Compare with the contribution remaining after delivering the sale. Revenue alone overstates the amount available for rewards.
Try this with your own numbersFormula and worked example
Retained contribution = revenue × contribution margin − reward − program cost
| Input | Example |
|---|---|
| First-sale revenue | 800 |
| Contribution margin | 40 % |
| Referral reward | 75 |
| Program cost per sale | 25 |
| Calculated result | 220 per referred sale |
Choose reliable inputs
Connect teaching time, preparation, attendance and room capacity to each lesson or class. For this fitness studio calculation, use attendance records, teaching schedules and room costs and a consistent definition of one class place.
- Instructor cost: include the portion belonging to this class place or reporting period, and record where the value came from.
- Rent: include the portion belonging to this class place or reporting period, and record where the value came from.
- Class occupancy: include the portion belonging to this class place or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Should rewards be compared with revenue or contribution?
Compare with the contribution remaining after delivering the sale. Revenue alone overstates the amount available for rewards.
Excludes lifetime repeat purchases and any tax treatment of rewards.
What if this input changes?
If first-sale revenue rises by 10%, this example changes by 32 per referred sale. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.