While you may be used to computer software spitting out regular reports on how many customers you have and how often they visit, it takes a little more work to track the success of your loyalty program. As a B2B business, full-service B2B reward programs are a vital part of your marketing strategy, so it’s important to stay on top of what’s working and what’s not. By adopting new technologies and being creative with your program’s structure, you can keep your loyal customers coming back for more. Here are some of the metrics you should track to ensure your loyalty program is working:
1. Member Value
If the lifetime value of a loyalty program member exceeds that of a non-member, then your program is working. To calculate this, take the total revenue from all loyalty program members and divide it by the number of members. This will give you an average value per member. Then compare this number to the average value of a non-member customer. If the lifetime value of a loyalty program member is higher, then your program is successfully generating additional revenue and warrants additional investment from your end. This investment can be in the form of improved program benefits, such as more valuable rewards or additional marketing efforts to attract new members.
2. Engagement Rate
The number of loyalty program members actively engaged with your brand is another key metric to track. To calculate your program’s engagement rate, take the number of members who have purchased or redeemed a reward in the past 12 months and divide it by the total number of members. This will give you a percentage that indicates how active your members are. A high engagement rate means that your program successfully drives additional purchases and customer loyalty. A low engagement rate could indicate that your program benefits are not valuable enough to encourage customers to engage or that your marketing efforts are not reaching the right audience.
3. Redemption Rate
The redemption rate measures how often customers are using their rewards. To calculate this, take the number of rewards redeemed in a given period and divide it by the total number of rewards available. This will give you a percentage that indicates the redemption rate for your program. A high redemption rate means that customers use their rewards and find value in them.
4. Net Promoter Score
The Net Promoter Score (NPS) is a measure of customer satisfaction that can gauge the success of your loyalty program. To calculate your NPS, take the number of customers who would recommend your program to a friend and subtract the number of customers who would not recommend your program. This will give you a score that ranges from -100 to 100. A high NPS indicates that customers are satisfied with your program and are likely to promote it to others. You can calculate your NPS score with the free NPS Calculator.
5. Retention Rate
The retention rate measures how long customers remain active in your loyalty program. To calculate your retention rate, take the number of members who have remained active for a given period and divide it by the total number of members who joined during that same period. This will give you a percentage that indicates the retention rate for your program. A high retention rate means that customers value your program and stick with it over time.
6. Incremental Sales
Loyalty programs are designed to increase customer loyalty and drive additional sales. To calculate the incremental sales generated by your program, take a random sample of customers who are active in your loyalty program and compare their spending to a similar sample of customers who are not active in the program. This will give you a clear picture of how much additional revenue your loyalty program generates.
7. Social Media Mentions
Tracking social media mentions is a great way to gauge the success of your loyalty program. To do this, search for mentions of your program on social media platforms like Twitter and Facebook. This will give you an idea of how often customers are talking about your program and whether they are doing so in a positive or negative light.
8. Program Feedback
Finally, it’s important to track customer feedback about your loyalty program. This can be done through surveys, customer interviews, or focus groups. This feedback will give you valuable insights into what customers like and don’t like about your program and how you can improve it.
Conclusion
There are several different metrics that you can use to measure the success of your loyalty program. The most important thing is to track the most relevant metrics to your business goals. By doing this, you’ll be able to identify areas for improvement and ensure that your loyalty program successfully drives customer loyalty and additional sales.