Skip to content
Leat Help Center

What the data on your contacts is worth, and how to work it out

Every sign-up, visit and order that reaches Leat adds to a picture of who your contacts are and what they do. It's easy to see that as a by-product of running a loyalty program, but it's one of the most valuable things your business owns. This article shows four ways to put a euro figure on it, with formulas you can fill in from your own dashboard.

What each kind of data gives you

Each layer of data makes the next thing possible:

  • Profiles. A name, an email address, a birthday and permission to email them. Without these, you can't reach a contact at all.
  • Visits. Where and when a contact comes in. This tells you who your regulars are, and who has stopped coming.
  • Orders. What they buy and how much they spend. This shows you your biggest spenders and what each contact likes.
  • History. Months and years of all of the above. It gives you a baseline to compare against, seasonal patterns and trends. It's also the one thing you can't buy back later.
  • What comes next. With enough history, you can see who's likely to drift away before they do, and act while they still have points to spend.

1. What it would cost to rebuild

The lowest honest value of your contact base is what it would cost to collect it again from scratch.

Contacts you may email × what one new sign-up costs you

What a sign-up costs you is what you spend to win one: ads, flyers, sign-up rewards, staff time at the till. If you've never measured it, divide what you spent on your last promotion for sign-ups by the number of sign-ups it brought in.

This figure leaves out the history. You can buy new sign-ups, but you can't buy back 3 years of visits and orders.

2. What acting on the data earns

This is where most of the value is. For every message you send based on your data, work it out like this:

Contacts reached × share who respond × average order value × your margin

A few places to start:

  • Contacts who've stopped coming. CRM → Segments sorts your contacts by how recently, how often and how much they buy, into segments like Champions and At Risk. A Retention email under Marketing → Recurring emails reaches contacts who haven't visited for a set number of days, 90 by default.
  • Birthdays. A Celebrate birthdays recurring email reads the birthdate on each contact's profile and sends on the day, at most once a year per contact.
  • Contacts with points to spend. On Loyalty → Analytics, Inactive contacts with redemption potential shows the share of contacts who have enough points for a reward but haven't redeemed anything. They're the easiest group to bring back.
  • Your best buyers. A contact list filtered on Number of orders, Total order amount or Number of visits finds them, so you can thank them or give them early access.

To check what a reward or promotion actually brought in, open it and look at the Order performance card on its Redemptions tab. Attributed revenue shows the value of the completed orders it was used on.

3. What your own channel saves you

When you know who your contacts are, you can reach them through email and their wallet pass. You don't pay per click or per view, the way you do every time you reach the same people through ads.

Email marketers report a high return on it. In Litmus's survey of more than 2,000 marketers, retail and ecommerce brands reported an average return of 45 times what they spent on email. That's a self-reported average, so treat it as a sign that the channel pays, not as a figure you'll hit.

4. What it's worth to the business itself

Keeping contacts costs less than finding new ones. Harvard Business Review sums up the research as acquisition being "anywhere from five to 25 times more expensive" than keeping an existing customer, depending on which study you believe and your industry. Frederick Reichheld of Bain & Company found that a 5% increase in retention can increase profits by 25% to 95%.

Knowing your contacts also makes your messages better. McKinsey found that personalization most often lifts revenue by 10% to 15%, and that 71% of consumers expect it.

If you ever sell your business, your contact base counts too. IFRS 3, the accounting standard for acquisitions, names a customer list as an intangible asset the buyer can value separately from goodwill. A clean list with clear permission to email is worth more than a spreadsheet of addresses nobody agreed to.

A worked example

Take a restaurant with 5,000 contacts, 3,000 of whom may be emailed. These numbers are made up to show the sums, so use your own.

  • Rebuild value. 3,000 contacts × €3 per sign-up = €9,000, before counting any history.
  • Win-back. 800 contacts haven't visited in 90 days. If 8% come back once and spend €25, that's 64 × €25 = €1,600 in revenue per send. Sent every quarter, that's €6,400 a year.
  • Birthdays. About 415 contacts have a birthday each month. If 15% come in and spend €30, that's 62 × €30 = about €1,870 a month, or roughly €22,000 a year.

That's around €28,000 a year in revenue from 2 emails, using data the restaurant already has.

Keep your figures honest

A number you can defend is worth more than a big one:

  • Revenue isn't profit. Multiply by your margin before you compare it with what the program costs.
  • Your best contacts join first. Members often spend more partly because your most loyal guests are the ones who sign up. Compare the same contacts before and after, or compare a group you emailed with a similar group you didn't.
  • Permission is what makes it count. A contact you may not email is worth very little for marketing. Under the GDPR, the value of your list depends on your contacts having agreed to hear from you.

Three things to do this month

These three put your data to work:

  1. Set up a Retention email for contacts who haven't visited in 90 days. See Recurring emails: setting one up, and every option.
  2. Set up a Celebrate birthdays email, and make sure your sign-up form asks for a birthday. See Setting up forms that collect useful data: best practices.
  3. Create an RFM segment and see how many of your contacts are At Risk. See How to create a CRM segment.

For your own figures over time, build a chart in Data → Insights on your orders data, for example revenue per month. See Building dashboards and charts in insights.

Sources

Back to the help center