Maintaining and growing a loyalty program can be an important part of any customer-facing business. Like any other marketing or promotional tool, it requires a healthy share of monitoring and adjustment. Hand in hand with this comes a tonne of data. Here’s how to use the data generated by tracking your loyalty program effectively:
Track the right metrics
If you want to take a quick refresher on the best metrics to use for tracking the success of your loyalty card program, take a look back at our post on the subject. Tracking these metrics will give you a better idea on how your program is doing, and where it needs improvement. To recap, you should keep an eye on your:
- Activation rate, as fluctuations in the amount of new loyalty program members are important pieces of feedback
- Attrition rate, because changes in a churn rate are a clear indicator of the appeal of your loyalty program
- Breakage rate, because breakage can be tricky to handle and the laws often vary from state to state
- Effort score, as lower is better. Removing barriers or streamlining the program joining process for your customer should have a positive impact on your other tracked metrics
- Net promoter score, since having customers promote you through social media or word of mouth is excellent
- Redemption’s, so that you can design incentives to boost your redemption rate during slow periods.
- Retention rate, as a raised rate is a great sign, and a reduced retention rate is a clear indicator that your loyalty program needs some revision
Add value for the customer
Everybody loves stretching their dollar a little further by getting more for their money. It doesn’t have to be a huge sacrifice for your business, but giving your customers something small on top of what they’re already getting goes a long way. This doesn’t have to just be physical goods or further discounts. Access to perks such as added suggestions, included warranties, assistance and advice in using your products are all great ways to add value to a loyalty program.
Deliver personalised content… but beware!
You might recall an explosive Forbes headline from 2012: “How Target Figured Out A Teen Girl Was Pregnant Before Her Father Did”. At the time, it came to light that Target were experimenting with the data they amassed on their customers. Once discovered, this initiative put a lot of customers on edge, and generated plenty of discussion on the state of privacy in an increasingly data-driven age.
It’s likely that you already have plenty of data regarding the purchases your customers make. Delivering personalized content based on data from a loyalty program can be useful for the customer, but revealing exactly how much data you have or are using is a risky. Target compensated for this by sending customized emails containing deliberately inaccurate recommendations mixed with data-derived ones. How would your loyalty program handle this