While there are no two thoughts about the fact that Customer Loyalty Programs help in retaining existing customers, businesses have long struggled to measure the efficacy of the same. How do you know if the growth in your business is a result of the loyalty rewards program you have implemented or some other factor? Let’s take a look at five indicators that you must check in order to determine the success of your loyalty management program:
The simplest way to decipher if your customer rewards program is actually working or not is by analyzing the number of customers signing up for it. Aided by promotion, word-of-mouth publicity, and referrals, the enrollment of new customers in your customer loyalty rewards program must witness consistency, if not a healthy growth rate. Monthly fluctuations are not an issue unless you are able to recover and maintain your average. Remember, the more the number of customers in your loyalty program, the better are the returns.
Frequency of Rewards Redemption
Your customers are signing up for your loyalty program left and right, but are they even redeeming their rewards after that? Many businesses offer an irresistible, introductory, one-time-only deal on signing up in order to get as many customers as possible. A potential downfall to this strategy is that the customer forgets about the loyalty program post the sign-up. Hence, to gauge the effectiveness of the loyalty program, you need to assess how frequently are the members redeeming their points.
Average Bill Size of Returning Customers
A crucial goal of Customer Loyalty Programs is to increase the business value of recurring customers. In others words, customers who return, and are using the loyalty program actively, must also be purchasing more products from your store. Simply put, the motivation for them to earn points and exchange them for rewards must result in an increase of the average bill size.
How many of the total loyalty members are taking you up on offers, discounts, and promotions? Are they filling out surveys and questionnaires you are sharing with them? Are they checking their profile statistics once in a while? Answering these questions will help you determine the participation rate of your customers. While it is natural for the participation rate to spike up post an email campaign or instant notification, you need to find out if your reminder is the only thing that drives customers to participate and engage with the loyalty program.
Your business is bound to grow at a sustainable and healthy pace if your loyalty software is able to collect, analyze and make the most of these kinds of data. The best customer loyalty software will help you make the most efficient use of the data and information you already possess and help fill your knowledge gaps using the same. Furthermore, it will also help businesses identify their own strengths and weaknesses and continually work towards retaining their most valuable customers. The currency in today’s digital age is data, but the question is, does your loyalty management software understand how to collect and spend the same?