Loyalty programs are everywhere—but convincing your CFO they’re worth the cost? That’s still tough.
The Chairman of M&S recently called loyalty cards “disloyalty cards used for pseudo promotions.” Ouch. With that kind of thinking in boardrooms, it’s no wonder marketers struggle to justify their loyalty spend.
But with the right data, you can flip the conversation. Here’s how.
Why finance pushes back on loyalty.
Loyalty programs cost money. Whether it’s points, discounts, or perks, it shows up on the P&L—so it gets questioned.
The usual CFO challenge? “Wouldn’t this money be better spent on price cuts?” Price cuts are familiar, easy to track, and apply to everyone. Loyalty can seem more complicated—and it’s harder to prove the impact.
The real problem: measuring loyalty.
There are two big reasons loyalty is hard to defend:
- You can’t run proper A/B tests. A standard A/B test would hold back 10% of your audience as a control group. But nothing good can come from excluding 10% of your customers from a loyalty programme—it’s a bad customer experience and a bad idea.
- Comparisons are flawed. Many retailers fall into the trap of comparing loyalty members with non-members. Yes, loyalty members often spend more—but that’s because they were probably your most loyal customers before joining your programme. It doesn’t necessarily mean the programme changed their behaviour.
This makes it hard to prove loyalty is delivering real, incremental value.
The fix: use synthetic control groups.
This is where smart measurement comes in.
Instead hold outs, intelligent synthetic controls match loyalty members with non-members who behave in the same way—same spend, same habits, same categories. That gives you a fair comparison.
When the data shows loyalty drives double the ROI of price investments, it’s hard to argue against.
Build a proper measurement framework.
To make loyalty measurable (and defendable), use three layers:
- Annual: Measure the overall impact of your program.
- Quarterly: Track recurring features like personalised offers or challenges.
- Campaign-level: Measure specific promotions in real-time using internal controls.
This gives you a full picture of what’s working—and what’s not.
Speak finance’s language.
Boardroom debates often rely on stories: “It worked for a competitor.” “We tried it years ago.” Data cuts through that.
Even if you hear, “I can’t see the impact in total sales,” that doesn’t mean your loyalty scheme isn’t working. If just 2% of customers are in the programme, changes won’t show at the top level. But customer-level data shows what’s really happening.
And yes, loyalty does cost money. But if it drives better returns than price cuts, it’s a smarter investment. Plus, strong programmes can earn money through retail media and supplier-funded campaigns (more on that soon – stay tuned).
Build trust one step at a time.
Start simple: show that the programme delivers more value than it costs. Then build on that with targeted strategies:
- Retain your best customers
- Get mid-tier customers to buy more
- Nudge low-engagement customers to return
This shows you’re not giving away value—you’re driving growth.
The bigger picture.
This isn’t just about defending a line on the budget. Loyalty can power personalisation, drive sales, and unlock new revenue streams. But only if it’s backed by proper data.
Bring finance on that journey early and they’ll become supporters—not blockers.
Make the case with data.
To win the loyalty argument, you need to prove it’s working.
Use synthetic controls and smart measurement to:
- Show true incremental ROI
- Avoid over-rewarding customers who don’t need incentives
- Build a program that drives growth—not just spend
Still comparing members to non-members without controlling for bias? Still layering incentives on top of promotions without knowing the effect? It’s time to fix that. Because with the right data, you won’t just win the argument—you’ll build a loyalty program that drives real results.
