Glossary
What is purchase frequency?
Purchase frequency is how often a customer buys within a period, and its inverse, the typical gap between one customer's visits, is what sets every other number in a loyalty programme.
Almost every decision in a loyalty programme depends on this one figure. It sets the reward threshold, because a card should be completable in weeks rather than years. It sets when a customer counts as lapsed, at roughly two to three times the normal gap. It sets how often a business can reasonably send a message. And it sets the window over which retention should be measured at all: a salon measuring its repeat rate monthly will report a crisis that is really just an eight-week appointment cycle.
How do you work out a customer's normal gap?
Take the median gap between consecutive visits for one customer, then look at the median of those medians across the customer base. The median rather than the mean, because a few very long gaps from lapsed customers will otherwise drag the figure out of shape.
Rough figures are enough to act on: two to four days for a café, three to six weeks for a restaurant, six to ten weeks for a salon, six to twelve months for a garage. Precision matters less than being in the right order of magnitude.
How does frequency set the reward threshold?
Aim for a card a regular customer finishes in about a month or two. Ten stamps suits a café customer visiting twice a week; six visits suits a salon client on a six-week cycle, and ten would take over a year and never be pursued.
The failure mode is copying a threshold from another trade. A ten-visit card is generous in a café and absurd in a salon, and the number alone does not reveal which.
Can a loyalty programme increase frequency?
Modestly and reliably, which is enough to matter. The mechanism is not persuasion but the half-finished card: it adds a small reason to return to a decision otherwise made on convenience.
A defensible way to size the effect is one extra visit per active customer per year. For 300 customers at €8 a visit that is €2,400, a figure a business can check, arrived at without borrowing anyone's percentage.
See also
- Average transaction value: Average transaction value is the mean amount a customer spends per visit, and in a loyalty programme its variance, not its size, is what decides whether to count stamps or points.
- Lapsed customer: A lapsed customer is someone who used to visit regularly but has not returned within an expected window, commonly 45 days for a café (the Loonine default, adjustable from 1 to 365 days in the app), or two visit cycles for an appointment business.
- Reward threshold: The reward threshold is the number of stamps or points a customer must reach before earning a reward, and setting it correctly determines whether the programme motivates or discourages.
- Retention rate: Retention rate is the proportion of customers from one period who return in the next, and even a small increase compounds substantially over a year.
Further reading
How to calculate customer lifetime value for a small business
A simple, defensible way to work out what a customer is worth over their whole relationship with you, and what to do with the number once you have it.
Do loyalty programmes work?
An honest look at the evidence: where loyalty programmes measurably change behaviour, where they only subsidise customers you already had, and how to tell which is happening.