Costs and pricing
Part of Loyalty software budget: costing the whole scheme
Check loyalty marketing cost guide data and sources before you budget
A source-led loyalty marketing cost guide for England: which figures to trust, which regulators to cite, and how to price referral rewards without guessing.
What to take away
- No UK regulator publishes a loyalty or referral cost benchmark. Duties and rate cards are published; prices for your scheme are not.
- Three named sources carry the costthe ICO's Guide to the GDPR, the CAP code on claims and endorsements, and the Consumer Rights Act 2015.
- Staff time is the line most budgets miss. The statutory National Living Wage floor for staff aged 21 and over was £12.21 an hour from April 2025.
- Split a fixed platform licence from variable reward liability, then re-check wage and index figures every April.
Why no published UK loyalty cost benchmark exists
No UK regulator publishes a loyalty or referral cost benchmark. The ICO tells you how to answer a subject access request, but not what that work costs. The CMA and the ASA publish rules rather than prices.
That gap explains why "average loyalty software cost" figures circulate without a sample size, a sector or a contract length. A number missing those details cannot be tested against your scheme.
The substitute is a bottom-up model. Cost each obligation from a named source, then set the vendor claim beside your own total. Our loyalty marketing costs and budget guide for England sets out that layout.
Treat any vendor average as a hypothesis. Your logged hours and published rate cards are the evidence.
The named sources you can cite
The ICO's Guide to the GDPR covers lawful basis, consent and the response clock for subject access, erasure and portability requests. Handle each one manually and you carry the labour cost.
Log the minutes each request takes for a month, then multiply by the hourly rate of whoever handles it. Two requests a week at forty minutes each comes to about six hours a month.
Costing a data request
- Log minutes per request for a month
- Multiply by handler's hourly rate
- Example2 requests/week x 40 min
- Equals about 7 hours a month
Referral wording adds a review cost of its own. The CAP code on claims, endorsements and testimonials sets what you may claim about a member's recommendation and how incentivised content is labelled.
Where loyalty benefits are sold with goods or services, the Consumer Rights Act 2015 transitional provisions shape what a member is owed if the underlying contract changes.
Rates you can cite, with dates
Rates you can cite
| Cost line | Figure to cite | Source | Date to record |
|---|---|---|---|
| Staff time, aged 21 and over | £12.21 per hour, statutory floor | National Living Wage rate, GOV.UK | April 2025 |
| Quarterly uplift index | CPIH, all items | ONS inflation and price indices | each monthly release |
| Platform licence | your supplier's published rate card | vendor pricing page | the day you checked |
| Referral reward per success | a design decision, not a published rate | your own scheme terms | review annually |
The £12.21 rate is the April 2025 National Living Wage floor for staff aged 21 and over. Re-check it, and any HMRC rate quoted in your model, against the April 2026 uprating before signing a twelve-month contract. Refresh the CPIH figure each quarter.
Our checklist on loyalty marketing hidden costs in England lists the lines that never appear on a rate card at all.
Example: first-year budget for 5,000 members
Assume 5,000 active members, 300 successful referrals in year one and a £10 reward per referral. Here is the itemised position.
First-year budget example
| Line | Assumption | Annual cost |
|---|---|---|
| Referral reward liability | 300 referrals at £10 each | £3,000 |
| Platform licence | £400 a month, £4,800 a year | £4,800 |
| Data request handling | 6 hours a month at £12.21 | £879 |
| Working total | before copy review and fraud checks | £8,679 |
Every figure in that table is illustrative and should be replaced with your own quotes.
The shape of the licence matters as much as its size. Seat-based, transaction-based and revenue-share deals behave differently as volumes grow.
Five steps that each produce a figure
- List the obligations that carry a costdata requests, claim review, reward payout and platform fees.
- Attach a named source to each line, whether a statute, a regulator page or a supplier rate card.
- Split fixed fees from variable liabilities so growth can be modelled without rebuilding the sheet.
- Add a contingency for request volume and referral fraud, both of which rise with member numbers.
- Replace each estimate with an observed figure at the quarterly review.
Steps one to four build rows. Step five replaces them with your own data, the only benchmark you control.
Build the budget in five steps
- List every obligation that carries a cost
- Assign each one a named source
- Split fixed costs from variable ones
- Add contingency for volume and fraud
- Review quarterly against actuals
Common questions
Can I benchmark against published averages?
Rarely with confidence. Online averages usually come from supplier marketing, and few state sample size or contract length. Use your own pilot data instead.
Do referral rewards count as a marketing cost or a liability?
A variable liability. They scale with successful referrals, so they behave differently from a fixed licence and belong in their own budget line.
How often should I refresh the numbers?
Quarterly suits most schemes. Refresh sooner if you change the reward value, add a channel, or see a jump in data requests.
What if a supplier will not publish a rate card?
Ask for written rates tied to your expected volumes, then keep the email. Our guide to loyalty marketing agency reviews in England explains what an unverifiable rate means for your model.
