Introduction
Businesses have long had an important tool in their efforts to retain customers: the loyalty program that offers discounts or other rewards to customers who keep coming back for more. But the secret key to loyalty program success is that you not only deliver value to your customers, but also it provides value for your business. How to Measure if Your Loyalty Program is Truly Benefiting Your Brand. The following blog post will help you identify how to best measure your loyalty program. The insights can help businesses such as rocket.in.th platform, which is focused on acquiring customers for the long term.
Have Clear Objectives Form the Beginning
A Well-Defined Set of Objectives Before we wade into the metrics, let us first ascertain where the goalposts are meant to be. If your program’s goal is to improve customer retention, repeat purchases, and/or the lifetime value of customers, these should be clearly outlined so that there is a baseline against which you can measure whether the program has been effective.
For such start-ups and other e-commerce companies as well like rocket.in.th which require immense amounts of customer engagement, a better benchmark can be Customer Loyalty, Repeat purchase frequency anything ranging to customer referral gains.
Important Metrics to Track Success
After your goals are determined, the second thing to do is choose the tracking metrics of how you will measure your loyalty program effectiveness. These are the most essential ones you need to know:
- Customer Retention Rate
One of the main motivations for any loyalty program is to re-illuminating that relationship and draw customers back. The customer retention rate tells you how successful your program is in this area. This is a percentage that you can figure out simply by dividing the number of repeat customers with respect to how many total customers were there in a period. The higher this percentage, the more your loyalty program is resonating with customers — and that’s very good news for your business.
rocket.in.th would be able to gauge how many of its repeat users continue to avail of their services after they have enrolled in the loyalty program. Based on the above, this metric will help you to identify whether the program is serving its purpose i.e., it is driving the customers to continue engaging with your brand.
- Redemption Rate
The percentage of rewards or benefits customers redeem out of all the rewards or benefits they earn through the loyalty program. An immediate measure of how compelling or desirable your rewards are. A low redemption rate could indicate that customers do not think the rewards provided are worth it or might be facing some issues in redeeming them.
If rocket.in.th were to announce a soon-to-come loyalty program, you could easily again check redemption rates per order/user to find out which incentive structures are most effective.
- Customer Lifetime Value (CLV)
Customer Lifetime Value (LTV): the total revenue you can reasonably expect from a customer across the span of your relationship. The value of a loyalty program is in raising the CLV, convincing customers to come more often or at a higher value per transaction. So if a loyalty program can increase CLV, it generally is increasing long-term profitability.
- Net Promoter Score (NPS)
Net Promoter Score — NPS measures how much customers like your brand enough to recommend it to others or not. One way to calculate NPS is by asking customers if they would recommend your product or service with a score (1-10). If your customers are satisfied, they’re more likely to recommend you using word-of-mouth and promote return business; thereby raising your NPS.
Businesses like rocket.in.th also utilizes NPS to measure the satisfaction & advocacy level of loyalty program members.
- Engagement Metrics
It is obviously imminent that you monitor the level at which your customers participate with your loyalty program. For instance, KPIs like customers logging into their loyalty accounts or the points accrual rate or simply the number of times people engage with program communications (like emails or notifications). High engagement is a potential sign that customers are interested and active in your program.
Analyzing the Results
After you collect this data, analyze your results to determine if it is delivering the information you are actually looking for. Are customers spending more? I’m sorry to say that the Retention rate is getting better? So, are you seeing more referrals? That is, of course if you are beginning to see the results of an upwards trend in these metrics again your loyalty program has been a success. But if the results are not as desired, you need to go back and check your strategy.
Conclusion
Tracking is an ongoing procedure; it will not be a one-time process in knowing the success of your loyalty program. To constantly do so, there are certain KPIs like Retention Rate (RR), Redemption Rate (RRtR), Customer Lifetime Value (CLV), NPS, Engagement Metrics that are a priority and you should have them handy will help you find whether your loyalty rewards program is at par with the existing trends. For platforms like rocket.in.th, a good loyalty program is something that can turn despising customers into regular and increasing ones. Measuring the correct metrics will enable businesses to power up their programs and continuously add value to their customers.
Dariel Campbell is currently an English instructor at a university. She has experience in teaching and assessing English tests including TOEFL, IELTS, BULATS, FCE, CAE, and PTEG. With over a decade of teaching expertise, Dariel Campbell utilizes his knowledge to develop English lessons for her audience on English Overview.
