How to use the membership tier benefit cost calculator
The common mistake when designing tiers is remembering a perk as a discount percentage and nothing else. In practice an extra discount, points, free shipping and a gift all stack on the same member, so the monthly cost per person runs higher than it feels. This calculator adds all four into a cost per member, then multiplies by the members in each tier for the total.
Discount and points are applied to the average monthly spend per member, and points are booked as a cost when granted rather than when redeemed. Free shipping multiplies the trips granted each month by your shipping cost per trip, and annual gift and coupon cost is divided by 12 to put it on the same monthly footing.
Cost rate is the cost per member divided by the spend per member. A tier whose cost rate sits above your product margin loses money on every sale, which is the signal to trim the perk or raise the spend needed to qualify. Tiers with zero members drop out of the table entirely.
Frequently asked questions
Booking the full amount is the conservative choice. If you have redemption data, multiply your points rate by the redemption share and enter that instead.
This calculator handles three. With more tiers, group similar perks into three buckets and enter the blended spend and member count for each bucket.