I literally don’t understand how it’s profitable to spend points ie free money ??
Edit : I’m partially talking about spending points earned
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There are ten restaurants in a row. Each has an identical pricing scale and an identical thirty percent profit margin. (You spend ten they profit three basically). You have a customer who eats at each restaurant in a row. So for every ten meals you profit three dollars because said customer eats at your store once.
You introduce a loyalty program that grants a free ten dollar meal for ten meals purchased. So your thirty percent margin drops to twenty if and ONLY if they eat at your store ten times. So your customer, who is pinching pennies, stops eating at each store once every ten days as eats at your store all ten days. In the previous ten meals, you profited three dollars. Your loyalty program, however, has ensured you profit twenty dollars off that sale customer’s same ten meals.
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