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Digital Credits Incentive Economics · For bank & card issuer partners

Revenue growth first. Cost savings on top.

Every incentive you issue is built to drive one behavior, a new account or a longer relationship, and that behavior shows up directly in your revenue line. Because unredeemed value returns to you, the same program also costs less than you would budget for it.

Assumed acquisition lift

Acquisition scenario

Annual Revenue Impact

$9,500

Annual Contribution Margin Impact

$5,125

Value Multiple

112.3x

of lifetime value per $1 of incentive cost

From a 1% lift in acquisition across 1,000 incentives issued to Prime / Core customers

Plus: $9,509 lower program cost than the $25,000 budgeted (38.0%). Your sales and marketing dollars go further.

Revenue impact Your inputs Segment economics Efficiency bonus

Adjust the program

See how the revenue number moves

Drag any assumption below. The revenue impact above, and the efficiency numbers further down, update together.

Program assumptions

Digital Credits issued1,000

Baseline: 1,000 · fixed options: 1,000 / 2,500 / 5,000 / 10,000 / 25,000 / 50,000 / 100,000

Value of each incentive$25

Baseline: $25

% of units redeemed70%

Baseline: 70% · the 45% floor reflects the redemption-tier mix

Interchange rate on customer spend1.5%

Baseline: 1.5%

Return on equity (capital redeployed)10.0%

Baseline: 10.0%

Acquisition scenario

What a 1% lift in acquisition adds to your revenue

Applied across the incentives issued, even a small improvement in acquisition effectiveness compounds into real revenue, with lifetime value and margin gains behind it.

Across the 1,000 incentives issued to Prime / Core customers, a 1% improvement in acquisition effectiveness adds this much:

Annual Revenue Impact

$9,500

Lifetime Value Impact

$24,841

Annual Contribution Margin Impact

$5,125

Scale to your portfolio

What this looks like across your full customer base

The numbers above are calibrated on the 1,000 incentives set above. Enter the prospect's actual portfolio size to see the same per-unit economics scaled up. The underlying assumptions don't change, only the volume.

Scale factor: 500.0x vs. the 1,000-unit model above

Annual Revenue Impact, at Scale

$4,750,000

Annual Contribution Margin Impact, at Scale

$2,562,500

Program Savings vs. Budget, at Scale

$4,754,375

Also lowers cost

Program cost: controlled vs. budgeted

Because most of the unredeemed incentive value returns to you, this program also costs less than you would budget for it. Real savings on top of the revenue, contribution margin, and lifetime value gains.

Budgeted program cost

$25,000

Full face value of every incentive issued, no controls assumed

Actual net cost (controlled)

$15,491

After program fees, reclaimed unused value, and revenue benefits

$9,509 saved vs. budget

38.0% lower than budgeted spend

Also lowers CAC

The incentive's cost per acquisition, not your total CAC

This isolates the cost of the incentive itself per acquired or engaged customer, on a redeemed-unit basis. It is one component of your total acquisition cost, which likely also includes marketing and operational spend not modeled here.

Budgeted incentive cost / unit

$35.71

Budgeted incentive cost ÷ redeemed units

Controlled incentive cost / unit

$22.13

Actual net incentive cost ÷ redeemed units

$13.58 lower incentive cost per acquired / engaged customer

38.0% reduction

Segment economics

What's driving these numbers

The customer-level assumptions behind every calculation above, shown for the segment currently selected.

Prime / Core Revolver Economics

Key LTV assumptions

Average balance

$3,500

Annual spend

$8,000

Cost of funds

3.5%

Charge-off rate

5.0%

Customer life (yrs)

8.0

Annual contribution margin: $512.50/yr

Baseline LTV / account: $2,484.15

How this is calculated — methodology & notes
  • LTV engine: each segment's contribution margin (interest income + net interchange + fee income − funding cost − rewards cost − charge-offs − operating/fraud cost) is annuitized over the customer's economic life at a 10% discount rate, net of year-0 acquisition cost.
  • Redemption behavior: incentive spend and cost are modeled across four behavioral tiers (non-redeemers, and three ascending qualifying-spend tiers), with incentive payout capped at face value, so cost only rises when a customer actually spends enough to earn it.
  • Redemption-rate floor: the redemption slider has a 45% floor because the underlying tier mix (fixed 20% / 25% shares in the two middle tiers) becomes mathematically invalid below that point.
  • Corrections applied vs. the original detailed workbook: (1) the Retention scenario's "LTV Increase" line was multiplying two dollar figures together rather than scaling a per-customer increase by a customer count, corrected to match the pattern used by the adjacent Revenue / Margin lines; (2) both segments' Retention-scenario lines now consistently scale by redeemed units, not a mix of issued and redeemed; (3) Program Fees now apply the blended per-unit fee rate to units issued, a roughly 2%-of-cost correction.
  • Revenue vs. efficiency framing: the Annual / Lifetime Revenue Impact figures are the direct top-line effect of the assumed acquisition lift or retention extension. The Program Cost and Cost-Per-Acquisition figures are a separate, additional benefit from the program's built-in redemption controls. The two are not the same dollars counted twice.
  • Value Multiple: lifetime value per customer (baseline LTV for Acquisition, or the LTV / CM Increase per customer for Retention) divided by the Controlled Incentive Cost per redeemed unit. As in the CAC section, the denominator is the incentive's own cost, not your total blended acquisition or retention cost, so this multiple is intentionally large. It isolates the leverage of the incentive dollar itself, not overall program ROI.
  • Portfolio scaling is exact, not an approximation: every dollar output in this model is linear in units issued, so multiplying by (portfolio size ÷ units issued) gives the same result as re-running the full model at that size. CAC, the Value Multiple, and % savings are per-unit / ratio metrics and do not change with scale.
  • Acquisition scenarios scale linearly with the assumed lift percentage; the stepper lets you show sensitivity beyond the 1% reference point. Retention scenarios use a fixed number of additional months (1 / 3 / 6 / 12 / 18 / 24) added directly to the customer's economic life, rather than a percentage extension, with the 1-month option as the default reference point.
  • Retention math: because a retention incentive re-engages an existing customer today rather than modeling a new acquisition, the "LTV Increase" for Retention scenarios is defined as equal to the Lifetime Contribution Margin Increase, an undiscounted incremental-CM view over the extension period, not a new NPV / LTV recalculation. The Acquisition scenario's Lifetime Value Impact is unaffected and still uses the fully discounted baseline LTV.
  • Segment economics are illustrative. Before using this in a specific client proposal, replace them with actual portfolio data. See the companion Excel workbook, which keeps this exact engine but leaves every input open for entry.

Illustrative model for sales and marketing discussion purposes. Figures are driven entirely by the adjustable assumptions above; they are not a guarantee of any specific customer's or portfolio's performance. Adapted from an internal LTV stand-alone model. Confidential — not for distribution.