with point boosts during the season.
• Goal: keep Break-even safely high, work with VIPs for the top 10-15% of customers.

B) Electronics/furniture (lifetime)

• Behaviour: low frequency, higher AOV.
• Settings: type "Lifetime", members 20-30%, uplift conversion 4-8%, frequency 2-4%, referral 2-3%.
• Rules: more incentive to cross-sell (accessories, service, extended warranty), points as "soft" currency instead of discount; cap 5-10%.
• The goal: to increase first order conversion and get leads for long-term care rather than chasing frequency.

C) Subscription-friendly (coffee, shaving, vitamins)

• Behaviour: short buying cycle, high retention potential.
• Settings: type "Subscription-friendly", members 50-65%, uplift conversion 12-20%, frequency 10-15%, referral 3-6%.
• Rules: double points for repeats in the interval, CLV milestones in VIP, friendly "bring a friend" with credit.
• Goal: maximize member share and repeat purchases; ROI usually very strong.

7) How to choose values when you "don't know"

• Percentage of members: if you are not actively offering membership, start with 25-35%. If you are pushing registration, 40-55%.
• Uplift conversion: when you add visible benefits (points, birthday credits, VIP discounts), 6-12% is realistic.
• Uplift frequencies: consumer 6-12%, fashion 4-8%, durables 2-5%.
• Referrals: without communication 1-2%, with an active campaign 3-6%.
• Proportion of sales with drawdown: with a reasonable cap and excluding sensitive categories, it tends to be 8-18%.
• Effective reward cost: 3-8% depending on margins and rules; keep it lower for low margin categories.

8) The most common mistakes and how to avoid them

• Too high a drawdown and discount without a cap.

  Put a "cap" on points redemption (e.g. max 10-15% of the order) and exclude problematic categories.

• Underestimating registrations.

  Without members, the uplift will not manifest. Make registration visible, offer starting points.

• Setting the same rules for everyone.

  Low margin? Tighter cap. VIP? Feel free to higher reward - you know it's coming back.

• Revenue and margin substitution.

  The calculator works with gross margin. If you overestimate it, the benefit will be overshot.

9) How to reality check the data after launch

• Watch monthly:
  1. members' share of orders,
  2. the actual uptake and the average discount,
  3. referral orders,
  4. repeat rate of members vs. non-members,
  5. AOV members vs. non-members.

• After 4-8 weeks, compare with the scenario in the calculator and adjust the rules:

  cap, excluded categories, VIP boosts, registration incentives.

10) What the model simplifies (so you understand the limits)

• Summarizes uplift conversions and frequencies for members. It is a practical approximation.
• Referral adds extra to current orders (monthly view).
• It calculates the cost of rewards from sales after the program is turned on; this is conservative because it also calculates rewards on "old" orders.
• It does not address the CAC of acquisition channels or the impact of returns by category. If this is critical to you, choose more conservative uplifts and follow real-time data.

11) Quick FAQ

• I have an extremely diverse range.

  Start with "Mixed (×1.00)" and if necessary manually adjust the coefficient to 0.9-1.1 according to your feel and results.

• When to use annual invoicing?

  Whenever you are deciding to stick the program for a minimum of 6-12 months. Your ROI will improve immediately.

• How to reduce the cost of rewards without losing motivation?

  Cap redemptions, excluded categories, minimum order value for redemptions, time boosts instead of flat discounts.

12) Conclusion

The calculator will give you numbers to work with in minutes. Start with the "Expected" scenario, keep a lid on your drawdown and watch the difference between member and non-member behavior. As you increase the proportion of members and gently kick up conversion and frequency, you'll see the benefit in orders, sales and margin. That's the whole recipe.