Effectively Analyze Your Loyalty Program
Given the level of time, money, and attention that your loyalty program will “enjoy,” both internally and externally, it is critical to continuously assess how it is performing. Our extensive experience has given us a clear understanding of which KPIs to monitor from a commercial perspective to ensure your team is proud of the program and its performance over time.
Top Ten Tips to Effectively Analyze Your Loyalty Program
1. Measure, Monitor, and Learn:
Daily, weekly, monthly, quarterly, and annually. There is no such thing as too much reporting, provided it is done by the right people, shared with the right people, and used for the right reason. At a minimum, we recommend that key program indicators are shared with your management team each week.
2. Closely Monitor Membership:
Keep a close eye on how many new members are being recruited at the store level every 30 days and how the total member base is trending. You cannot have an effective loyalty program until you have recruited a sizable base that represents a meaningful percentage of your customers.
3. Define and Monitor Engagement:
In our industry, we recommend monitoring what percentage of your user base has been active in the most recent quarter. It is also useful to analyze and report the average number of active app sessions over the last 90 days.
4. NPS Analysis:
We recommend capturing and monitoring your Net Promoter Score across demographics, such as age and gender, as well as by segments like students. We know that companies with low Net Promoter Scores are likely to lose market share once customers find attractive alternatives, so it is important to closely analyze your results and ensure they accurately represent your customer base.
Are your customers happy to promote your store? If not, why not?
5. Loyalty Share:
It is important to set targets for the percentage of transactions that come from known customers. Simply put, what percentage of total transactions come from members versus anonymous customers. This figure should grow over time, and our customer excellence team can help set realistic and stretch targets for the first quarter, first year, and beyond.
6. Compare Basket Spend by Segment:
It is valuable for senior management to understand the average basket size for members versus non-members. While higher values cannot be fully attributed to the loyalty program alone, this comparison provides meaningful insight into the potential growth available from existing customers, as well as new customers you may attract.
7. Monitor Recency and Frequency:
Track the average number of transactions made by active users over the last 90-day period to understand how often members are engaging with your business.
Data is the new oil, so make sure you capture and analyze it.
8. Continuously Build Profile Data:
Measure the percentage of members who have shared information such as gender and date of birth, giving you the data needed to create more powerful campaigns. While capturing a contact number is often the fastest way to connect with customers, it is equally important to continually build insights into who your customers are and what they need.
9. Build Store Preferences:
Similar to progressive customer profiling, it is important to regularly ask members to identify their local store so you can target them with relevant local offers. Another useful metric is measuring the percentage of members who are also subscribers.
10. Consistently Run A/B Tests:
One of the most powerful tools in the digital marketer’s toolkit, A/B testing should be leveraged as part of every campaign. By isolating variables and analyzing which version performs better, you can quickly learn how to design winning campaigns that truly resonate with your members.
Checklist to Effectively Analyze Your Loyalty Program
