Member revenue versus incremental programme value

Member revenue records purchases attributed to enrolled customers under a stated reporting definition. Incremental programme value asks how much contribution the programme caused, after allowing for purchases that would have happened anyway and the costs of the offer. Member revenue cannot answer that second question on its own.

Define the member figure

State whether the figure includes orders before enrolment, unmatched store purchases, discounts, returns, delivery charges and GST. A customer who joins halfway through a year may have substantial earlier sales. Calling all of them programme revenue hides the timing.

Member revenue can still show the scale of purchasing linked to accounts and reveal gaps in transaction matching. It is a descriptive figure. A frequent buyer might join without changing their behaviour; a reward on an order they already intended to place might reduce receipts.

Estimate what changed

Start with eligible customers and a fixed period. Where a fair test is feasible, randomly assign an offer to one group and compare outcomes with a group not offered it. Include everyone as assigned, even if some invited customers decline. This estimates the effect of offering the programme to that population, subject to checks for missing orders, other campaigns and access to the offer by the comparison group.

For arithmetic only, imagine 100 eligible customers assigned to each group. Over the same period, after discounts and returns, the offer group records A$65 revenue per assigned customer and the comparison group A$55.

The difference for 100 offered customers is A$1,000: 100 × (A$65 − A$55). That does not make the offer group's full A$6,500 incremental. The invented figures say nothing about whether a real difference would be precise or caused by a valid test.

An observational member comparison is weaker. People who choose to enrol may already intend to buy more. Matching on prior purchases and comparing changes can improve comparability, but unrecorded differences may remain. Label the result and its assumptions accordingly.

Move from revenue to value

Calculate contribution for both groups on the same basis: receipts after discounts and returns, less costs that change with those orders. Compare contribution per eligible customer, then scale to the relevant population. Deduct additional programme costs not already included, stating the period and any allocation used.

A voucher discount reflected in net receipts has already reduced contribution; do not subtract its face value again. A free item, partner payment or extra support work may need a separate cost line. The illustrative A$1,000 revenue difference cannot be converted into value without the relevant costs.

Present member revenue, estimated additional revenue and estimated additional contribution as distinct figures, each with its population, dates and data limits. If there is no credible comparison, leave the incremental figures unclaimed.